Showing posts with label financial performance. Show all posts
Showing posts with label financial performance. Show all posts

Tuesday, 29 August 2017

Your Return On Investment (ROI) For Solar Can Be Up To 5.8%

With our current sale on equipment, a roof-mounted solar array composed of 16 modules (4.24 kW DC) will cost you $7999 (all-in). If the installation comes to $4000, your full installed cost is $11,999.

This can return 5.8% for you and in 25 years it would generate $45,000 worth of electricity.

Here's how this works. This array will produce around 5000 kWh/year using Kamloops as a baseline on a house with a 20 degree pitched roof facing due South.

The average house in BC consumes 11,000 kWh/year. Since BC Hydro charges a 50% premium on electricity (so-called Step 2 pricing), most of the 5000 kWh/year produced by the solar array will go toward reducing Step 2. Currently, Step 2 electricity with the 5% rate rider and GST works out to 14.19 cents/kWh.

Over the past 7 years, BC Hydro rates have increased by 50%. We don't have a crysal ball to know what rates will look like in the future, but they won't go down! Using this as an annual average rate increase, we get the following table.


This table shows in the right-hand column the annual expected saving in a cumulative way. By year 12 the array has paid for itself. Most solar arrays will last 30+ years. We did include a degradation calculation (see decreased output per year) in this model since solar modules will lose on average about 0.1% of output over time.

The following graph shows the break even point.



Of course, financials are only part of the picture. A lot of our clients also want to "do the right thing" and to show how individuals can make a difference.