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Case Study 1 – 30kW Solar System cost / benefit analysis

Scenario 1
  1. You decide on a 31.4kW system (96 off SUNPOWER E20/327W panels) and it costs you approx $73,350 out of pocket fully installed (after STC & excl GST).
  2. You live in Newcastle where a 31.4kW system produces on average 119.57kWh per day. This assumes a north facing roof with no shade issues.
  3. The price you currently pay for electricity is approx 20c/kWh.
  4. You use all of the energy your system produces and you therefore don’t export anything. Export percentage = 0%
  • Yearly benefit = 119.57units (kWh) x 365 days x $0.20 x 0% export = $8728.58
  • Payback period = $73,350/$8728.58 = 8.12 years
  • Return on Investment = $8728.58/$73,350 x 100 = 12.18% per annum
Scenario 2
  1. You decide on a 31.4kW system (96 off SUNPOWER E20/327W panels) and it costs you $73,350 out of pocket fully installed (after STC & excl GST).
  2. You live in Newcastle and the system produces on average 119.57kWh per day. This assumes the system is facing north with no shading.
  3. The price you currently pay for electricity approx 20c/kWh
  4. You use 80% of the energy your system produces during the day and export the remaining 20% to the grid at approx 8c/kWh.
  • Yearly benefit = (119.57units (kWh/dy) x 365 days x $0.20 x 80% usage percentage) + (125.15 units (kWh/dy) x 365 days x $0.08 x 20% export percentage) = $7,681.15 benefit per year
  • Payback period = $73,350/$7,681.15= 9.33 years
  • Return on Investment = $7,681.15/$73,350 x 100 = 10.72% per annum
Scenario 3
  1. You decide on a 31.4kW system (96 off SUNPOWER E20/327W panels) and it costs you $73,350 out of pocket fully installed (after STC & excl GST).
  2. You live in Newcastle and the system produces on average 119.57kWh per day.
  3. Price you currently pay for electricity is approx 20c/kWh.
  4. You use 50% of the energy your system produces in-house during the day and export the rest to the grid at 8c/kWh.
  • Yearly benefit = (119.57 units (kWh) x 365 days x $0.20 x 50%) + (119.57 units (kWh) x 365 days x $0.08 x 50%)= $6,110 benefit per year
  • Payback period = $73,350/$6,110 = 11.73 years
  • Return on Investment = $6,110/$73,350 x 100 = 8.52% per annum.
Conclusion

For a 31.4kW solar system located in the Newcastle Region as indicated in the tree scenarios above, with the estimated current electricity price and feed in tariff rate, most beneficial arrangement will be to use as much of the energy produced by the solar system in-house.

The figures for payback period and return on investment have not taken into consideration the expected increase in electricity price. Based on information provided from the Australian Energy Market Operator (AEMO) in NSW, we can expect an overall increase of approx 10 percent in the price of electricity over the next 10 years to 2020.

This will have the effect of reducing the payback period and increasing the return on investment. A more accurate assessment can be provided with your feasibility study proposal.

Other states will have different electricity price and feed in tariff regimes that may be more beneficial. Refer to our Feed in Tariff guide for more information.