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Topic: Payback on solar power systems in NZ


This comment was made about the following article. Click on the title to view the article.

Solar Power in NZ - What is the payback?

This is the most common question we are asked on the subject of solar power systems. People are naturally curious about a technology that can produce a long-term supply of electricity with no continuous financial input, environmental side effect, or lifestyle change. Yet industry, consumers, and government only seem able to rela...
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by Ecobob.co.nz 14 Nov 11, 139 replies : Last Post Sort by:
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332 posts
Re: Payback on solar power systems in NZ 
Posted 3 Jan 12 7:44 AM
Nofear

<<I still believe that steam- generated electricity/ hot water/heating may be the best solution for lifestylers. I/2 a barrowload of wood a day to heat and power 3 homes at once for an outlay of about $13k>>

How does that work?

The technology I am keeping an eye on is "solar cooling": high operating temperature evac tube solar hot water collectors (150deg C plus) to drive absorption chillers - the only "completely matched" energy production with energy usage technology - the hotter the day gets, the more the chiller works - fantastic!

Seeker


94 posts
Re: Payback on solar power systems in NZ 
Posted 10 Jan 12 7:26 PM
hi seeker,
i am on the wrong computer at the moment, but should be able to provide the link for an australian company that has been building these for a long time..... woodfired steam engine driving a generator and providing hot water and heating.

www.tinypower.com... from memory,,i think is the link for the indian version...much cheaper but i don't know about the quality..india is a big user of small generation i am told.

the solar cooling concept.. sounds very interesting.

cheers
nofear

94 posts
Re: Payback on solar power systems in NZ 
Posted 10 Jan 12 7:27 PM
hi seeker, no that isnt the link...let me get back to you..
cheers

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 10:38 AM
I installed a 5040w pk solar system just over a year ago. In the first year of operation I generated 7700kWhrs which is equivalent to $2310 of electricity. Meridian gives me the retail rate (incl gst) as a buy back.

I spent $21500 in total on the system, including 28 180w Panels, 3xEnasolar inverters, powersmart mounting kit, wiring, council consents, Lines consents and connection.

I installed the entire system myself except for the ac connection to the grid. Installation took me about 5 days once I had all the parts.

Assuming a 1% decline in power output each year and a fixed electricity price of $0.3/kwhr over the next 30 years this puts the net present value at $21500 for a 9.25% investment. In other words, it's equivalent to a 9.25% term investment for 30 years.

If you appreciate the cost of electricity (by 3% per year) then the figure goes to 12% for 30 years.

Re: Payback on solar power systems in NZ

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 10:44 AM
Re: Payback on solar power systems in NZ

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 10:46 AM
Above are some pics from when I was installing the system

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 10:47 AM
Mike have you got you PV up and running yet?


220 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 1:17 PM
Nice to see someone prepared to make the investment in solar, Chris.

As far as returns go it might depend a bit on assumptions that are made. You can only really tell at the end of the investment period. Some of the sites I've been watching are returning only about 1/2 the rate of power you have reported so there may be a fair bit of variability there.

Meridian's rate is fairly generous and really represents a subsidy. They may not always be so generous especially if partial privatization occurs. You might also expect some maintenance costs over the 30 years to be factored in.

My guess is the average return falls more in the 2-5% region, still comparable to the banks at the moment though and getting better as prices continue to drop.

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 2:46 PM
My house does see sun in summer time from about 6am to 8:30pm and the panels are mounted facing 30 degrees west of north - so pretty ideal. If you are seeing people returning only half my 7700kwhrs I would suspect that there site is not ideally suited to PV.

Meridians rate is not generous at all, but it is fair. I still pay a lines charge and administration fees. This is covered by daily line charges of 33 cents per day. Meridian is still making money (an I have no problem with this). Electricity I don't use is being sold (at the retail rate) to my neighbors. The net effect I have is zero. There are some retailers who offer buy back rates which are plain criminal - i.e those offering less than the wholesale rate.

If I spend $10K of maintenance over the lifetime of the sytem then my investment shrinks to 5%. 10K maintenance for the lifetime is way over the top though. Solar inverters are very similar to variable frequency drives (VFDs) used in industrial motor controllers. These have a MTBF of 23 years. Properly laminated PV panels will last over 30 years and many pioneering systems from the mid 80's are still operational.

220 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 3:02 PM
I doubt Meridian is making much, if anything, on those rates. They are certainly higher than my retail power rate (which is higher anyway as low user). What I am saying is at those rates there is no cut for the grid which has to be maintained and is enabling the availability of power at any time of day.

