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A calculator for ROI on solar in South Africa


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Posted (edited)

Hello fellow green energy enthusiasts,

For the past 8 months I have been working on building a calculator which handles majority of the general factors that are taken into account when investing in solar for the home, and working out returns of said investment based on your use case.

The purpose for undertaking this project was merely to raise awareness to South African's about the benefits to investing in solar power, at least from a financial gain standpoint.

I have found quite a few of these international calculators, but none that accurately depicted the financial benefits (or already contained the various rates and tariffs involved) for a South African interested in solar for their home.

So I decided to build a Solar Investment Calculator for South Africans that will remain free for all to use. No ads, no logins, no commitments. The purpose of the tool is purely to help any potential green energy enthusiast make that leap over solar, even if its just for financial gain.

So the calculator generates 2 savings models (per kit, for a range of solar kits available online). 1 model for paying in cash, and another for taking out a loan (where you can define the loan rate and payback period). This shows users that there is financial gain investing in solar power even if you require financing for it.

Now to the point of this post. I'm steering clear of giving the impression that I am trying to promote the site here, but I was hoping to get an experts opinion (if there are any with a few minutes to spare, please let me know) on the work I have pushed out thus far, it's been 100s of hours and I'd like to know if I am headed in the right direction. I have also included some information about how the calculator handles some of the inputs given by users. Any feedback from any user is welcome, my intention is to make this the best it can be, to provide any South African with a fantastic service that will never cost them a cent. And of course, in the long term, pushing for a greener economy.

URL intentionally left out to avoid breaking any forum rules. (I will edit in the URL if forum admins allow me to do so).

Thanks for taking the time to read this.

Edited by Abdul Gool
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Going to take a leap here and share the websites URL.

https://www.solarcalculator.co.za 

Hopefully this doesn't get me into any trouble. For those who do check it out, and leave feedback (whether in the contact us section of the site or responses in this thread - probably better in this thread to keep transparency with everyone interested), can't wait to here back from you about how I can tailor the calculator to suit you and almost anyone else.

Thanks again for your time.

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21 hours ago, Abdul Gool said:

Any feedback from any user is welcome

i had a look at your website. I do not fully understand the method you use to calculate the ROI. Can you please explain it. In your default 3kWp example you calculate a 1500kWh annual electricity saving (i agree this is a realistic expectation). How do you get to a break even after 7 years? 

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Posted (edited)
1 hour ago, Fuenkli said:

i had a look at your website. I do not fully understand the method you use to calculate the ROI. Can you please explain it. In your default 3kWp example you calculate a 1500kWh annual electricity saving (i agree this is a realistic expectation). How do you get to a break even after 7 years? 

Thanks for the feedback. So the break even feature uses an addition of the nominal amounts for each period (this accounts for the electricity growth rate defined in the Advanced section of the form). Once the sum of the nominal amounts surpasses the initial cost. The system break even. 

The ROI works a bit differently. It is calculated using the sum of the Present Value (this accounts for both the electricity growth and the inflation rate) of the savings over the initial cost of the investment. 

The ROI gives a far clearer picture of the investment potential. It is inclusive of, not only the savings generated in today's value of money, but also the entire 20 year investment period. 

In terms of the example below the form on the home page. I understand now I should've included more info. That example was done using a R1800 bill. Monthly bill having quite a big impact on the savings potential of the investment. 

Have I cleared up the misunderstanding? I will put more information in the about us page about how these concepts work.

Thanks for raising this with me. Eager to hear more :)

EDIT: I will also surround the example images with some information about what everything actually entails. 

Edited by Abdul Gool
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8 minutes ago, Abdul Gool said:

Advanced section of the form

ahh i see the calculations are based on a system exporting the surplus energy into the grid 🙂. What is the kWh feed in tariff and the cost of the bi directional meter used in the calculation? Can this be changed in line with the specific values of the location? 

