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Solar Power vs Eskom - My attempt to demystify.


PaulF007

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Right I attempted to be a as objective as possible and used some of the forums members opinions to formulate this. There will be with out a doubt a million different ways that one could approach this so I attempted to compile my own method. Equipment could be swapped out for something better , or one could buy a second unit as “insurance” but all in all I believe that this will give you a very good idea. Sorry for the MASSIVE long post but I attempted to be as thorough as possible.

So:

To be able to compare the two we would need to establish a base line from where we can compare the two so in order to do so I decided to "create" a base system from where one then could do the necessary calculations. There will be many different setups that one could use and this will definitely have an effect to the outcomes. The system was based on what the "average" Joe would go for to towards Solar power with a limited budget.

He would have to take out a bond and therefore the bond would need to be paid off. Also the assumption is made that the household would run from Eskom directly as if it were constrained by solar so that the base could be followed trough.

Keep in mind that the assumed figures could be manipulated to suite any ones view point so the figures was derived from personal and different opinions out of two camps (The pro batts and the non pro batts)

This setup is also geared towards the person that has a “normal” house hold and are looking towards solar as a cost saving method.

Base line:

Two Separate base system was setup one for a full off grid setup and the other for grid tied  

1)      Off Grid Setup

5000 va Voltronic inverter                                    R 12 000

12 x 260w Solar panels                                       R 30 000

Installation and Consumables                             R 10 000

16 x Trojan L16RE 225 ah                                  R 40 000

Total                                                                    R 92 000

 

2)      Grid Tie

 

5000 va Voltronic inverter                                         R 12 000

12 x 260w Solar panels                                            R 30 000

Installation and Consumables                                  R 10 000

4 x Dixon Type 100ah                                              R    7 200

Total                                                                         R  59 200

 

Batteries

Bank Size                    450 a @ 48v

DOD                             20%

Expected Cycles       4000 that will give you 131 months @ a cycle per day ( I will work on 10 Years)

Risk Assumption       30%

 

 

Rates

 

Eskom Average Tariff                           R 1.70

General Inflation                                      6%

Assumed Eskom Inflation                        8%

Bond Rate                                               11%

Bond Term                                              10 Years

 

Consumption

 

The figures below is assumed to be a fair value for a off grid system where all unnecessary loads were taken care of geyser and stove is also excluded.

 

Day time Usage          20      Kwh

Nigh time Usage         4.32   Kwh

Totaal Usage              24.32 Kwh

 

 

Calculations if you were to go full off grid.

 

First we need to calculate the “Future value” of the batteries as they would need to be replaced in 10 years time.

Future Value of Batteries

Current value of Batteries                                            R 40 000

Future value of Batteries                                              R 75 564   ( FV ,I,N,PV) was used   

This will give you an “investment” amount of               R 812.83   at a ROI of 7% per anum

Add 30% for the risk on the Batteries                          R 1068.38 ( For things like over heating , mistakes extr. )

 

Bond Repayment on the installation

Bond Amount                                                                    R 92 000

Term                                                                                 10 years

Bond repayment                                                              R 1 267.30 per month at 11% per anum

 

Cost per month for Off grid:

Battery Replacement                                                        R   1 068.38

Bond Repayment                                                              R   1 267.30

Total per Month                                                                 R   2 335.68

Cost per Year                                                                     R 28 028.13

 

Calculations if you stayed with Eskom with no capital investment

 

Total units used per day                                                   24.32 Kwh

Cost per Unit                                                                     R 1.70

Total cost per day                                                              R 41.70

Monthly cost (31 day’s)                                                      R   1 281.66

Cost per Year                                                                     R 15 379.97

 

Cost of the two over a 10 year period.

 

Solar Power                                                                        R 280 281.29

Eskom @ 8% increase per year                                         R 222 802.87

 

This seems as if Eskom will be cheaper even on the long run but keep in mind that provision was made for the replacement of the batteries and that you should have by now a capital investment of R 75 000 in the bank so that you can now replace the the batteries and that a Capital investment was paid off and you still have the Panels and Inverter to show for it.

 

So After 10 years you will have:

Solar system                                         R    42 000

Capital investment                                 R    75 000

Total                                                      R 1 17 000

 

If you stayed with Eskom alone you would have used some power and none to show   ….

 

Also keep in mind that no provision was made for the risk of the inverter braking down or any other eventualities and one might need to add possible insurance for this.

Also there might be a additional costing like running a generator in bad weather but it would get near impossible to calculate all of the variables …

 

If I had to put in Financial planner hat on I would advise that you first pay off the bond with the inclusion of the battery replacement cost and link your bond repayment to inflation. Once you have paid off the bond then start saving the full bond repayment amount to make provision for the batteries.

“Disclaimer - this does not constitute as investment advice – but if you like what you see please PM me so that we can chat-“

 

Now If you were to combine the two :

Eskom and Solar Power

You will only use the batteries as backup for the times that Eskom not available and as a result you would be able to use a much smaller bank and “cheaper” batteries as well.

This will assume that you will use Eskom at night time instead of batteries and in day time you will use Solar power.

