Solar Electricity – Retirement Investment

Downsizing to a smaller new house for your retirement?  Don’t forget to think about solar power.

Last week I revised a post ‘Solar Power is it Worth It?‘  but if you are approaching retirement, like me, there can be an even bigger financial advantage in having solar installed.

Differing Lifestyle

Because we are both out at work during the weeks I calculated that with a 1.5kw system costing around $3,000 panels we will save:

      • Weekdays $1.09
      • Weekends $1.40

See the original post to see how I arrived at these figures

After retirement its likely that our weekday usage patterns will be more like the weekends so our annual savings are expected to be 365 x $1.40 = $511.

Effect on Pension

I am assuming that you will have some money from superannuation, but not enough to mean you won’t be eligible for a state pension.

If you have more assets then the Government limits your pension. It will be reduced by $39 per annum for every extra thousand dollars. (Basically the government takes the interest)

Invest $3,000 in a solar power system and that becomes part of your house, which is excluded from the governments asset test. You will therefore be eligible for an extra $117 a year pension.

Summary

The expected benefit for your $3,000 investment is:

$511 + $117 = $628.

20.9% Return with a Payback of Under 5 years

I don’t know about you but i’m hoping to live a lot longer than 5 years beyond retirement!

For more about solar panels see Sustainability, Solar Power

To see an updated review see Cost / Benefits

 

Solar Electricity – Is It Worthwhile? (2014)

There is a lot of marketing information around about Grid Connected Solar Panels but not many independant facts. Here’s an example of an evaluation of a basic system for a house.

  • We use around 16kw hours (kwhr) of electricity per day which is fairly typical;
  • For each 1kw of solar panels we can expect to generate around 1300kw hours per year that’s an average around 3.5 kw hours per day;
  • For a basic 1.5kw system we should generate on average about 5.2kwhrs;
  • Our current tariff for power is $0.3152 /kwhr regardless of time of day;
  • I have done the evaluation assuming that any surplus power is sold back at$0.08/kwhour.

How Much Will Be Saved?

Weekdays (as we both work and the house is empty during the day) we should be able to put at least 2.5 kwhrs into the grid and use a maximum of 2.7kwhrs running fridges etc)

Income 2.5kwhr @ $0.08 = $0.24

Saving 2.7kwhr @ $0.3152 = $0.85

Benefit = ($0.24 + $0.85) x 260 days = $283

Weekends we probably will only put 1kwhr into the grid as we may well be at home using power for TVs, heating or cooling, etc.

Income 1kwhr @ $0.08 = $0.08

Saving 4.2kwhr @ $0.3152= $1.32

Benefit = ($0.08 + $1.32) x 104 days = $145

Total annual benefit is $428.4

Is it worth it?

Well there are some 1.5kw systems being advertised now with various rebates which cost less than $3000.

If you had $3000 on term deposit returning 4% that’s $120 a year, which would then be taxed. Alternatively if you put the cost on your mortgage that will mean that you are borrowing $3000 at a rate of around 6%. That’s costing around $180.

From these figures it looks like for the basic system you will be around $250-$310/year better off.

NB. I first did a Cost Review in 2011. Since then the cost of panels, and the government subsidies, have gone down. The cost of power from the grid has gone up. The overall financial advantage is around the same.

 

To see an updated review see Cost / Benefits

 

For similar posts see Solar Electricity in the Sustainability Tab

 

Solar Power – Reasons for Low Output

For each kw of installed capacity of solar panels on average you can expect to generate 3.5kwhrs per day. This can however vary considerably for a variety of reasons.

Monthly Variation

On a peak summer day you may be able to generate 6 or 7kw hrs per day.

In winter it can be quite different. typical reasons include:

  • Shorter Days – The panels may only get around 6 hours of sunlight.
  • Weather – For most of us winter means more clouds and rain which reduce the sunlight.
  • Less than Optimum Angle With the sun low in the sky you won’t have the panel fully facing the sun unless you can change the angle.

Partial Shading

One of the things that most people don’t realise is that solar panels are ‘team players’.

The power that each panel in a string(circuit) generates is limited by the performance of the worst performing panel in the string.

This means that if one 200w panel in a string of 6 is shaded by as little as 10% the loss can be 120w.

That’s 10% of the total string 6 x the 20w of the single panel)

To minimise this problem you need to ensure:

  • All obstructions are minimised. Even a TV aerial can make a difference.
  • If you have panels on different areas ( for example on each on a different roof) they should be on different strings with separate inverter inputs.

Dirt

Any dirt on the panels will reduce the effectiveness so a regular clean will help retain efficiency. Its also worth thinking about keeping birds from perching on the top edge and crapping on the panels. (You can get some plastic spikes to fasten to the panels)

Heat

Typically panels are at their highest efficiency at a panel temperature of 25degees C. In the middle of summer the panel temperature can be 80 degrees. If you panel is mounted to allow air movement around the panel this will help control the temperature and help efficiency.

 

See Solar Electricity for more posts

 

Why I Don’t Have Mono-Crystalline Solar Panels


Several people have commented that my panels look different to those on other houses.

Most solar PV installations use Mono-Crystalline panels, because they are smaller for the same power rating.

The panels on my roof are Kaneka Thin Film Panels.

Here are the reasons why:

Efficiency In Real World Temperatures

When you see a panel power rating it is based on laboratory conditions with a panel temperature of 25oC.

In Australia, on your roof, the panel temperature is generally somewhere around double the ambient temperature, thus most panels operate above 25oC most of the time.