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14 minutes ago, Fuenkli said:

ahh i see the calculations are based on a system exporting the surplus energy into the grid

In most cases yes. I just realised I should've included this nugget in an explanation as well. There is also logic in place that looks at whether the inverter supports zero export functionality. If it does, and the benefit of being grid tied doesn't outway the cost. Then the user is presented with results where the excess is not exported. 

17 minutes ago, Fuenkli said:

What is the kWh feed in tariff and the cost of the bi directional meter used in the calculation? Can this be changed in line with the specific values of the location?

Yes, each municipality has its own tariffs. Currently I have only used full kits, but I intend to build the system dynamically using user inputs in the near future. Currently there are links to solar kits I use in calculations. They are all grid tied inverters. 

I plan on pushing hybrid systems soon. But putting all the required data together is quite cumbersome and time consuming. 

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Posted (edited)
24 minutes ago, phil.g00 said:

Could you please include ESKOM tariffs up to a 100kVA supplies.

Hi Phil, thank you for the response, just to clarify, are you implying, municipality tariffs for systems of up to 100kWp?

Would these be commercial or still private homes? I had a look at the commercial aspects of each municipality. The tariff breakdowns are quite complex from off season and in season tariffs, peak and off peak tariffs, as well as different subsets of tariffs based on the industry of the business. Is this what you were referring to? Or did I misunderstand?

Edited by Abdul Gool
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  • Is the monthly grid connection fee factored in?
  • Is it realistic to project an ROI for the full system over 20 years? The inverters are likely to have a shorter lifespan than the panels and may need re-capitalisation after 10 years give or take.
  • Are you factoring in reduced generation capacity over the lifespan of the panels? Approx 1% reduction in performance each year.
  • You are aware that some municipalities make you change your tariff structure to a Time-of-Use tariff?

 

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Hi Greenfield, thanks for taking the time to respond. 

I have included monthly grid connection fee. 

I have not factored in re-capatalization of the inverter after 10 years, but this is valuable feedback and I will have it in come next week. 

I did not factor in panel performance degradation into my calculations, I will look into this further, thanks mentioning this 1.

Ito, Time of Use, I intentionally left this part out as it would require far more input from the user to use this within calculations. I could look into adding this under advanced section in the near future. 

For roof pitch, I assume the user has the optimal azimuth angle. However, I do agree. This will most likely not be the case for most uses, so il add this in for next week as well. 

I've put alot of my energy in making the calculator fairly modular, meaning, extra aspects of the calculation that I did not anticipate initially could easily be added at a later stage. So I welcome this form of feedback with open arms. 

Thanks again for your time. 

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2 minutes ago, phil.g00 said:

No, I am wondering about users that direct fed fro Eskom. From memory these tariffs aren't seasonal. Many a rural user is fed directly from ESKOM.

Oh, mmm, I'm not retrieving these. When I find a source for consistent updates to these rates, I'll pop them in. 

Thanks for bringing this to my attention. 

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Hey Abdul. 

Nice calculator. Thanks for the effort👏🏾. I'm sure it will be very helpful to many. 

I've literally spent many hours putting together an excel spreadsheet to calculate the same. Was excited to see someone else has attempted it.

Hoped to verify that my numbers were correct, only to see a massive difference in PV values🤔. Went back and forth playing with my values and your calculator.

Finally found the input that was the issue and that may be of use to you, "Usage Increase". A simple 1% usage increase YoY makes a massive difference in the PV value over 20 years.

Looking forward to your next round of updates👍🏾.

Regards.

JJ

 

 

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Hi jjordaan,

Thanks for taking the time to look at my tool and for responding.

Usage increase is definitely something I should be factoring in. Will add this to the queue of todo's.

Excited to push out my next update with a bunch of new factors being handled for exceptional precision of the calculated results.

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@Abdul Gool

Have a look at this thread. It is quite old but there is some basic principals that you could use to refine your calculator. But in my experience the main factor is human behavior , if that changes the cost of solar becomes viable. Also batteries has become a little cheaper and better. But have a look : )

 

 

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@PaulF007

Thank you for your response. I am seriously so excited to chat to you guys who have been thinking, planning and discussing a tool much like what I have built.

