states in the country. If someone doubts the solar potential in the state, I can quote the example of Germany, whose solar radiations are comparable to Alaska, is the world leader in terms of installed solar panels per capita.
The state profile
The solar radiations in Alaska
The solar radiations chart is as follows:
The energy produced by the 5 KW solar system
You can see the chart here:
If I say that my daily energy requirement is 7540 W-hr, see the blue line in the chart, and now if I look at the chart above, you will notice that there are months in which the energy production is higher than the energy required (March, April, May, June, July and August) and the months Jan, Feb, Sep, Oct, Nov and December have the lower energy production than the required energy.
You cannot alter or change the variations in the solar radiations; the solution here is to opt for grid tied system. When your system produces the excess energy, it is feed to the grid and you are credited with the units you transferred to the grid. During energy deficit months, you can take difference energy units from the grid. In this way, you can utilize and balance the solar energy production for the whole year by feeding extra units to the grid and taking those units when your energy production through solar is less.
The grid electricity rate in the state
Alaska comes in the top 3 costliest states when considering the utility rates in the country. The average utility rate is $ 0.2069 or 20.69 cents per KW-hr with the average annual escalation of 4.10% since 2005.
If I consider escalation rate of 4.10% to continue in the future, the utility rates in the next 25 years would follow the pattern shown below:
The average cost of residential solar in Alaska
Grid electricity vs Solar electricity
Actual cost vs Break-even cost
If I were supposed to grade the residential solar power system in Alaska, it will be in the following form:
You can see that the system return gets the highest grading of 4 out of 5. It is because of the fact that the IRR rate of return of the system is 5% and the risk-free rate of return in the USA is 2.28%. Thus the system is giving more than double return than the risk-free return in the state. All the above calculations are done excluding any incentive offered by the federal or the state government.
If the government offers 30% incentive on the cost of the system, the feasibility dynamics can be depicted as follows:
This has made the residential solar power system quite attractive and much cheaper than the grid electricity rate in the state.
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