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Solar Panel Cost Per Kwh 2014

The economics of commercial solar power an example of a 50kW system

This tutorial is going to show you the financialsfor a 50 kilowatt commercial solar system. If you’re thinking of solar this is the essenceof it. This is a demonstration in the form of tutorial of our financial modeling process.It will show you some actual numbers about what a solar power systems costs and how muchit will benefit you. A lot of people have misconceptions about solar power. So beforeI jump into the financial model here are some points clarified. Solar is not your only sourceof power. You still keep the grid and, therefore, have a stable power supply. You can’t eliminateyour bill. You still have costs on your power bill which don’t necessarily vary accordingto your electricity consumption. For example,

there are fixed daily rates and charges basedon peak demand called KVA amongst others. In addition, when the sun isn’t shinning,you pay for the power that you use. Solar isn’t a switched system. So it’s not as ifyour business runs on solar power then that switches off then that runs on the grid again.I call this the Toyota Prios view of the world. In reality it is more of a blending of resources.Grid power and solar power. Your solar panels are always producing power as long as thereis light. If the sun isn’t shining it doesn’t provide power and you will then run off gridpower. When it’s cloudy it still provides some power and in all cases it just blendswith your existing grid power supply so you

always have a full supply of clean electricity.That system is passive; you don’t need to do anything. A steel fabricator once saidto me solar won’t work for us; we pull in an amazing amount of power. Solar is not tryingto supply all of that power, just diminish your demand from the grid. Here’s an exampleand those numbers. Let’s say you’re looking at a 50 kilowatt system just for the sakeof an example. Let’s say you have a metal roof and we put the panels on tilt framesand we use good quality components such as a top brand of solar panel and a good Germaninverter and a quality monitoring system. The system might consist of 200 panels andtake up approximately 400 square meters of

roof space if the system is installed flaton roof. So here are those actual numbers. The full cost of that system will be around$110,000 excluding GST. You then get a point of sale rebate for the STC’s, which are createdand are worth around $35,000. So it becomes an out of pocket cost of around $75,000. Underliningour model is an assumption about how much power is produced. We know how much powerany given system size produces because we can observe it by monitoring and the CleanEnergy Council has published some average output data for different regions. This outputwill vary day by day, season by season, but will be correct year by year. Based on theClean Energy Council guidelines for Sydney

a 50 kilowatt system will produce around 195kilowatt hours per day. When we create a financial model we’re fairly conservative about sayingwhat this output is. We also reduce this around the number of workdays your business has becauseit is only power that is used as it is produces that matters and you don’t get paid for exportedpower in most commercial scenarios. So on a 50 kilowatt system is around 195 kilowatthours per day. We analyze what you pay for hour and this is not 100% intuitive from yourpower bill. We look at the variable costs which are made up from three categories ofyour bill, the main rate, the network charges, then the insularly charges. In many businessesthis will all add up to be between 11 and

25 cents per kilowatt hour. This is the valueof power to you as you are substituting selfgenerated solar power for grid power. In our model werun an analysis where we say power will rise by a certain percent per year. So here’s anexample of the savings, year 1, year 2, year 3, and so on. We then map this out comparedto the initial investment and we get a graph that shows this payback. Let’s say you borrowedmoney to put the system on. Using the cost of finance we will also model that and thiswill have two impacts. First it makes it easier to buy, sometimes with no initial capitaloutlay. Second, it extends the payback by a year or so due to interest payments. Whenwe create the financial model the purpose

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