Investigating the option of installing small scale PVs on facility rooftops in a green supply chain

Industry practitioners and policy makers are under increasing pressure to promote green supply chains through the integration of renewable energy sources. Changing facilities from net energy users to net energy producers is a major concern for supply chain managers who are interested in greening their business. Building integrated photovoltaics (BIPV) is an innovative design idea to achieve energy positive buildings. In a BIPV building, photovoltaic (PV) arrays are integrated into the structure of the building in order to transform the incident solar radiation to clean energy that can be used in facility operations. This option is dependent on the economic attractiveness of the solar PVs, which, in return, depends on the policies (incentives, subsidies, feed-in tariff) in effect at the facility location, the efficiency of the PVs installed, and the amount of incident solar radiation at the facility location. We present an economic model that calculates the cost per kWh capacity of solar PVs installed and then integrate the decision of installing PVs of different sizes on the facility rooftops of a supply chain subject to the different environmental policies available. We study the implications of our model based on a sensitivity analysis for different carbon credit prices, PV generation costs, and feed-in tariff prices.