Producing electricity with photovoltaics (PV) emits no pollution, produces no greenhouse gases, and uses no finite fossilfuel resources. The environmental benefits of PV are great. But just as we say that it takes money to make money, it also takes energy to save energy. The term "energy payback" captures this idea. How long does a PV system have to operate to recover the energy—and associated generation of pollution and CO2—that went into making the system, in the first place?

With energy paybacks of 8 to 9 years and assumed life expectancies of 30 years, 87% to 97% of the energy that PV systems generate won't be plagued by pollution, greenhouse gases, and depletion of resources.

A final consideration in any long-term payback analysis is an assumption (or more likely a guess) as to what energy cost will be in the future since PV systems will continue to provide power for 25 to 30 years at minimum once they are installed. As many of us have found out in recent years, predicting future prices for gas and electricity is not a simple matter. Everyone knows prices will continue to creap up as we enter the era of post-peak oil, but how much will they go up is a hard call.

• Step1: Find out your average monthly electric bill. For most of us this is a fairly easy process. Look at your electric and find out what your average monthly electric bill is and your total annual bill.

• Step2: Determine how many kilowatt hours you use per month. Electric usage is measured in kilowatt hours. Most monthly electric bills will show you both the number of kilowatt hours you used that month plus your average monthly usage for the year. If you keep copies of your bills you can add them up for the last year and take the average.

• Step3: Contact us to design a proposed system to match your requirements. If you have not yet received a bid it is still pretty easy to estimate. For the purpose of this analysis we will assume that you are planning on putting in a 3 kilowatt (3000 watts) PV system into a home. To determine the monthly output of the proposed system in kilowatt hours you must first multiply the 3 kilowatts time the numbers of hours of sun per day you receive in your location. If you don't know what that is for you area you can look it up on the NASA website. According to the solar map we receive on average 5.5 hours of sun per day in Johannesburg, if we assume that the panels are mounted at latitude on a fixed mount on a roof. If you multiply the 3 kilowatts per hour output
from the panels times the 5.5 hours of sunlight per day you get a daily output of 16.5 kilowatt hours
per day. Now multiply this by 30 days per month on average and you get 495 kilowatt hours per month.
(3kW x5.5 sun hours x 30days = 495 kw hours per month)

• Step4: Adjust estimate for real solar conditions – Solar panels are rated under ideal conditions in a laboratory setting. In reality there will be occasional cloudy days, rain and other conditions that keep performance from being optimal. Therefore we should adjust the earlier estimate of kilowatt hours to account for this. For most locations in the RSA an adjustment down of 20% should be sufficient. So multiply the 495 kw hours per month times .8 and we get 396 kilowatt hours per month.

• Step5: Divide adjusted output hours by the actual average monthly use. To determine what percentage of your electric bill the PV system will cover just divide the adjusted output hours (396 kw hours) by your average monthly kilowatt hours of use (for example 2100 kw hours) from your electric bill. This means that the proposed 3 kilowatt system would cover 19% of the electric needs of the household.

• Step6: Multiply your average electric bill by the percentage. Since we now know that the proposed system will address 19% of our electric needs we can multiply that times our monthly bill to find out the savings. If we were paying R1.10 per kilowatt hour our monthly bill would bill would be about R2 310 per month excluding any special charges. If we multiply this by 19% we can see that the system will save us R439 per month or R5 267.00 per year.

Based on a 3kW solar design choice with an anual energy yield of approximate 5752kW/h or 479kW/h per month. For an average power consumer of 2100kW/h per month.

The next area to consider is interest rates and repayment times if the system has to be financed. Normally one uses 10% to 13% in South Africa for capital borrowing cost. Someone might borrow from their bond at 10% or from a specialist financial institution using a more expensive finance rate of 13%.

Considering that the equipment will last for at least 20 years with only the inverter needing replacement in 12 to 15 years.
For costing exercise purposes, we are borrowing money over 20 years with a fixed 10% interest rate; therefore a complete 3kw solar grid-tie system at R30 per watt installed on a tiled roof will cost approximately R90, 000. Borrowing R90, 000 at 10% over 20 years will require R869 per month repayment cost.

From calculations we determine that a 3kW system in Johannesburg could generate an energy yield of 479 kWh/per month, thus the accumulated electricity cost increase over 20 years will be almost 96% from the initial value (Based on an initial electricity cost of R1-10/kwh and allowing only for a 25% increase for one year and 5% there afterwards per year).
After 20 years of financing the solar system the accumulated interest portion to pay off the loan will be R118, 445.00. Therefore your electricity bill with a solar system installed (increased annually) will be R1, 054 584.79. If a grid-tie solar system was not installed your standard electricity bill @ 2100kWh/month (Increased annually) will be R1, 085,896.49. By going the green energy route, a savings of R31, 311.70 (over 20years) or 3% will be gained, however you also gain an asset and a clean saving of 23% thereafter.

Certain Industrial areas are already being charged at R1-80 kW/h; therefore the end savings starts to jump in larger incremental values, therefore tipping the scale of investing into green energy even more. The other conservative factor was that we only allowed for one more 25% increase from our utility supplier. This could most probably occur a lot more frequently pushing the savings up even more and thus assisting the tipping of the scale even further.

The crux in real savings comes in, when a business adds an additional bi-directional inverter with the grid-tie system. This will allow your company to operate with clean energy if no power is available at all. The best of all is that no diesel generator noise pollution exists and no further fuel costs are applicable due to using green energy.

The question should be, "What does it cost your company in profit and turnover losses if your company grinds to a halt without power" Do your calculation of what it will cost your company to be without power for a day. Your payback costs could be re-cooperated within, one day!

The above exercise is only based on a 479/2100kW/h or 23% Saving Solar Kit choice – Imagine the saving on a bigger solar system.