Energy 35 (2010) 3245e3255

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Energy
journal homepage: www.elsevier.com/locate/energy

Performance analysis of hybrid photovoltaic/diesel energy system under

Malaysian conditions
K.Y. Lau, M.F.M. Yousof, S.N.M. Arshad, M. Anwari*, A.H.M. Yatim
Faculty of Electrical Engineering, Universiti Teknologi Malaysia, 81310 UTM Skudai, Johor, Malaysia

a r t i c l e i n f o

a b s t r a c t

Article history:
Received 29 October 2009
Received in revised form
5 April 2010
Accepted 7 April 2010
Available online 15 May 2010

Standalone diesel generating system utilized in remote areas has long been practiced in Malaysia. Due to
highly uctuating diesel price, such a system is seemed to be uneconomical, especially in the long run if
the supply of electricity for rural areas solely depends on such diesel generating system. This paper
would analyze the potential use of hybrid photovoltaic (PV)/diesel energy system in remote locations.
National Renewable Energy Laboratorys (NREL) HOMER software was used to perform the technoeconomic feasibility of hybrid PV/diesel energy system. The investigation demonstrated the impact of PV
penetration and battery storage on energy production, cost of energy and number of operational hours of
diesel generators for the given hybrid congurations. Emphasis has also been placed on percentage fuel
savings and reduction in carbon emissions of different hybrid systems. At the end of this paper, suitability
of utilizing hybrid PV/diesel energy system over standalone diesel system would be discussed mainly
based on different solar irradiances and diesel prices.
2010 Elsevier Ltd. All rights reserved.

Keywords:
Hybrid PV/diesel system
Standalone diesel system
Performance analysis
HOMER software

1. Introduction
In Malaysia, there are abundances of remote villages that are
located far away from utility grid. These areas normally lack in the
supply of electricity since it is impractical to extend the utility grid
to these dispersed populated areas that are usually located in
rugged terrains. As a result, such villages are normally powered by
standalone diesel generators to cope for the demand of electricity.
However, current increase in global fuel price has drawn serious
attention of using renewable energy sources in these remote
locations. Since these remote areas largely depend on diesel
consumption for electricity supply, increase in global fuel prices
will have great impact to these societies. Therefore, the use of
renewable energy in these locations would be of great benet,
especially in reducing the dependence on such highly uctuating
diesel price.
Solar energy is one of the in-exhaustible energy sources available for the implementation of renewable energy system in remote
areas. It has been pursued by a number of countries with monthly
average daily solar radiation in the range of 3e6 kWh/m2 in an
effort to reduce their dependence on fossil fuels [1e4]. Malaysia,
being gifted with abundance of solar radiation, has a wide potential

* Corresponding author. Tel.: 60 75535235; fax: 60 75566272.

E-mail address: makbul@ieee.org (M. Anwari).
0360-5442/$ e see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.energy.2010.04.008

of solar energy applications to meet the electricity demand of

remote villages. Therefore, integration of solar photovoltaic with
readily available standalone diesel generators (or generally known
as the hybrid PV/diesel system) has seen potential application in
such remote areas.
The use of hybrid PV/diesel system comes with various advantages. Among them are improved reliability, reduced emissions and
pollutions, reduced cost and more efcient use of power. The
maintenance cost involved for PV system is negligibly small, and
can be assumed to be maintenance-free after its installation. Unlike
standalone diesel generator, it has to be maintained accordingly,
such as replacing diesel or components exhausted during operation
to ensure reliable supply of the generator. Apart from that, the use
of PV also allows it to be easily expanded to meet the growing
energy needs. However, since the use of PV is still new, its initial
cost, especially its installation cost is quite high. Another drawback
is that PV is sunshine-dependent and its output does not match the
load demand on 24-hour basis.
Luiz Carlos Guedes Valente et al. [5] performed an economic
analysis on hybrid PV/diesel system and demonstrated that the
system has advantages over standalone diesel system. With cost
analysis over a 20-year period, hybrid system was proven to reduce
fuel consumption, operation and maintenance costs while
improving the quality of service. This is exceptionally true for small
villages with up to 100 families.
The application of hybrid PV/diesel system has seen its
successful implementation in Malaysia with the Langkawi Cable

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standalone diesel system was discussed mainly based on different

solar irradiances and diesel prices.

2. HOMER software

Fig. 1. Daily load prole.

