Advantages of Solar Electric Power (Part V) - Draft by Bill Brown at NM Global Warming

Part V

Advantages of Solar Electric Power – Part 5 (Draft) by Bill Brown at www.nmglobalwarming.org

Caveats re Capital Costs



These prices are illustrative only, indicative of global grid connect markets rather than the markets of a specific country. Prices for individual projects often vary widely according to the location and type of system required.



No solar energy rebate programs have been built into the data. Many Governments and utilities have incentives to reduce the cost of solar electricity, recognizing the broad economic benefits of stimulating a self-sustaining local solar energy market.



Financing cost for Solar Energy Systems is assumed to be 5% per annum. These costs are amortized over a 20 year life. This is a significant factor in the Index as it has a bearing on the economic payback time of a solar photovoltaic system.

Economic Payback



A customer investing in a solar PV system should understand the economic payback on the investment, even if there may be strong non-economic (e.g. environmental) factors driving the purchasing decision.



The initial investment depends on the system size. A convenient factor that takes this into account is the price per peak Watt (Wp) of the system. Hence, a 2000 Watt peak (2kWp) solar energy system costing $16000 in total (i.e. including installation) will correspond to a price of $8/Wp. In some countries, the purchaser may be able to obtain a grant or rebate towards the cost of the system, which will obviously improve the economic payback on the purchase.



Over the last 20 years the cost of Solar Energy Systems has come down seven fold. Many Governments in Europe and also Japan have recognized the wider economic benefits of being first to stimulate a local solar energy market and industry. A main reason that costs will continue their decline is not technology (although that can help), but manufacturing volume. As the market continues to increase, so costs will come down further and so will economic payback. In the meantime, we will continue to investigate presently available solar energy incentive programs. Incentives by some utilities are currently bringing the cost of solar energy down to 10-12 cents per kilowatt hour - which can imply a payback of 5 to 7 years.
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References/Source Information to be included with later drafts.

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from TouchArt.net and OneEarthBlog.blogspot.com