With rising price of oil and other conventional fuels, world is turning towards renewable energy to enable it to meet the growing demand for electrical power requirements. As an option, solar photovoltaic (PV) is gaining popularity, though its high initial cost is a major barrier for its widespread use. It can supply electricity, as stand alone grid connected and isolated PV hybrid energy systems. This paper discusses the techno-financial feasibility study for an electrical power supply system for a rural (island) village. The design tool HOMER was used as the sizing and optimization tool. Solar radiation and related load information are the input data required, and the procedure has been applied to the island community of Kohjig, located in the gulf of Thailand. The results of the analysis show that there are potential niche markets for hybrid power supply system for application in an island community. Their attractiveness is enhanced due to the rising cost of fossil fuel transportation and the difficulty in extending the distribution system over the island. The study of Kohjig shows a system comprising a 15 kWp PV system connected to the diesel generator together with three days of battery storage can provide about three fourth of the load. This would allow for fuel savings of 47,655 liters/a.
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