Car Resort Facilities Project [6]. The hybrid system consists of

diesel generators with electronic control system, lead-acid battery
system, solar PV, inverter module and system controller with
remote monitoring capability. The project has been proven
successful in offering solution to off-grid power generation in
terms of reduced operation, maintenance and logistics problem
and cost, providing 24-hours reliable supply at an effective cost as
well as preserving the nature. With such a good experience in
hybrid PV/diesel system installation, the use of such system,
especially in remote areas should gain wider consideration in
Malaysia.
Another successful implementation of hybrid PV/diesel project
in Malaysia is described in [7]. In the paper, the authors conducted
studies on the alternative energy design scheme for an Information and Communication Technologies (ICT) Telecenter. The
authors remarked that hybrid PV/diesel energy system was more
practical than standalone diesel generator. This has yet proven
economically the potential use of hybrid PV/diesel energy system
in Malaysia.
According to Farret et al. [8], there are four major aspects related
to distributed generation which involve the use of renewable
energy. They are the hardware and control, effect on the grid,
interconnection standards and economic evaluation. Since hybrid
PV/diesel system is a standalone system which does not involved
interconnection to the grid or with other renewable energy sources,
this report will seek to analyze the potential use of hybrid PV/diesel
system with and without battery to determine its suitability in
remote areas, in the perspective of hardware and economical
analysis.
HOMER software has been used to perform the technoeconomic feasibility of hybrid PV/diesel energy system. The investigation demonstrated the impact of PV penetration and battery
storage on energy production, cost of energy, number of operational hours of diesel generators for a given hybrid congurations.
Emphasis has also been placed on percentage fuel savings and
reduction in carbon emissions of different hybrid systems. The
suitability of the hybrid PV/diesel energy system over the

HOMER is a computer model that simplies the task of evaluating design options for both off-grid and grid-connected power
systems for remote, stand-alone and distributed generation (DG)
applications [9]. It has been developed by United State (US)
National Renewable Energy Laboratory (NREL) since 1993. It is
developed specically to meet the needs of renewable energy
industrys system analysis and optimization.
There are three main tasks that can be performed by HOMER:
simulation, optimization and sensitivity analysis. In the simulation
process, HOMER models a system and determines its technical
feasibility and life cycle. In the optimization process, HOMER
performs simulation on different system congurations to come
out with the optimal selection. In the sensitivity analysis process,
HOMER performs multiple optimizations under a range of inputs to
account for uncertainty in the model inputs. Detailed description
on HOMER software can be found in [8].

3. Background information
3.1. User load
It was assumed that the remote residential area consisted of
a total of 40 houses. Each house required loads of 2 kW peak.
Therefore, 40 houses would require a maximum of 80 kW peak
demand, approximately.
The daily load prole of a typical remote inhabitant area is as
shown in Fig. 1. It can be noticed that load requirement varies
throughout the day, with the maximum demand occurs at night.
Since the area investigated was a purely residential area, most of
the users will not be at home in the morning or afternoon.
However, at noon, family members would be at home for lunch and
rest, which caused the load demand to increase.
Load requirements further changes according to each month.
This is shown in Fig. 2. It was assumed that the hottest month
occurs between May to August. Therefore, the load requirements
would be high for those few months. However, from November to
January, more cloudy days are expected and the weather would be
cooler. Thus, it was assumed that those few months would require
less electricity demand, especially for cooling purpose (e.g. fan).
A random variability factor was given to HOMER software in
order to estimate differences that may be encountered each day
when using the load prole. They are known as day-to-day variability and time-step-to-time-step variability, with each approximated to be around 2% respectively. Based on all of the assumption
made, the energy demand required by the remote inhabitant area,
as simulated by HOMER software, was estimated to be about
1156 kWh/day (or 421.94 MWh/year).

Fig. 2. Monthly load prole.

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Fig. 3. Solar radiation data.

