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International Journal of Academic Research in Accounting, Finance and Management Sciences

Open Access Journal

ISSN: 2225-8329

Comparative Financial Analysis of the Return on Investment in Solar Energy Projects on the Federation of Bosnia and Herzegovina Market

Jasmina Dzafic, Neira Durmic

http://dx.doi.org/10.6007/IJARAFMS/v14-i1/20639

Open access

Investment in solar energy is a very current and underexplored topic, especially if the research questions are focused on the territory of Bosnia and Herzegovina Federation (FBiH). In FBiH, there is certainly interest in investing in solar energy projects but the key to making the final decision to invest includes determining the profitability of solar power plants and determining whether investment in these projects is cost-effective. This paper aims to determine the return on investment (ROI) in solar energy projects in FBIH using empirical data and adequate analyses. A case study as a widely applied research strategy within the qualitative methodology was used and 162 scenarios were created for three selected locations in FBiH (Bjelašnica, Biha?-Željava and Livanjsko polje- the Livno Field). The case study inputs point to a cautious approach to the potentials of investment risk in this type of venture in FBiH, since a discount rate of 10% was set, which is mostly, but not exclusively, higher than the discount rates used in other countries. With such an attitude to risk, i.e., a cautious approach to the potentials of investment risk potentials and the postulated hypotheses, the results showed that solar power plants (SPPs) are much more profitable in the case when the producer is in the incentive system. Still, even with such a defined eligibility threshold of ROI, there are scenarios that point to the possibility of profitable business without incentives.

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(Dzafic & Durmic, 2024)
Dzafic, J., & Durmic, N. (2024). Comparative Financial Analysis of the Return on Investment in Solar Energy Projects on the Federation of Bosnia and Herzegovina Market. International Journal of Academic Research in Accounting Finance and Management Sciences, 14(1), 231–248.