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Let's agree that a PV-installation is an electricity production factory. Electricity is a good, which you can sell on the market or use it for your own consumption.

You can finance a car for a certain time frame, as you can do that for a PV-installation. Realize, that a car is costing you money and a PV-system is saving you a lot of money….and in some cases you can sell it to a utility company.

However, you cannot sell electricity to everyone.

Sometimes, households and small businesses are financing PV-installations, as a short term investment, with the possibility of tax deduction.

In case of a short term investment, we say between [3-8] years or [36-84] months. Since we know, that a PV-system has a life span of 20 years and more, we use [20] as the number for ROI (Return on Investment, also called Payback time).

Let's assume the following:

Your entire electricity bill is $3600.- Annually (300/month).

5*3600=$18,000.- Means 5 yrs electricity spend

or $72,000.- spend in 20 years…

Realize, that electricity costs will go up, not down!

Conclusion, there might be budget of $18,000.- ?

Now, how much electricity do we need?

When we had to pay $3600.- annually, to the utility company, in many cases approximately 10% of this amount is prior to all kind of costs for the "network". So, $3240.- will be your real energy cost. A good average of electricity cost for one kWh is 13.5 cents.

Thus $3240.- divide by 0.135= 24000 kWh of consumption annually.

That's an:

We should understand that consumption in the winter and in the summer are higher and in spring and fall lower than average.

However, we take approximately 66 kWh per day. As an average, we have 4.72 sun hrs per day in GA. This give us a 14 kW requirement continuously. (14 kW*4.72hrs = 66 kWh)

To produce 14 kW continuously, times 4.72 sun hrs average per day, we have to figure out how many PV-panels may produce that. If we take PV-panels of 330 watt, we need 42 of them for a conservative number. A thumb of rule, says that if you take 42 * PV-panels* $1000.-, the price for the entire system, installation, engineering and permit, will be around $42,000,- all-in. Again this is ballpark price, because we don't know how your situation looks like. It can be worse or even more efficient. That's why a field survey is necessarily required.

Apart of this you may have the right for a tax rebate of 30%. This is a real interesting discount, which brings the final price back to $29,400.-

In this case your payback is $29,400.- divided by $3,600.-= 8.1 year

However, the profitability of your investment might be:

(20*$3600)-$29,400=$42,600.-

There are several ways to make the picture nicer or worse, but to remain in averages:

$42,600.-/20 years=$2,130.-

Yearly saving after 20 years of use, that is not a bad number.

Realize, this math is based on 100% offset of your electricity bill.

Thus for an on-grid system, where you are dependent of the utility company and their future metering plans, this is a direction.

What if, you go for a hybrid PV-system, were all your electricity remains within the property? Whereas a smart inverter decide that your overcapacity of electricity will be rerouted to the utility? You might think of different concepts, like "saving+production", when and how do I accelerate my ROI first? And after that, I can make some profit, which you might use for other purposes?

This case will be worked out next time, click here, as soon it is available….

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