Expanded Summary

This article presents an empirical investigation of the financial and economic effectiveness of private photovoltaic (PV) investments in Georgia, drawing on a structured survey of thirteen organisations (twelve plant-owning companies and one commercial bank) whose combined installed capacity reaches 52.12 MW. The bank — JSC ProCredit Bank — was surveyed twice, both as a self-consuming owner of a 0.1 MW rooftop installation and as the principal financier of more than one hundred PV projects with an aggregate capacity of 32.5 MW. The mixed-methods design combines descriptive statistics, Pearson correlation, and a comparative scenario analysis based on annuity-loan financial modelling.

The research tested seven hypotheses (H1–H7), all of which were empirically confirmed. The mean payback period of Georgian PV projects is 4.84 years — about 76% shorter than the European average of 8.5 years. The principal drivers of this differential are the substantially lower capital expenditure in Georgia (USD 400–450 per kW versus EUR 800–1,200 in Europe), favourable solar irradiance, low local labour and administrative costs, and the dominance of the self-consumption business model, which captures the full retail electricity tariff rather than the lower wholesale price.

Battery storage is virtually absent in the surveyed sample (7.7%). Four reasons emerged: high battery costs, a flat day-and-night tariff structure that gives no time-of-use signal, the existing net-metering scheme that turns the grid into a free virtual battery, and the limited local technological maturity. The transition to net-billing — already legislated for 2027 — is expected to reverse this picture and create a structural demand for storage. A risk perception index, derived from coded interview statements, exhibits a strong negative correlation with regulatory perception (Pearson r ≈ −0.755, p < 0.01), confirming that companies which view the regulatory environment unfavourably also perceive higher investment risk.

A scenario analysis on a representative project (1,130 kW, total capital expenditure of GEL 1.135 million, seven-year annuity loan at fourteen percent) demonstrates that a ten-percent investment grant under the «Produce in Georgia» programme reduces the payback period from 4.73 to 4.14 years and raises the annual return from 21.1% to 24.2%. Adding a three-percentage-point interest-rate subsidy further compresses the payback to 3.80 years and lifts the return to 26.3% — a 5.2-percentage-point improvement on the unsubsidised case. Seventy-five percent of surveyed firms finance their projects with 80–100% bank debt, underscoring the catalytic role of the green-finance segment, particularly for SMEs.

Three business models are identified: self-consumption (69.2% of firms, with the highest mean return of 22.4%), wholesale sale via PPA/CFD (15.4%, lowest return of 15.9%), and the hybrid lease/VPP model (15.4%, return of 18.6%). Self-consumption outperforms because it captures the full retail tariff (USD 0.10–0.12 per kWh) rather than the wholesale rate (USD 0.056–0.059), but its advantage will erode under net-billing unless storage integration accompanies new installations.

The study yields seven policy recommendations: (i) re-design the «Produce in Georgia» programme as «smart subsidy», restricting grants to projects that include battery storage equivalent to at least 20% of installed capacity; (ii) require distribution operators to publish an interactive map of free grid capacity at the substation level; (iii) accelerate grid modernisation; (iv) introduce an EU-harmonised guarantees-of-origin system in anticipation of CBAM (Carbon Border Adjustment Mechanism); (v) deepen green-finance instruments and SME financial literacy; (vi) encourage retroactive battery integration in existing self-consumption sites; and (vii) promote complementary investment in wind and hydro for seasonal balance.

The principal limitation of the study is the relatively small sample (N = 13), partially offset by the high market share of the surveyed entities. Overall, the findings indicate that Georgia\'s PV sector stands at a transitional stage of development: market formation has matured, financial returns are robust, but the sustainable scaling of the sector hinges critically on regulatory stability, expansion of green-finance instruments, and the integration of energy-storage technologies that the new net-billing regime is expected to incentivise.

Keywords: solar energy, photovoltaic investment, return on investment, net metering, net billing, green finance, energy storage, Georgian private sector.