A basic but very common question!
We're asked this often so here is a a full example of the mathematics to help you decide.
Please make sure you check with your local utility company as these figures will vary widely. But these figures are genuine and come from a utility company in Australia which is offering these levels of rebate and tariff prices.
If your utility company is offering less, you may be able to squeeze them with these!!!
The basis of this analysis a Feed-In Tariff Agreement available to customers who meet key conditions which seem to be fairly typical:
• Energy sent to the Electricity Grid is generated by Solar PV system and is not greater than 5kW.
• If the customer is residential, the Solar Photovoltaic (PV) system must be located at the principle place of residence.
• The annual consumption at the property is less than 100,000kWh per annum.
A Feed-In Tariff is a mechanism designed to encourage the adoption of renewable energy sources. Many governments have legislated that utility companies must generate a certain percentage of their electricity from renewable sources. The Feed-In Tariff Agreement is one way this can be achieved. The cost basis is generally the price at which renewable energy sourced electricity can be generated by the utility. This principle was first explained in Germany's 2000 RES Act:
In the case of the Australian utility company, the government has legislated that the feed-in tariff is to be 60c per kWh and the utility has added 6c per kWh to this making 66c per kWh.
If you take as an example, a typical 1.5 kW in a mid-latitude region around 35 -40 degrees North or South of the Equator. This should generate approximately 1850 kWh per year.
Assuming the solar installation cost is $3,200 including taxes. Many utilities will offer 20% down and interest free payments via your power bill over two years.
Cost price including installation = $4,990.00
Deposit = $1,000.00
Monthly Payments = $166.60
Assume you sell 50% of your solar generated electricity to the utility
1850 kWh / 2 = 925 kWh
925 kWh x 66c = $610 (using the Feed-In Tariff quoted above)
Now, you have avoided paying for 925 kWh from the utility so:
Avoided electricity purchased from utility is:
925 kWh x 12c/kWh = $111 (the average usage tariff)
Total potential savings per year = $610 + $111 = $721
Total potential savings per month = $65.80 and your monthly repayments for the solar panel system are reduced from $166.60 to $100.80.
Based on the above figures we can establish the competitiveness of this solution when compared to other countries. A rule of thumb is that the cost of a complete solar system installed and operating is about $2.50 to $4.00 per watt (or watt peak is the term the industry uses). This particular solution has a cost of $2.70 per watt which probably reflects high levels of government subsidy as well as a competitive market.
The Pay Back Period, being the period until your savings equal your costs, is = $4,990 / $721 = 7 years. Anything under 8 years is reasonable for a commercial solar system.
How does this compare with DIY solar system costs?
We know you can build a DIY solar panel capable of generating 1.5 kWh for around $1200.
And, as a rule of thumb the solar panel component is about 50% of the total system cost where you are selling to a utility. So you total system cost is about $2,400.
Total potential savings per year are unchanged = $610 + $111 = $721
But, the Pay Back Period is now = $2,400 / $721 = 3.3 years.
Please note that while the figures we have used are based on a real example, they will vary from country to country and state to state. The real message is that DIY solar panels do have a significantly shorter Pay Back Period. They are very much worth considering.
We hope these points help you in your decision to build your own solar panels. It will help your pocket AND help the Planet. And that is very much worth doing.
Thank you for reading this article.
We're asked this often so here is a a full example of the mathematics to help you decide.
Please make sure you check with your local utility company as these figures will vary widely. But these figures are genuine and come from a utility company in Australia which is offering these levels of rebate and tariff prices.
If your utility company is offering less, you may be able to squeeze them with these!!!
The basis of this analysis a Feed-In Tariff Agreement available to customers who meet key conditions which seem to be fairly typical:
• Energy sent to the Electricity Grid is generated by Solar PV system and is not greater than 5kW.
• If the customer is residential, the Solar Photovoltaic (PV) system must be located at the principle place of residence.
• The annual consumption at the property is less than 100,000kWh per annum.
A Feed-In Tariff is a mechanism designed to encourage the adoption of renewable energy sources. Many governments have legislated that utility companies must generate a certain percentage of their electricity from renewable sources. The Feed-In Tariff Agreement is one way this can be achieved. The cost basis is generally the price at which renewable energy sourced electricity can be generated by the utility. This principle was first explained in Germany's 2000 RES Act:
In the case of the Australian utility company, the government has legislated that the feed-in tariff is to be 60c per kWh and the utility has added 6c per kWh to this making 66c per kWh.
If you take as an example, a typical 1.5 kW in a mid-latitude region around 35 -40 degrees North or South of the Equator. This should generate approximately 1850 kWh per year.
Assuming the solar installation cost is $3,200 including taxes. Many utilities will offer 20% down and interest free payments via your power bill over two years.
Cost price including installation = $4,990.00
Deposit = $1,000.00
Monthly Payments = $166.60
Assume you sell 50% of your solar generated electricity to the utility
1850 kWh / 2 = 925 kWh
925 kWh x 66c = $610 (using the Feed-In Tariff quoted above)
Now, you have avoided paying for 925 kWh from the utility so:
Avoided electricity purchased from utility is:
925 kWh x 12c/kWh = $111 (the average usage tariff)
Total potential savings per year = $610 + $111 = $721
Total potential savings per month = $65.80 and your monthly repayments for the solar panel system are reduced from $166.60 to $100.80.
Based on the above figures we can establish the competitiveness of this solution when compared to other countries. A rule of thumb is that the cost of a complete solar system installed and operating is about $2.50 to $4.00 per watt (or watt peak is the term the industry uses). This particular solution has a cost of $2.70 per watt which probably reflects high levels of government subsidy as well as a competitive market.
The Pay Back Period, being the period until your savings equal your costs, is = $4,990 / $721 = 7 years. Anything under 8 years is reasonable for a commercial solar system.
How does this compare with DIY solar system costs?
We know you can build a DIY solar panel capable of generating 1.5 kWh for around $1200.
And, as a rule of thumb the solar panel component is about 50% of the total system cost where you are selling to a utility. So you total system cost is about $2,400.
Total potential savings per year are unchanged = $610 + $111 = $721
But, the Pay Back Period is now = $2,400 / $721 = 3.3 years.
Please note that while the figures we have used are based on a real example, they will vary from country to country and state to state. The real message is that DIY solar panels do have a significantly shorter Pay Back Period. They are very much worth considering.
We hope these points help you in your decision to build your own solar panels. It will help your pocket AND help the Planet. And that is very much worth doing.
Thank you for reading this article.
If you are at all interested in harnessing solar energy and you have read this far so we think you are! click http://www.ubuildsolarpanel.com and we will give you the opportunity to receive a series of newsletters FREE.
These will help you understand how solar energy can be harnessed and assist you in deciding if making your own solar panel is for you. We've done the hard work and analyzed the available market for DIY solar panel information. So come on - give it a go - http://www.youbuildsolarpanel.com
These will help you understand how solar energy can be harnessed and assist you in deciding if making your own solar panel is for you. We've done the hard work and analyzed the available market for DIY solar panel information. So come on - give it a go - http://www.youbuildsolarpanel.com
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