3.2. Solar radiation

From the data provided by Malaysian Metrological Department
[10], the solar radiation data for the selected remote area was
estimated to range between 4.8 kWh/m2 and 6.1 kWh/m2. This is
illustrated in Fig. 3. It can be noticed that more solar irradiance can
be expected from the month of May to August while less solar
irradiance is to be expected from November to December. This
correlates to the load requirements as discussed earlier (refer
Fig. 2). The scaled annual average of the solar radiation was estimated to be 5.51 kWh/m2/day.
The HOMER software can generate the clearness index from the
solar radiation data obtained from [10], according to the latitude of
the place that has been chosen. In this analysis, the latitude was
selected to be 1280 North, according to data provided by [11]. It
should be highlighted that this latitude was chosen just for simulation purposes, whereby it was assumed that a remote location
exist in such an area. With this information, if the solar radiation data
is not available, clearness index can also be used to generate the solar
radiation data. Therefore, either the clearness index or the solar
radiation data can be used to represent the solar resource input, as
long as the data of latitude is available to the HOMER software.
3.3. Diesel
Currently available diesel price in Malaysia is RM 1.70 per liter.
This value, when converted into US dollar ($), would be about $0.49
per liter. Unfortunately, according to AsiaOneNews [12], the price of

Fig. 4. Hybrid PV/diesel energy system.

diesel can be unreasonably high in rural areas. Checks found that

diesel is priced at about RM 7.00 ($ 2.03) per liter in many places in
the Ulu Baram district, some 200 km inland from Miri, Sarawak.
Therefore, in this simulation, diesel price was varied to determine
its effect on the system, since current global fuel shortage is also
causing the potential increase in diesel price.
4. Design specication
In a hybrid PV/diesel energy system, there are four main
components to be considered. They are the generators, PV modules,
batteries and converter.
Table 1
Data for selected components.
Description

Data

PV
Size
Capital cost/replacement cost
Operating and maintenance cost
Lifetime

60 kW
$ 5600/kW
$ 0/year
25 years

Storage battery
Type of battery
Nominal voltage
(2 batteries per string)
Nominal capacity
State of charge
Nominal energy capacity of
each battery
Capital cost
Replacement cost
Operating and maintenance cost

$ 1100
$ 1000
$ 10/year

Inverter
Size
Capital cost
Operating and maintenance cost
Lifetime
Efciency

60 kW
$ 900/kW
$ 0/year
15 years
90%

Diesel generators
Number of generators
Size
Capital cost
Replacement cost
Operating and maintenance cost

2
50 kW each
$ 500/kW each
$ 400/kWh each
$ 0.025/hour/kW each

Surette 6CS25P
6 V (12 V)
1156 Ah
40%
6.94 kWh

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K.Y. Lau et al. / Energy 35 (2010) 3245e3255

In order to meet the user AC load prole as discussed previously,

the following design specications for each of the component are
provided.
4.1. PV module

Fig. 5. Conguration of hybrid PV/diesel energy system.

For the purpose of simulation, the hybrid PV/diesel energy

system was designed in such a way that it consisted of two diesel
generators, one photovoltaic array, one inverter and a battery bank
(optional), to supply to the AC load. This is illustrated in Fig. 4.

Solar energy is used as the baseload power source. In an isolated

system, the renewable energy contribution of 50% is considered to
be high. Such a system might be very difcult to control while
maintaining a stable voltage and frequency. The level of renewable
energy penetration in hybrid systems (deployed around the world)
is generally in the range of 11e25% [13].
The designed PV array size was 60 kW. This amount would be
enough to cater for the load in the day (about 50 kW). The excess
power generated would be used to charge the battery bank. Each of
the proposed PV modules is rated at 50 W, with a 12 V nominal
voltage.
In order to obtain a total generation of 60 kW, 1200 modules were
stacked together. Since the area of each module would be 0.451 m2,
the total modules resulted in an area of 540.652 m2.
It should be highlighted that this PV array would only generate
electricity at day time, from 6 a.m. to 6 p.m. At night, there is no
electricity generated. Therefore, the output from solar would be 0 W.
At night, either the battery or the generators will take over the task.
For economical analysis, it was assumed that each kW of PV
module would cost $ 5600. The cost of replacement was assumed to
be the same as the initial cost. Operating and maintenance cost was
assumed to be zero since it is negligibly small.
4.2. Storage battery
The storage battery chosen was Surrette 6CS25P. These batteries
were congured such that each string consisted of two batteries,

Fig. 6. Comparison between different energy systems.

