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Comparing Traditional Methods and Real-Life Options to Evaluate Photovoltaic Solar Projects in Colombian Public Hospitals

10.24050/reia.v23i45.1932
Published 2026-01-01
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Abstract

This research article performs a comparative analysis between traditional financial evaluation methods—such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PRP)—and the real options approach, applied in this case to solar photovoltaic projects in public hospitals in Colombia. Based on a theoretical review and practical application of both approaches, the limitations of traditional methods in highly uncertain scenarios characteristic of the healthcare sector are identified. This study presents a case study based on the application of the binomial real options model, demonstrating several advantages in strategic decision-making, the incorporation of operational flexibility, and improved efficiency in the use of public resources. This methodological approach not only enriches the technical perspective with which public investments are valued but also introduces analytical elements that allow for more effective management of the risks associated with projects with high contextual variability. As a result, the analysis reveals that the real options approach allows for greater leverage of the implicit value in sequential and adaptive project decisions. This article not only seeks to provide technical tools to strengthen the management of renewable energy investments within the hospital system, but also contrasts both methodologies. It also presents visual aids, formulas, and cases that systematize the findings and facilitate their practical application.

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