Typical crystallines panels lose power @ 0.45% per degree C above 25oC.

Typical thin-film panels lose power @ 0.25% per degree C above 25oC.

This means that on a typical 25oC day with a panel temperature of 50oC

  • A 1000watt mono-crystalline system may be generating 885watts.
  • A 1000watt thin film system is likely to be generating a higher power of 935watts.

On hotter summer days when panel temperature can rise to over 80 degrees the difference will be even greater.

Shading

Thin film panels are bigger than mono-crystalline panels means that more of your roof is shaded by the panels helping to keep the house cooler.

Energy Payback

Thin film panels have much lower embodied energy than mono-crystalline panels meaning that the energy involved in the production is recovered within two years of use.

Better Performance When Partially Shaded

Partial shading effects can be quite significant in overall system efficiency. Thin film panels however are less susceptible to shading.

Cost

In spite of the above advantages for Thin Film panels the cost per installed watt is around the same as Monocrystaline panels.

More independent information about solar panels in Australian conditions can be found at the Desert Knowledge Solar Centre at Alice Springs

 

For similar posts see Solar Electricity in the Sustainability Tab

 

Types of Solar Panels for Electricity

From some of the adverts you see you would think there is only one sort of solar panels…. in fact there are several alternatives.

The type of panels generally available are:

  • Monocrystalline solar panels The highest cost but the most efficient with a long history of use.
  • Poly-crystalline Similar to mono-crystalline panels, but the silicon used has a different structure which is easier to make and therefore cheaper but less efficient in watts per m2.
  • Thin-film This includes several technologies of which the latest is CIS. These panels are the usually the lowest cost panels but can be twice the area of a Monocrystalline panel for the same output.
  • Hybrids There are also a number of hybrid panels around which combine different technologies to improve all round performance.

Don’t get too confused by the marketing hype and the quoted efficiencies.

Unless you are have limited space to put the panels the best panel is the one that produces power at the smallest price per watt and will continue to do it for the longest time.

An advantage of having larger, but lower efficiency, panels is that more of the roof is shaded by the panels in the summer. This will reduce the heat gain in the roof space, saving on cooling costs.

The only times that efficiency becomes important is when;

  1. You are running the whole house off panels and you need more area for low cost panels than you have got roof area – more for off grid applications.
  2. You only have a small North-facing roof.
  3. The roof is Badly Shaded.

As well as the cost per watt you should also looking for panels from reputable manufacturers that come with a long guarantee (Up to 25 years). Additionally you would be advised to ask for a 5 year installation guarantee. 

 

Solar Electricity – Is It Worthwhile? (2011)

Since this post was written in 2011 there has been many changes; in subsidies, the cost of systems, and  Power Supplier charges. For the  an updated post see:  Solar Electricity – Is It Worthwhile? (2014)

There is a lot of marketing information around about Grid Connected Solar Panels but not many facts. Here’s how I evaluate a basic system for a house in a Melbourne Suburb.

  • We uses around 16kw hours (kwhr) of electricity per day which is fairly typical;
  • For each 1kw of solar panels we can expect to generate around 1300kw hours per year that’s an average around 3.5 kw hours per day;
  • For the basic 1.5kw system we should generate on average about 5.2kwhrs;
  • Our current tariffs for power is $0.2025 /kwhr regardless of time of day;
  • I Have done the evaluation assuming that any surplus power is sold back at the peak rate. Some states have attractive buy back rates that will improve your financial situation.
  • As part of going solar our tariffs will change to:
    • $0.2625/kwhr peak times (7.00am -11.00pm Monday to Friday, 80 hours per week)
    • $0.1075/kwhr off peak (all times other than peak, 88 hours per week)

How Much Will Be Saved?

As we are out of the house for at least half the peak period the cheaper off peak power should more than offset the more expensive peak power so our average power cost should remain similar to our current tariff.

Weekdays (as we both work and the house is empty during the day) we should be able to put at least 2.5 kwhrs into the grid and use a maximum of 2.7kwhrs running fridges etc)

Income 2.5kwhr @ $0.0.265 = $0.66

Saving 2.7kwhr @ $0.2625 = $0.70

Benefit = ($0.66 + $0.70) x 260 days = $353

Weekends we probably will only put 1kwhr into the grid as we may well be at home using power for TVs, heating and cooling, etc.

Income 1kwhr @ $0.265 = $0.265

Saving 4.2kwhr @ $0.1075= $0.45

Benefit = ($0.265 + $0.45) x 104 days = $74

Total annual benefit is $427

(I believe my calculations have been fairly conservative and the actual benefits could be higher) PLUS For every $0.01 of premium rate buy back you will get another $6.24 per annum.

Is it worth it?

Well there are some 1.5kw systems being advertised now with various rebates which cost less than $3000.

If you had $3000 on term deposit it would now (Jan 2010) be returning 6% that’s $180 a year, which would then be taxed. Alternatively if you put the cost on your mortgage that will mean that you are borrowing $3000 at a rate of around 8%. That’s costing around $240.

From these figures it looks like for the basic system we could be around $187 better off. Even more if you spend less than $3000 or can get a premium buy back rate.

If you are looking to get a system you need to know that there may additional charges for things like:

  • Installation on a tiled roof;
  • Frames on a flat roof to provide the best angle for the panels;
  • Split array over two different sections of roof;
  • Lifting and access if you have a 2 storey houses;
  • and travel charges if you are outside the metropolitan area.

For similar posts see Solar Electricity in the Sustainability Tab