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Fig. 7. Total NPC for standalone diesel system.

with a total of six strings. This means the total batteries used were
12 units, with a bus nominal voltage of 12 V. This battery bank is
capable of providing about one hour of electricity.
From the datasheet given by HOMER software, the minimum
state of charge of the battery is 40%. Its round trip efciency is 80%.
The batterys capital cost was assumed to be $ 1100; replacement
cost $ 1000; operating and maintenance cost $ 10/year.
4.3. Diesel generator
Diesel generator is usually sized to meet the peak demand of the
power [14]. Since the peak demand of the residential area is 84 kW,
two diesel generators were chosen, each with 50 kW capacity,
which resulted in a total capacity of 100 kW. The excess 16 kW from
the generators will cover the spinning reserve of about 19%. This
would cater for the additional loads in the future.
The generators mainly operate at night since solar power is not
available at this time, and the load demand is higher at night. In the
day time, one of the generators would operate if the solar power
and the battery could not meet the load demand.
The initial cost and the replacement cost of 50 kW generator
was assumed to be $ 25,000 and $ 20,000 respectively. For operating and maintenance cost, it was assumed to be quite high, with $
1.25/hour. This is because the area considered is a remote area.
Therefore, difculty arises in transportation problem when maintenance is required, which would indirectly add up the cost. Each of

the generators was assumed to have a lifetime of 15,000 operating

hours.
4.4. Inverter
The inverter was rated based on the selected PV array. Since
60 kW output would be generated from PV, the inverter was rated
at 60 kW to fully supply the power from PV. However, it is assumed
that the inverter has an efciency of 90%. Therefore, the supplied
power would be less than 60 kW. The initial cost of the inverter is
assumed to be $ 900, which is the same as the replacement cost.
There was no operating and maintenance cost estimated.
A brief summary on the data for each of the selected components is provided in Table 1.
5. Operating strategies
The designed system was assumed to operate load following
dispatch strategies. This means that only PV array will charge the
battery bank. Generators would not charge the battery bank. They
would only generate power to serve the required load.
The conguration of the hybrid PV/diesel system is as shown in
Fig. 5. The PV was used as the base load supply which produced DC
power. It was then converted into AC source by using an inverter.
Since the PV will charge the battery bank, this happens when there
is extra power after meeting the demand of the end user load. If the

Fig. 8. Monthly average electric production for standalone diesel system.

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Fig. 9. Total NPC for hybrid PV/diesel system without battery.

PV cannot meet the demand, the battery bank will not be charged,
but being discharged to cater for the demand.
Generator 1 and Generator 2 will operate if both PV and battery
bank cannot meet the demand. It should be highlighted that
Generator 1 will be more frequently operated. Meanwhile, Generator 2 mainly operates at night since solar energy is unavailable at
night. In other words, during the day, the PV and Generator 1 will
operate. At night, Generator 1 and Generator 2 will operate.
The operating reserve as a percentage of hourly load was 10%.
Meanwhile, the operating reserve as a percentage of solar power
output was 25%. Operating reserve is the safety margin that helps
ensure reliability of the supply despite variability in electric load
and the solar power supply. For an example, if the load at an hour is
50 kW and the PV output is 30 kW, this means that the operating
reserve would be 5 kW 7.5 kW 12.5 kW. The diesel generator
must therefore provide 20 kW of electricity plus 12.5 kW of operating reserve. This means that the capacity of the operating
generator must be at least 32.5 kW.
6. Results and discussions
Simulation was performed by comparing the use of standalone
diesel system, hybrid PV/diesel system without battery, and hybrid

PV/diesel system with battery. It was done based on a projection

period of 25 years and 6% annual real interest rate. The PV capacity
was varied from 0 kW to 100 kW while the battery storage was
varied from 12 units to 36 units for comparison purpose. The result
of the simulation is shown as in Fig. 6.
It should be highlighted that the 6% annual real interest rate was
applied to the investment cost as well as the diesel price. Since
HOMER assumes all prices escalate at the same rate, it is not
possible to model the escalation of diesel price at different rate.
Therefore, calculations are based on current diesel prices and do
not reect the effects of possible further increases of the diesel
prices. It is possible, however, to explore the effects of an escalating
diesel price by doing a sensitivity analysis on the diesel price.
It should be noted that the hybrid diesel/battery system is
presented in Fig. 6. However, since the load following dispatch
strategy was used, the generator will not charge the battery, except
that at the beginning of the simulation, the software might assume
that battery was available. But the battery will not be charged after
being discharged for just one single cycle. Therefore, this combination will not be discussed, since its conguration is somehow the
same as the diesel only system. However, it appeared in the
simulation since HOMER software will calculate for each of the
possible combinations.

Fig. 10. Monthly average electric production for hybrid PV/diesel system without battery.

