In this article an economic and environmental study is carried out on PV solar energy installations connected to the Spanish electrical grid system. The study has been performed on installations situated in the city of Zaragoza (with an irradiation value approximately equal to the average value for Spain). Initially, an economical study is performed, proposing different scenarios where different values of interest rate and energy tariffs are considered. The following parameters are used to determine the profitability of a PV installation: the Net Present Value and the Pay-Back Period. Furthermore, the environmental benefits of PV systems connected to the grid have been evaluated. This has been accomplished using the Life Cycle Analysis theory of the systems, calculating the recuperation time of the invested energy, the contamination or emissions avoided and the externality costs. Finally the possible effects of the application of the Kyoto Protocol have been studied. (c) 2005 Elsevier Ltd. All rights reserved.