The most common question we are asked about solar is, “How long will it take to pay my system off???”
As every home is different and people use energy differently there is no exact answer, so we need to assess every house and its occupants to get a close answer. In most case it’s a educated guestimate but we can give a good indicator whether solar will give you the returns you are looking for.
A solar system produces energy only in the daytime, starting gradually in the morning, peaking in the middle of the day and then declining towards the evening. By managing your consumption around this production curve you will maximize your savings.
Good Management Saves the Most Money
The time of day when you use your energy is a big factor in how much you save. This article will show a few scenarios of saving for a 6kw system for 3 different situations. In most cases you can draw your own conclusions in where you are positioned with these scenarios and give yourself a basic estimation on return of investment.
How you manage your energy usage is the number one factor on how much you save. The more energy you can consume when the sun is shining, the more you will save. The aim is to consume as much of your home made energy as possible. Selling back to the grid will be necessary if you are not consuming everything you produce, and feed in tariffs are a lot less than your purchase price. It makes no sense to sell a majority of your power for 10 cents and buy it back at night for 28.6 cents. So good management is vital to maximize your savings.
Solar Finance Scenarios
The following 3 scenarios are based on the cost of power being 26c per kwh plus GST, totaling in 28.6 cents per kwh. Cost of the 6kw system installed using a mid price system was $6000. Production amounts are based on averages over the entire year and all consumption figures are based on average usage figures. Production varies according to the seasons, in Summer the system produces more energy than in Winter. These scenarios are based on average figures for offering ideas and suggestions on payback times only. Please talk to us for a more accurate figure based on your home and usage patterns.
To gather exact information on your systems production, and your consumption we recommend installing a Smart meter that most good inverter companies manufacturer, or a 3rd party meter and program from Solar Analytics or Power genius. UV Power install these products with your solar system if needed. For the small additional outlay you have complete knowledge of your homes usage and your inverters production. With this data you can gather real time data to assist in managing and maximizing your systems returns.
SCENARIO 1. Bob Smith
Best case scenario!
Bob is a large energy user during the day. He has gas hot water, swimming pool , dishwasher, washing machine, and runs a home office which has 2 computers, lighting and a small split system airconditioner. Before solar he consumed 38kwh of energy average per day.
A 6kw system was installed on both a East and West facing roof. Total production per day 26kwh.
Bob is aware of his power production curve and manages his energy consumption around the amount of energy his solar is producing. In most cases everything produced is consumed on site and very little is sold back to the power grid.
26kwh produced and 32kwh consumed through the day light hours. All solar produced is consumed. Weekdays the office is run and weekends all appliances in the home are used to maximize energy consumption.
26kwh x 28.6 cents = 7.43 per day. X 365 days = $2714 in savings per year. In this scenario bob will pay his system off in 2.21 years resulting in a 45% ROI.
This is a best case scenario and is possible in a few circumstances but unlikely for most of us. It gives an indication of what can be achieved for a standard domestic solar system for a high user of energy throughout the day and who is home 365 days of the year.
SCENARIO 2. Tom and Betty Jones.
Average consumers in a Brisbane neighbourhood.
Tom and Betty have a 3 bedroom house with a pool, electric hot water system dishwasher and washing machine. 2 School aged children and Betty works part time 3 days per week.
The 6kwh of solar was installed half on a North facing roof and half on the West roof.
In this scenario we installed a hot water timer to switch the hot water on at 11am to 2pm. The hot water system consumes 3.6kw of energy. The swimming pool timer was set from 9am to 11am, and 1pm to 4pm. A total of 5 hours per day pool pumping was all that was needed to keep the pool in perfect order. The pool filter and chlorinator consumes 1.5kw of energy. On the days, Betty is home all clothes washing is done, computers on and the home office operating, and energy is consumed gradually over the day.
When the kids come home from school there is a small peak of consumption with the fridge opened a lot, TV and computers switched on.
The system as designed with panels facing West. This allows for some additional production in the afternoon to accommodate the extra afternoon usage.
Solar production amount 27kwh per day. Solar usage amount 15kwh per day.
15kwh x 28.6 cents = $4.29 per day.
12kwh exported at 10 cents+ 1.20 per day
Total savings= $5.29 per day x 365 = $1930 per year. ROI 3.21 years. And 31% ROI
SCENARIO 3. Kevin & Sharron
Both Kevin and Sharron run a small business and work 12 hour days Monday to Friday. On weekends they are home and use the aircon and home theatre all day. They have no pool and only stand by power running on their massive entertainment system.
We installed a 6kw system on their Northern roof producing on average 28kwh per day. We switched the hot water onto a timer to run between 11am and 1pm.
Monday to Friday daytime usage.
8kwh x 28.6 cents= $2.28.
20kwh exported x 10 cents. $2.00
TOTAL: $4.28 per day x 260 days= $1372
Saturday and Sunday usage.
20kwh x 28.6 cents $4.56.
8 kwh x 10 cents= $.80
Total $5.36 per day x 104 days = $557
$1372 + $557 = 1929 per year
31% ROI or 3.2 year payback.
How You Can Save with Solar
These 3 scenarios give a broad overview of potential savings from a solar system. I prefer to offer more conservative estimates and are more comfortable with estimates based on 4 years and a 25% ROI, to allow for some margin of error, and real world fluctuations with our busy lifestyles. But I hope this gives an indication of how much you can save with solar.
Power prices are increasing, and the price of solar has dropped. The system that this price is based on a is mid quality and priced system, so we can offer cheaper systems to this and also premium quality systems. Every house is slightly different so prices will vary according to your roof layout, the condition of your meterboard and the ease of installation.
The only way to gain exact return is to have a UV Power consultant to visit and do an analysis of your home, and offer a quote based on what is best for you.
We also offer finance, from as little as $28 per week, leaving you cash flow positive after installing your system. SO the amount you pay on the finance of your system will be less than your would be paying on your power bill.
