How Much Can You Save With Solar Energy? A Worked Example

A basic but very common question!electricity to the utility
We're asked this often so here is a a full example of1850 kWh / 2 = 925 kWh
the mathematics to help you decide.925 kWh x 66c = $610 (using the Feed-In Tariff
Please make sure you check with your local utilityquoted above)
company as these figures will vary widely. But theseNow, you have avoided paying for 925 kWh from the
figures are genuine and come from a utility company inutility so:
Australia which is offering these levels of rebate andAvoided electricity purchased from utility is:
tariff prices.925 kWh x 12c/kWh = $111 (the average usage tariff)
If your utility company is offering less, you may be ableTotal potential savings per year = $610 + $111 = $721
to squeeze them with these!!!Total potential savings per month = $65.80 and your
The basis of this analysis a Feed-In Tariff Agreementmonthly repayments for the solar panel system are
available to customers who meet key conditions whichreduced from $166.60 to $100.80.
seem to be fairly typical:Based on the above figures we can establish the
• Energy sent to the Electricity Grid is generated bycompetitiveness of this solution when compared to
Solar PV system and is not greater than 5kW.other countries. A rule of thumb is that the cost of a
• If the customer is residential, the Solar Photovoltaiccomplete solar system installed and operating is about
(PV) system must be located at the principle place of$2.50 to $4.00 per watt (or watt peak is the term the
residence.industry uses). This particular solution has a cost of
• The annual consumption at the property is less$2.70 per watt which probably reflects high levels of
than 100,000kWh per annum.government subsidy as well as a competitive market.
A Feed-In Tariff is a mechanism designed toThe Pay Back Period, being the period until your
encourage the adoption of renewable energy sources.savings equal your costs, is = $4,990 / $721 = 7 years.
Many governments have legislated that utilityAnything under 8 years is reasonable for a
companies must generate a certain percentage ofcommercial solar system.
their electricity from renewable sources. The Feed-InHow does this compare with DIY solar system costs?
Tariff Agreement is one way this can be achieved.We know you can build a DIY solar panel capable of
The cost basis is generally the price at whichgenerating 1.5 kWh for around $1200.
renewable energy sourced electricity can beAnd, as a rule of thumb the solar panel component is
generated by the utility. This principle was firstabout 50% of the total system cost where you are
explained in Germany's 2000 RES Act:selling to a utility. So you total system cost is about
In the case of the Australian utility company, the$2,400.
government has legislated that the feed-in tariff is toTotal potential savings per year are unchanged = $610
be 60c per kWh and the utility has added 6c per kWh+ $111 = $721
to this making 66c per kWh.But, the Pay Back Period is now = $2,400 / $721 = 3.3
If you take as an example, a typical 1.5 kW in ayears.
mid-latitude region around 35 -40 degrees North orPlease note that while the figures we have used are
South of the Equator. This should generatebased on a real example, they will vary from country
approximately 1850 kWh per year.to country and state to state. The real message is
Assuming the solar installation cost is $3,200 includingthat DIY solar panels do have a significantly shorter
taxes. Many utilities will offer 20% down and interestPay Back Period. They are very much worth
free payments via your power bill over two years.considering.
Cost price including installation = $4,990.00We hope these points help you in your decision to build
Deposit = $1,000.00your own solar panels. It will help your pocket AND
Monthly Payments = $166.60help the Planet. And that is very much worth doing.
Assume you sell 50% of your solar generatedThank you for reading this article.