Example based on a 3.96KW System on a domestic house
House uses a total of 3300 kWh of electricity per annum.
House generates 3200 kWh of electricity per year from the solar
electricity system (Generation Tariff) - conservative
estimate
The occupants use 1600 kWh of the electricity they generate
(Avoided Costs) and export 1600 kWh to the grid because it is
generated at times it does not use it (Export Tariff)
House uses 3300 kWh of electricity so needs to import 1700 kWh
of electricity from the grid to meet this, a reduction of 1600
kWh compared to the time before the panels were installed.
Current price of imported electricity is
12.91p/KWH (Ecotricity New Energy Plus 100% Green Energy
rate).(Avoided Costs)
The household receives annual benefits in three different
ways:
-
Generation Tariff: A fixed price for each unit
(i.e. kWh) of electricity generated by the solar electricity
system, whether used within the home or exported, guaranteed
for a period of 25 years at a rate of 41.3p/kWh for 3200kWh
= £1321.60
-
Export Tariff: A price for each unit of
electricity generated by the solar electricity system and
exported to the grid, guaranteed for a period of 25 years at a
minimum rate of 3p/kWh for 1600kWh = £48.00
-
Avoided Costs: The savings from reducing the
import of electricity by using the electricity generated from
the solar electricity system, thus providing lower bills and
the benefit of being at least partially protected from future price
rises in electricity 1600kWh @ 12.91p = £206.56
Total Annual Benefits = £1576.16
It should also be noted that the cost of purchasing electricity
from the grid will inevitably rise in the future which will
mean even greater savings!
Please note: the current approximate cost of installing a 3.96
kWp solar electricity system is about £14,000. The
Government's reasoning for reducing the Generation Tariff from
2012 is that it expects the cost of PV systems to fall over time
due to economies of scale.
Therefore the approximate payback time is 9 years and the
benefits will flow for a further 16 years.