At current levels they likely don't care (probably regard it as PR, public service) but as home generation rates rise it may become more businesslike.

34 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 3:03 PM
Here's a graph showing data from the first few months of generation (downloaded from my inverters).
Re: Payback on solar power systems in NZ

15 posts
Re: Payback on solar power systems in NZ 
Posted 13 Jan 12 8:53 PM
Solar Chris, does the $21500 include the 5 days labour cost of installation? Just because you did it yourself doesn't mean that it should be excluded from the cost.
Also, Meridian's rate to you is generous. As lastmanever has hinted at, the flat cost of supplying electricity to a property is higher than the lines fee. That cost is generally recouped through retail charges, but if you're not using more than you produce then you're not paying your share of that cost.
Also, Meridian can produce electricity itself at a much cheaper rate than you're charging. Why should home PV electricity producers get the retail rate when wholesalers only get +/- 7c/MWH?

34 posts
Re: Payback on solar power systems in NZ 
Posted 14 Jan 12 9:53 AM
Hi Luteba
Yep you're right, strictly I should include the cost of my time as well, which would make the investment more like 7-8% depending on my hourly rate.

I think your misunderstanding the concept of distributed electricity generation. My net usage of the NZ grid is zero if my net usage of electricity is zero. My exported electricity doesn't even reach the first transformer in the street. The exported electricity is used directly by my neighbors, therefore reducing their dependency on grid (they only use local lines near me). The electricity I export is not subject to transmission line losses or line maintenance (other than wellington electricity line fees) because it only uses local lines on the street.

The net effect of my PV system is that the long distance import of electricity to my street is reduced during peak-time and increased by the same amount during off-peak time. This is what Meridian actually cares about and what costs them money. Overall Meridian will benefit from this setup because in frees up transmission during peak power time.

I fully pay my share of Wellington electricity line charges in my $10 per month fee that Meridian charges.


220 posts
Re: Payback on solar power systems in NZ 
Posted 14 Jan 12 10:35 AM
Chris, Your statement "My net usage of the NZ grid is zero if my net usage of electricity is zero." is not correct and could only be true if you were disconnected from the grid and on batteries. The grid (infrastructure and power generation) is effectively acting as the battery and taking in power when you have excess and giving you power at times when you can't produce any or enough and also doing the same for your neighbours when you can't generate enough for them. This contribution is not insignificant. The peak load for domestic consumption, I assume, is in the evening when you can produce only a fraction of your max or none at all in the winter.

There is the possibility of this being improved in the future, with a "smarter" grid which sells power at varying rates due to supply and encourages power use at peak solar times.

The subject of the Meridian not being prepared to offer long term contracts was raised in this article on a wind turbine recently.

http://www.hawkesbaytoday.co.nz/news/turbine-more-than-earns-its-keep/1223038/

170 posts
Re: Payback on solar power systems in NZ 
Posted 14 Jan 12 8:58 PM
After discounts power in Christchurch can be under 20c a kWhr (with 66c/day meter charge). Hence 7700kWhrs is worth under $1500 at the present, which lowers the rate of return.

Presumably solar chris you have either solar or heat pump hot water already? Either of these have a better rate of return than PV.

I do see that PV panels are down to US$1/watt in China, nearly there.

34 posts
Re: Payback on solar power systems in NZ 
Posted 16 Jan 12 1:40 PM
In Wellington the power rate 25.9c/kwhr (30c/kwhr after gst) on a lower user rate. This is the same rate as Christchurch has on the lower user rate as far as I can tell. So the 7700kwhrs are worth $2310

http://www.meridianenergy.co.nz/assets/PDF/For-home/Rate-cards/Orion-Christchurch-RES-Nov.pdf

Solar hot water is not economic for us. We simply don't use enough hot water to justify the investment. However, even if we used more hot water I still have some questions over it as an investment (compared to PV). I did consider installing solar hot water but I believe is to be far inferior to PV both in term of investment and in terms of practicability.

Solar hot water lacks the versatility of PV - the power from the sun can only be used to heat water were as PV can be used for everything.

If hot water isn't consumed it is often wasted as the water cools down on cloudy days and at night. With PV all power generated is used! Also once all your water is up to temperature additional power input from the sun is wasted.

If you go away on holiday for a month all the hot water is wasted. With PV, almost all your electricity is exported (to your neighbors - limiting their use of the expensive part of the national grid).