K.Y. Lau et al. / Energy 35 (2010) 3245e3255

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Fig. 11. Total NPC for hybrid PV/diesel system with battery.

6.1. Standalone diesel system

From HOMER simulation, the use of standalone diesel system
was the cheapest, with the total Net Present Cost (NPC) of
$1,482,455. This was according to the global solar irradiance of
5.51 kWh/m2/d and diesel price of $ 0.49/L. Detailed breakdown of
the NPC is shown in Fig. 7. It can be noticed that the largest portion
of NPC came from generator 1, since it operates most of the time.
Monthly average electric production is shown in Fig. 8. It can be
noticed that Generator 1 will operate the most, followed by
Generator 2. This means that Generator 1 served as the base load. If
Generator 1 could not meet the load demand, Generator 2 would
operate to cover for the inadequacy. In other words, Generator 1 is
always ON (1 start/year, according to the simulation). Generator 2,
on the other hand, will be turned ON and OFF depending on the
load demand (847 starts/year, according to the simulation).
It could be further noticed that the monthly average electric
production match the monthly load prole as given in Fig. 2. As
mentioned earlier, the demand for electricity is the highest from
May to August, which resulted in the higher electric generation for
those months. Meanwhile, for period between November to

January, the demand of load is lower. This resulted in lower

generation of electricity, as shown in Fig. 8.
From HOMER simulation, if only generators are used to supply
for all the loads, Generator 1 would produce electricity of
344,493 kWh/year (82%), while Generator 2 would produce electricity of 77,447 kWh/year (18%). This gives the total electricity
generation of 421,940 kWh/year (100%) to meet the load demand.
Since solar photovoltaic is not being considered, there was no
electricity from the PV. It should be noted that the cost of energy
(COE) for diesel only system was $ 0.275/kWh.
To determine the feasibility of hybrid PV/diesel installation, two
types of congurations was analyzed, one without storage element
(battery) and one with storage element (battery) respectively.
6.2. Hybrid PV/diesel system without battery
As highlighted by Shaahid et al. [13], the level of renewable
energy penetration in hybrid systems (deployed around the world)
is generally in the range of 11e25%. From the simulation, the
proposed hybrid PV/diesel system (one unit of 60 kW PV array, two
units of 50 kW diesel generator, without battery) satised the PV

Fig. 12. Monthly average electric production for hybrid PV/diesel system with battery.

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K.Y. Lau et al. / Energy 35 (2010) 3245e3255

Fig. 13. State of charge of battery.

penetration of 22%. The utilization of PV array size more than

60 kW is out of consideration since it would result in higher values
of the total NPC as well as the COE (as compared to 60 kW PV array).
In addition, higher contribution of renewable energy fraction might
result in difculties in control while maintaining stable voltage and
frequency [13]. On the other hand, reducing the PV array size would
result in higher dependence of diesel generators. This is not
favorable since the objective is to reduce the dependence on diesel.
Therefore, the use of 60 kW PV array is justied.
By using the proposed hybrid PV/diesel system without battery
(one unit of 60 kW PV array, two units of 50 kW diesel generator,
without battery), the total NPC was $ 1,669,299. This combination
was the most expensive among the 22% renewable energy fraction.
One of the main reasons is because the power generated by PV is
not being fully utilized. The excess solar power, which could have
been used to charge a battery (which was not available in this case),
was considered a loss. As a result, when the PV cannot meet the
demand, there was no storage element that existed to cover the
increased demand. The generator will have to be operated in order
to cope for the demand.
Both the NPC for Generator 1 and Generator 2 have been
reduced (as compared to standalone diesel system) since PV is
available to supply the load. However, the initial PV cost is quite
high, which mainly contribute to the extremely high total NPC cost
(refer Fig. 9).
The monthly average electric production is shown in Fig. 10. For
Generator 1, no signicant reduction can be noticed as compared to
the standalone diesel system. Electric production from Generator 2
has somehow been reduced due to the existence of PV. The PV array
provided energy of 96,512 kWh/year (22%). In other words, PV
penetration was 22%. Generator 1 provides energy of 292,127 kWh/
year (66%). Generator 2 provides energy of 51,871 kWh/year (12%).
This means that Generator 1 still operates the most, followed by the
PV and then Generator 2. Comparing this system with the

