Tuesday, 8 November 2011

So how much does it earn ?

Probably the most obvious question is how much can you earn from Solar power ?

In the UK the government introduced a feed in tarrif scheme (FIT) for renewable energy generation. When we signed up for the scheme we were guaranteed a payment of 43.1p for every unit (kWh) of electricity we generate. This was paid even if we used all of the electricity ourselves. In addition our electricity supplier will pay us 3p for every unit we export to the grid. As we don't have an export meter they assume that we export 50% of the electricity generated. This means that in practice we will be given 44.6p for every unit we generate. Using this it is quite simple to calculate the revenue from our system. We had the system for the last 10 days in  September and it generated 145 units which earned us  around £64. In October we generated 307 units which earned us around £137.

The unknown factor is how much of the solar power generated did we use ourselves, this would gives us a direct saving on our electricity bill and so should also be counted in any calculation. We are about to be billed for electricty for the quarter ending at the beginning of November so I have used this meter reading to see how it compares with the same period last year. It showed a drop in electricity use of around 200 units, this would equate to a saving of around £28 assuming a cost of 14p/unit. We can't be sure that all of the saving is due to the use of our own solar power but a significant amount must be. We will get a better idea once we have a couple more quarters of bills to compare.

In the mean-time its just nice to be saving something on our electricity bills and also to be generating some income at the same time.

More about the feed in tarrif scheme as the goverment announced the result of a fast track review of the scheme on October 31. It was not good news for people who were still thinking about installing solar power as the tarrifs were being cut by more than 50%. This certainly changes the equations with regard to return on investment. We are hoping our system will pay pack the capital we invested in around 8 years, possibly a bit sooner if it continues to do as well as it has been. With the new tarrif rates it will take a lot longer, probably between 12 and 15 years. I do wonder how many people will want to plan that far ahead. We had doubts about making a commitment to a system that may not pay back for 8 years.

Enough ramblings for today, I will describe how solar PV systems work in my next post.

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