Small solar electric or photovoltaic (PV) systems are currently gaining popularity in the public domain in several Caribbean islands including Barbados and Jamaica as a result of spiraling electricity cost in the region. The cost of these systems, however, presents a huge drawback to consumers, thus forcing them to think twice before investing.
When considering the economics of investing in small solar electric systems it is necessary to look at both the capital cost and the long-term operating cost. The capital cost, which includes the cost of designing and installing a PV system, can be very overwhelming for the average consumer that is already fed up with high electricity bills. The operating cost on the other hand, which includes the cost of maintaining the PV system over its useful life, is generally small when compared to the ever-spiraling monthly electricity bills.
Some factors that will affect both capital and operating costs of your PV system include:
- system components
- system size
- whether it is grid-connected or stand-alone
- available solar resource
Before selecting the PV system components and sizing a PV system for your home, you should evaluate your energy consumption patterns. Looking for possible means of reducing your electricity consumption at this point would also be in your best interest. You can start by performing a load analysis, which includes:
- looking at your utility bills over the past year
- calculating energy consumption
- recognizing consumption trends.
By understanding your “energy habits” and becoming more energy efficient, you can reduce the size of the PV system you’ll need, lowering both your capital and operating costs.
If you’re looking to build a new home, you should work with the builder and a solar professional to incorporate your PV system into your new home.
For PV cost considerations ask your PV provider how much electricity your new PV system will produce per year (measured in kilowatt-hours) and compare that number to your annual electricity usage (as determined from looking over your energy consumption for the past year) to get an idea of how much you will save. As a rule, the cost per kilowatt-hour goes down as the size of the PV system increases.
Solar rebate programs, subsidies, and other incentives will help make PV more affordable. Check on your the respective government ministry (website) to see what incentives are currently being offered in your country.
The Jamaican Government currently offers the following incentives:
- GCT and import duties exemption on Solar systems – including panels, batteries, and inverters.
- The National Housing Trust (NHT) offers a low-interest “solar panel loans” of up to J$1.5 million for individual applicants and J$3 million for co-applicants, with interest rate ranging from 1 per cent to 7 per cent, depending on your weekly income, with a repayment period of 15 years.
- The NHT also offers a solar water heater loan of up to J$250,000 at 3 per cent for 5 years.
- On the commercial side, the National Export-Import Bank of Jamaica has implemented a special credit line for manufacturers and agro-processors to establish alternative- energy systems at relatively low-interest rates.
Solar or PV system provides clean energy at a comparative cost, and considering recent changes in global climate and the current upward trend in oil prices consumer should now look to becoming more energy conscious, and in my personal opinion is a move in the right direction.
3 thoughts on “Economics of a Small Solar Electric System”
Reblogged this on Cleantech Solutions.
Thanks for reblogging this post Salman, most appreciated!
The pleasure is mine. Your post was well-received by my blog readers. Feel free to write anytime at email@example.com.