How much money you can save by installing solar power

3 years ago 1

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Grid-tied solar systems can lead to significant electricity bill savings over the years, despite the high equipment and installation costs.

A MyBroadband reader recently installed a grid-tied solar power system at their home to get away from load-shedding, and the installer estimates they can save more than R4 million over twenty years.

However, this assumes an annual energy tariff increase of around 18%.

The installer — Masters of Work South Africa (Mowza) — provides a detailed savings breakdown with its installation proposals, and in this case, it expects that the R270,000 solar system will be paid off within six years.

By year 20, the electricity bill savings will accumulate to over R4 million. However, it should be noted that this doesn’t account for any replacements of solar panels, inverters, or batteries.

While solar panels and inverters are relatively robust in terms of reliability, the batteries will have to be replaced over 20 years. They also comprise a significant portion — around 26% — of the total installation cost.

We plotted their estimates of the potential savings in the chart below.

The system installed relies on grid power when solar electricity production dips, such as during bad weather or overnight, with battery power taking over during load-shedding and if the system produces excess energy.

While still reliant on the Eskom grid at certain times, combining solar power generation and battery storage can result in significant electricity bill savings.

Based on Mowza’s analysis, the solar system will save the owner R29,900 in the first year, increasing to R35,282 and R41,633 in the second and third years, respectively.

As electricity tariffs are subject to annual increases — Mowza assumed an average of 18% based on Eskom’s latest increase — the savings realised get higher each year.

A breakdown of the installation and associated costs is provided in the table below.

Cost breakdown

Component	Quantity	Price
JA Solar JAM72S-30-540-MR – 540W Solar Panel	18	R69,462.00
Sunsynk Battery LFP Wall Mount 5.32kWh 51.2V	2	R61,400.00
Sunsynk SUN-5K-SG01LP1-EU Inverter	2	R47,080.00
Aircraft-grade aluminium mounting structure	18	R12,096.00
DC (Solar board): DC breakers and surge protectors per string	1	R4,111.00
16mm AC cable for Eskom feed and return	25	R4,050.00
11kVA AC board	1	R4,020.00
Certificate of Compliance	1	R1,850.00
Earthing, including earth spike and integration	1	R1,780.00
Labour (four days)	–	R19,000.00
Additional components (cabling/fuses/connectors)	–	R11,488.00
Total		R236,337.00
Tax		R35,450.55
Total with tax		R271,787.55

The peak output of the system’s solar panels is 9.72kWp, with an estimated annual production of approximately 13,500kWh.

Regarding storage capacity, the two Sunsynk batteries can store up to 10.64kWh of energy. However, it is essential to note that they aren’t allowed to discharge completely.

With the depth of discharge set to 40% or 30%, the batteries can provide around 6.4kWh or 7.4kWh of storage capacity.

Regarding environmental impact, the installer also shows how much the system reduces carbon dioxide emissions.

According to Mowza’s analysis, the solar system will reduce the owner’s carbon emissions by 205,656kg over 20 years, equating to 29,379 trees being planted.

Over 20 years, the system will produce an estimated 271,314kWh. According to Mowza, this is enough to drive an electric car more than 1.5 million kilometres.

If the owner drives an electric car, Mowza estimates that this will save them 120,584 litres of fuel — around R2.7 million at the current unleaded 95 petrol price.

The full electricity bill savings breakdown is summarised in the table below. Mowzassumedon that Eskom tariff increases will average 18% yearly over the analysis period.

Solar system electricity bill savings

Year	Production (kWh)	Electricity bill (no PV)	Electricity bill (PV)	Savings	Balance
Start					-R271,788
1	13,656.70	R42,714	R12,814	R29,900	-R241,887
2	13,484.30	R50,403	R15,121	R35,282	-R206,605
3	13,403.40	R59,476	R17,843	R41,633	-R164,972
4	13,323.00	R70,181	R21,054	R49,127	-R115,845
5	13,243.00	R82,814	R24,844	R57,970	-R57,876
6	13,163.60	R97,720	R29,316	R68,404	R10,529
7	13,084.60	R115,310	R34,593	R80,717	R91,246
8	13,006.10	R136,066	R40,820	R95,246	R186,492
9	12,928.10	R160,558	R48,167	R112,390	R298,882
10	12,850.50	R189,458	R56,837	R132,621	R431,503
11	12,773.40	R223,561	R67,068	R156,492	R587,995
12	12,696.70	R263,801	R79,140	R184,661	R772,656
13	12,620.60	R311,286	R93,386	R217,900	R990,556
14	12,544.80	R367,317	R110,195	R257,122	R1,247,678
15	12,469.60	R433,434	R130,030	R303,404	R1,551,082
16	12,394.80	R511,452	R153,436	R358,017	R1,909,099
17	12,320.40	R603,514	R181,054	R422,460	R2,331,559
18	12,246.50	R712,146	R213,644	R498,502	R2,830,061
19	12,173.00	R840,333	R252,100	R588,233	R3,418,294
20	12,099.90	R991,593	R297,478	R694,115	R4,112,409