So lets discuss:

57 minutes ago, PaulF007 said:

there is some basic principals that you could use to refine your calculator

Sure is! I plan on eventually building the grid tied (with and without battery backups) systems based on the user inputs. Right now I have just used complete solar kits to calculate the results, but your factors from the mentioned thread would definitely assist in building the dynamic systems.

1 hour ago, PaulF007 said:

the main factor is human behavior

I agree 100%. The strategy I have taken for optimal calculation precision was to separate the independent factors and work with them only. After just 2 days on this forum quite a few of these factors have been brought to my attention that I will be including in my next updates (glad i built up the courage to request feedback on the tool in this forum).

I would be happy to discuss some of my calculations and how I derive my results, as well as the list of factors I currently account for in calculations. Let me know if you'd like me to elaborate.

But watch this space, planning a nice update for the coming week on lots of these factors brought to my attention.

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Hello @Abdul Gool

I had a slightly closer look at the info in your calculator.  I assume that I am missing something so Ill ask :)

  1. In your data collection you ask for the Loan amount , term and rate. Then you introduce a solar-kit/quote into the mix. Is that for reference ? I t seems like it is added on top of the installation amount and will have an effect on the calculations. 
  2. If the design will be grid tie only  and not a hybrid system , keep in mind that the bulk of the users end up here as a result of load shed an the savings part is a "bonus" ( This is just my point of view) 
  3. Using the Rand amount of the electric bill makes it difficult in a Grid tie scenario as it will depend when the and how the bulk of the units is used. In some of the scenarios that I have used (here a Histogram of your consumption helps) I have found that using a 1kw Grid tie solution could cover up to 80% of your consumption . Here base load will play a major effect. Have a look at the image below. I have a Max load sometimes of 5kw + but the bulk of my consumption is at +- 500 w so a 1Kw system could account for quite a lot of my setup at a much lower cost.  2020-07-12_055253.thumb.jpg.c0175f60fced79cfa93432f8998cad1e.jpg
  4.  When the energy will be used also play's a major factor in grid tie. You could find that some houses is on idle for most of the day as they are at work/school and only surges when every body arrive back at night and cooking/cleaning happens. 
  5. Not sure if you did , but do you make provision for the bad weather days as well? 

 

Most of these might be addressed in your calculations or not even relevant to what you want to achieve but that my 5c worth. As the saying goes - You asked and therefore I answered.   
Well done on the hard work done so far. It is quite the beast you are taking on there - respect!!

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  • 4 weeks later...

Thank you so much to all for the feedback. Apologies for this late response.

I am currently putting some of these changes into action as well as putting some logic in place to handle certain discrepancies.

Thank you for the patience. I will notify you all here when a new update is ready.

Regards,

Abdul Gool 

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This pensioner is battling with the maths but I'm certainly interested in what you are trying to achieve.

I started by looking at a more elegant back up solution than the two Ellies 2kVA inverter sets I currently use which has led me to a consider a PV based solution (subject to HOA approval for the small townhouse complex I live in).

I live in East London with a fixed tariff of R2.34/kWh. I current use around R1000 electricity a month but this will increase come summer as I have recently installed some aircon units. I do not believe that a payback of better than 10 years is really achievable even considering that Eskom is likely to increase power cost by 15% pa for the next three years, than 8% pa there after (that's my crystal ball).

Capital expenditure is obviously important to me as I need to weigh future cost of power against a power savings I would achieve and not need to pay for from living expenses. This obviously raises the question of future investment returns and this is probably as much of a guess as what power costs will do going forward.

Currently my objective is protection against load shedding which I believe will be with us for another 3 to 5 years all going well with Eskom. God forbid, I need to start worrying about energy security.

Peter

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Great calculator but can you remove the automatically included kit in the calculation.

 

I already installed my system and have the total cost already so don't need the solar kit to be added back.

Another option would be to simply let the user input the costs for inverter, panels, batteries and installation.

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