previously analyzed standalone diesel system, the electricity

output of Generator 1 has reduced for about 15%. Meanwhile,
electricity output from Generator 2 decreased by 33%. This means
that the dependence on diesel has also been reduced.
The cost of energy for this type of system is $ 0.309/kWh.
Meanwhile, its operating cost would be $ 96,164/year. Since battery
was not available, the operating hours of Generator 1 was the same
as standalone diesel system. The use of PV caused the operating
hour of Generator 2 to reduce to 3126 hours (4826 hours when
using standalone diesel system). This resulted in a total saving of
diesel, for approximately 16.5% as compared to standalone diesel
system.
However, as mentioned earlier, this type of conguration does
not take into account of energy storage. The electricity production
generally depends on either PV or the generator to supply the load.
If PV is insufcient or unavailable, the generator will take over the
task.
From renewable energy viewpoint, battery storage is important
to ensure that the excess of power produced from PV can be stored
for later use. This would greatly optimize the system. The following
discussion will focus on the hybrid PV/diesel system with battery.
6.3. Hybrid PV/diesel system with battery
From the simulation result shown in Fig. 6, it can be noticed that
the higher number of batteries would increase the total cost of the
system. Therefore, 12 units of batteries (1 h of autonomy) were
considered to be sufcient. Considering the use of hybrid PV/diesel
system with battery (one unit of 60 kW PV array, two units of
50 kW diesel generator, with 12 units of battery), it can be noticed
that operating cost of the system has been reduced to $ 89,170 per
year. This was the cheapest among the different congurations
proposed. This is a huge reduction as compared to the standalone
diesel system. However, the total NPC was still high, which was

Fig. 14. Comparison between different energy systems with high diesel price.

K.Y. Lau et al. / Energy 35 (2010) 3245e3255

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Fig. 15. Total NPC for hybrid PV/diesel system with battery under high diesel price.

about $ 1,593,086. This is due to the extremely high initial capital

cost for PV installation, which will not occur if a standalone diesel
system is used. This is shown in Fig. 11. Despite Generator 1s NPC
still being high, it is lower if compared to the standalone diesel
system. The same principle is applied to Generator 2. However, the
use of the PV, inverter and batteries has added up the total NPC of
the system.
The monthly electrical energy production for hybrid PV/diesel
system with battery is shown in Fig. 12. It can be noticed that PV has
taken over the Generator 1s function as the supply to the base load.
Since battery storage capacity was quite small (only 1 hour of
autonomy supply), its portion can hardly be noticed as shown in
Fig. 12. The PV array provided energy of 96,512 kWh/year (22%).

Generator 1 provides energy of 307,023 kWh/year (70%). Generator

2 provides energy of 32,086 kWh/year (7%). The batteries provide
energy of 2301 kWh/year (less than 1%) due to its low energy
storage.
Up to this point, it should be highlighted that most of the load
demand occur at night time, which is when the PV is not available.
At this time, the battery will function to supply the load, since PV is
not available. Unfortunately, the battery storage can only provide
up to 1 hour of supply. After that, generators will operate to supply
the load.
With the availability of PV, Generator 1 does not need to operate
nonstop throughout the year. It will only operate when the PV and
batteries cannot meet the load demand. From the simulation, the

Fig. 16. Total NPC for standalone diesel system under high diesel price.

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K.Y. Lau et al. / Energy 35 (2010) 3245e3255

Fig. 17. Optimal system type.

start cycle for Generator 1 is 98 starts/year. For Generator 2, it had

405 starts/year.
The state of charge of the battery bank is shown in Fig. 13. Since
May to August has the highest demand of energy, the battery can
hardly maintain its charge. It should be noted that the minimum
battery charge need to be maintained at 40%, as provided by the
specication and should not fall to less than 40%.
The use of battery allows the reduction of Generator 1 and
Generator 2 operating hours. The operating hours for Generator 1
has been reduced to 8545 h. For Generator 2, it has been reduced to
1807 h. This shows that battery has signicant contribution in the
long run. As compared with the hybrid PV/diesel system without
battery, electricity generation from Generator 2 has been reduced
signicantly for this type of system. At the same time, dependence
on diesel was found to be much lower. The total consumption of
diesel has been reduced by about 21%. Besides that, excess electricity from PV has also reduced from 9910 kWh/year (without
battery) to 3999 kWh/year (with battery).