The performance of solar hot water in winter is poor (by all accounts) due to lower ambient temperatures. With PV, if the panels are at normal incidence to the sun you will get similar peak power output (slightly higher in winter due to cold temps) as summer time, albeit for a shorter period of time.

Solar hot water has a much shorter lifetime, I know a number of people who have had longevity issues with solar hot water.

I leave you with this quote from consumer in 2011
"So in the decade from 1982 to 1992 average residential power prices rose just 0.6 percent per year in real terms (above inflation) but increased 2.1 percent per year in the following decade. From 2003 to now, they’ve risen by almost 7 percent per year in real terms – that’s even excluding the latest GST rise."

So in the last 30 year electricity has risen on average by 3.2 %/year (above inflation). So whether you choose solar hot water or PV the investment should work out.

P.S Hot water heat pumps are a good idea and I'm currently looking at these.


12 posts
Re: Payback on solar power systems in NZ 
Posted 16 Jan 12 2:47 PM
As mentioned above this is an excellent thread and I am grateful to all the contributors. Solar Chris, is it correct that you used the Julisolar monocrystaline panels you had discussed on another thread. I am in the process of commencing a major overhaul of my homes power supply and thus have been searching for the latest/best PV panel to use. I believe you quoted an efficiency of 14% for these panels however I have come across panels developed in the past 12 months with efficiencies in excess of 20%.

I guess in the end this may just mean a difference in surface area required to generate the appropriate amount of energy however would be interested in your thoughts.

It seems to me that ultimately using solar power for both water and general electricity might be the best way to go. Perhaps it is just a question of where you start first or perhaps that is academic.

34 posts
Re: Payback on solar power systems in NZ 
Posted 16 Jan 12 3:05 PM
I agree, although I would use PV to run a hot water heat pump rather than use solar hot water for the reasons above.

I used EgingPV in the end. Their product is really good and they are a much bigger company (in the top 20 by volume). The performance of the panels exceeds there rated power due to their +ve power tolerance. If you are interested I can give you the contact information for the company. The sales person was really cooperative and the whole process went really smoothly.

332 posts
Re: Payback on solar power systems in NZ 
Posted 16 Jan 12 3:22 PM
Not sure whether this link actually came from EcoBob or somewhere else - my apologies if you have all seen it before:

http://www.siliconchip.com.au/cms/A_112704/article.html

Just bear in mind that we are talking about massive amounts of new 1.5kW PV systems (by way of an example, in Mar 2011, one of the NSW post codes had 500kW of PV installed - that is one single post code area: which is a s***load. Cautionary note though: by Sep 2011 that same post code had none - due to changes in the feed-in tariffs in Aus).



170 posts
Re: Payback on solar power systems in NZ 
Posted 16 Jan 12 8:25 PM
Just checked - I pay Genesis 17.09c/kWhr (includes 10% discount and GST). Low user rate is 18.33. (variable controlled).

However I agree that everyone should try and use less power, it's only going to increase in price.

For a family home either solar or a hot water heat pump provide a better rate of return at present than PV - the heat pump tends to be cheaper and give more certain savings without any of the issues of solar.

(Just for the record I have both - usually four people in the house. Used on average 3kWhrs a day over the last 1200 days for water heating)

JK

63 posts
Re: Payback on solar power systems in NZ 
Posted 24 Jan 12 9:27 PM
Interesting to read your cost and actual generation figures Chris. We are about to hook up our set-up which we finished constructing last week.
5160 W of BP panels which will end up costing us around 28K. Calculations were for a 10% return on investment but a couple of cost overruns may see us a bit under that. Still, nothing a year or two of electricity price rises won't correct.

63 posts
Re: Payback on solar power systems in NZ 
Posted 25 Jan 12 8:32 PM
Hopefully the photo will 'stick' this time ;)

63 posts
Re: Payback on solar power systems in NZ 
Posted 25 Jan 12 8:33 PM
Third time lucky ??
Re: Payback on solar power systems in NZ

94 posts
Re: Payback on solar power systems in NZ 
Posted 26 Jan 12 6:23 PM
Seeker, the solar cooler sounds great.


the link for steam engines I was mentioning earlier is in fact www.tinytechindia.com

the Australian version is manufactured in Strathalbyn in South Australia. www.strathsteam.com.

34 posts
Re: Payback on solar power systems in NZ 
Posted 26 Jan 12 6:46 PM
Really nice looking system. Those panels look like thin film?

It doesn't look like it, but can you adjust the tilt for summer and winter?

 

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