In the previous article, What is the average cost of solar roof in India ?, we learned that the average cost of the solar roof in India is Rs. 83 /watt to Rs. 91 / watt (without battery back up). Now let us determine the Payback period and the financial feasibility of the project.
The Payback period is the time required to cover your initial investment made in purchasing and installing the solar roof at your residence. We will determine the financial feasibility of the project through Net Present Value method, which is done by summing all the future savings after discounting them to the present value and subtracting the initial investment.
The following is the step-by-step procedure, which tells on how to determine the payback period and the feasibility of the solar roof:
The Average cost of 1 kW Solar Roof
Here we are assuming that you have installed 1 KW system at your roof top which costs you in between INR 83,000 to INR 91,000. You can get the cost for the higher wattage like 2 KW or 3 KW by simply multiplying it by average cost per watt, which is Rs. 83/watt – Rs. 91/watt
The Peak Sun Hours in a Day
You can find this data from the official website of renewable energy of your state. The average number of daily Peak Sun Hours in India are 5.5
Units generated by the system
Your 1 kW system will generate 1 kW x 5.5 Peak hours = 5.5 kW-Hr or 5.5 units in a day under ideal conditions, assuming that there will be no energy conversion losses and heating losses. Actually, there are certain losses which reduce your output power. The significant factors that reduce the efficiency of the solar panel are as follows:
Understanding the performance of your solar panel
When you purchase the good quality solar panel, the manufacturer provides you the performance warranty on it. The performance of the solar panels reduces gradually over its lifetime of 25 years.
Average rate of electricity in India
The electricity that you receive in your houses from the grid comes at a cost, which is generally expressed as the rate per unit consumed. The rate of the units consumption is divided into slabs. The average rate of electricity increases with the increase in the consumption of units. This is something against the law of economies of scales :)
Maintenance cost of the system
Your system will need maintenance, after installation, on regular basis. The maintenance process will involve the following activities:
The cost will not remain at Rs. 5/unit
By looking at the past trend, the average rate of the electricity is growing at the minimum average rate of 5% per year. It means we will be paying Rs. 16 for the same unit consumed at the end of the 25th year.
Please have a look:
The payback period of the system
The Net Present value
The complete feasibility
The features of 1 kW Indian residential solar roof are as follows:
Determine the size of wire of the solar power system
How to size the panels of your solar power system?
How to design the solar PV system by yourself ?
How to size the battery for your solar power system?
How to measure the efficiency of your solar roof?
How to know the profitability of your solar system?
What is the cost of solar roof in India ?
How much money is your solar roof top saving in different months of the year?