6.4. High price of diesel

As highlighted previously, the price of diesel can be unreasonably high in rural areas. Checks found that diesel is priced at about
RM 7.00 ($ 2.03) per liter in very remote places where the cost of
transportation of goods and fuel is very expensive such as in the Ulu
Baram district, some 200 km inland from Miri, Sarawak. Therefore,
this section seeks to discuss the effect of such high diesel price on
the utilization of hybrid PV/diesel system.
As shown in Fig. 14, the use of hybrid PV/diesel system with
battery has beneted signicantly when the cost of the diesel is as
high as $ 2.03 per liter, with the same solar irradiance of 5.51 kWh/
m2/day as analyzed previously. In such a circumstance, the use of
hybrid PV/diesel with battery was found to have the least total NPC,
approximately $ 4,292,632. Its operating cost would be about $
300,346/year with its COE of $ 0.796/kWh. Fig. 15 shows breakdown of the NPC.
However, if the standalone diesel system was used to supply the
energy, the total NPC would yield up to $ 4,628,908 (refer Fig. 16),
which is 7.8% more compared to the use of hybrid PV/diesel system
with battery. Besides that, the cost of energy would also be higher,
about $ 0.858/kWh, which is about $ 0.09/kWh more expensive
than the hybrid system.

From this simulation, it can be seen that although the initial

capital cost of the hybrid PV/diesel energy system was extremely
high ($ 453,200) as compared to standalone diesel system ($
50,000), it can be compensated within the projected lifetime of 25
years, with the annual real interest rate of 6%. Therefore, for high
price of diesel, it was proven that the use of hybrid PV/diesel system
with battery is the best solution in remote areas.

6.5. Sensitivity analysis

As highlighted previously, the total NPC of hybrid PV/diesel
system with battery was still higher as compared to standalone
diesel system, provided if diesel price is low enough. However, if
the diesel price increases considerably, the total NPC of hybrid PV/
diesel system with battery would be the lowest among all other
systems. For this reason, the value of global solar irradiance and
diesel price has been varied in order to determine the suitability of
the implementation of the different types of energy systems.
Fig. 17 shows the appropriate implementation of those three
generating systems under different global solar irradiance and
diesel price. The optimized option would be such that if the diesel
price is less than $1.05/L, the use of the standalone diesel system
would still be the cheapest among all. The choice of the hybrid PV/
diesel system is only feasible if the diesel price is more than $1.05/L.
On the other hand, it can also be noticed that the use of battery in
hybrid PV/diesel system does not always yield the cheapest solution as compared to the one without battery. In other words, the

Fig. 18. Pollutants emissions for standalone diesel system.

K.Y. Lau et al. / Energy 35 (2010) 3245e3255

3255

system with battery might not signicantly reduce the total NPC
and COE, it has been able to cut down the dependence on diesel. In
addition, it also helps to reduce pollutants, such as carbon emission,
thus reducing the green house effect. On the other hand, it was also
proven that the use of hybrid PV/diesel system with battery would
be more economical if the price of diesel increased signicantly.
With a projection period of 25 years and 6% annual real interest
rate, it was found that the use of hybrid PV/diesel system with
battery could achieve signicantly lower NPC and COE as compared
to a standalone diesel system. As a conclusion, the hybrid PV/diesel
system has potential use in remote areas, especially in replacing or
upgrading existing standalone diesel systems in Malaysia.
Fig. 19. Pollutants emissions for hybrid PV/diesel system with battery.

References
use of battery would become the best option when the diesel price
is more than $1.6/L, or when the global solar irradiance is higher.
This is best explained in the shaded area as shown in Fig. 17.
6.6. Harmful gas emissions
Since the use of diesel generally causes air pollution, in this
section, a comparison between standalone diesel system and
hybrid PV/diesel system with battery is done, in terms of harmful
gas emissions. It should be noted that the analysis assumed no
penalty cost to be imposed for the pollutant. However, if non-zero
cost penalty is imposed for a particular pollutant, HOMER will add
the cost to the total annual cost of the system.
As shown in Fig. 18, for standalone diesel system, the total
emissions of pollutants were 432,259 kg/year.
For the hybrid PV/diesel system with battery, total emissions
were 342,246 kg/year (refer Fig. 19). This has shown considerable
reduction in emission with the introduction of PV system.
7. Conclusion
From HOMER software simulation, it has been demonstrated
that the use of hybrid PV/diesel system with battery (one unit of
60 kW PV array, two units of 50 kW diesel generator, with 12 units
of battery) can signicantly reduce the dependence on solely
available diesel resource. Although utilization of hybrid PV/diesel

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