 

Current cost of system including Batteries                                 R 59 200

Future value of batteries                                                            R 12 894

Replacement investment                                                           R      148

Bond Repayment                                                                       R       826

 

Power consumption at night time per month                                  133 Kwh

 

Eskom account                                                                                R   227

Bond                                                                                                R   826

and Replacement investment                                                          R   148

Total per month                                                                               R 1203

 

Total spend over ten years with the inclusion of the 8% rate increase at Eskom would be  R 156 618

 

If you compare this with Eskom alone Off Grid and Grid Tie over the ten years:

 

Solar Power                                                                        R 280 281

Eskom @ 8% increase per year                                        R 222 802

Grid Tie                                                                    R 156 618

 

One could derive many assumptions from this but in my personal opinion the Grid tie option out weighs all the options by a long way. The challenge would be to keep the household consumption to the “allowed” 4.35 kwh per nigh but that would be tied to human behaviour and as such can not be calculated.

This is not the be  and all and be all of the subject and I will invite any one to compare note’s but you must be prepared to bring your own calculations to the table…..

 

 

 

 

                 

                       

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I could tinker with the numbers but I think you're right with the conclusion. What you could look at: Dump the Voltronic hybrid that needs batteries and install a Fronius. The Fronius has a 5 year warranty and can be extended up to 15. It costs more that the infini but the batteries that you don't need makes up for that. I believe the numbers will be much the same, but the breakage risk is accounted for, and Fronius actually has been around that long :-)

Sent from my GT-I9195 using Tapatalk

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Thanks for the calculations. Could you cost this for the off grid scenario, Eskom line fee R1500, 1.15 per kWh. I,m pretty sure that the current Eskom costs for rural installations are about that by now. And then as in my question on the other thread, what is the breakeven Eskom cost (power only, no fixed cost) that would make eskom and off grid the same for an urban user?

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We will look into the fixed cost calculation as well but according to my calculations you are looking at about R 3.10 per kwh for brake even between Eskom and Solar.

14 hours ago, PaulF007 said:

Total per Month                                                                 R   2 335.68

R 2335 / 31 / 24.30Kwh = R3.10 per Kwh for full off grid . 

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I quickly added the line rental and obviously it will pull the numbers in favour of Solar hence why many rural guys goes for solar. There the challenge will be towards total consumption , as the line rental is a fixed cost the more you use the cheaper the amount per Kwh will be and the cost effective solar will be. There you are getting penalized for saving on power usage. But Grid tie will also then become a more viable option.

On ten years 

Eskom total      R 431 409 this also assume that the line rental will increase with the Eskom inflation figure.

Solar Power     R 280 281

 

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No contest on that one but if you are on a prepaid rate with no line rental there is a case to be made and I think this has been said many times before, your situation will determine what would be the best solution for you.

These figures might also help in assisting one in making the "correct" decision as to how to approach solar power.

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2 minutes ago, Chris Hobson said:

....and then you add me with a gennie at about R10/kWh.

Ja that's the boat that I am in as well , avoiding that little switch as far as possible. Lucky for me my water comes down hill so no need to pump water , apart from the little booster pump at the house. 

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1 hour ago, DeepBass9 said:

R3.10, that's about double the urban power cost.

That depends on where you are in SA, and what suburb, for even suburbs have different charges. I am on R2.28 per kWh, my friend, just over the hill is at R1.80 en he uses even more power with no solar than we.

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Will also add my 2 cents on Paul'c calcs. @PaulF007, will email the Excel back with my thoughts that we have one person doing the calcs.

 

Once we have this very valuable calculation in place, I will push the next critical question: How many watts? How long?

Both these questions i.e. solar costs and watts for how long, are intertwined.

Have a suspicion that there could be a very sweet spot where solar becomes a very attractive option.

 

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TTT, this debate started off with grid tie and off grid options. If you never had Eskom, that is one thing but PaulF's calcs are for evaluating the cost of both cases.

I wonder if Eskom is aware to what extent their pricing options are pushing rural folk of grid? They must have noticed of the number of disconnections they are experiencing. There have been plenty in my area. I have also read a number of case studies where people with large irrigation installations find it cheaper to be off grid.   

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I think my perfect setup would be a Fronius PV inverter with a small Victron (1.2kva or 1.6kva) to back up only the essential loads. Back in 2013, I already knew this would be the best long term option, to install the GTI first and add the backup later. This gives you a complete separation of concerns, THAT side is cost-saving (and as @PaulF007 correctly points out, actually does save costs), and THIS side is backup (which as I pointed out earlier, also pays for itself quickly in a load-shedding/productivity situation).

The only problem was I didn't have enough money to do both, and I needed the backup first. As I said in another thread: You tend to forget the constraints you worked with, you amplify the "mistakes" you made and forget that they were really well-considered compromises.

To confuse things even more, those clever Dutch boys then came up with Hub-1 and then Hub-4 and now I don't even have to buy another inverter to go grid-tied. Now I just wish I had a bigger one! :)

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32 minutes ago, DeepBass9 said:

TTT, this debate started off with grid tie and off grid options.

@DeepBass9, you are quite correct. My apologies. Fixed my post.
No, Eskom has not implemented different tariffs for different times that I am aware of.

 

So let me be clearer on what I meant:

This discussion should be wary of all solar boasting by solar hobbiests / DIY / installers who do it for the fun and joy ... there is no price attached to such an awesome hobbie but it skews the picture completely for the rest of us. (No Plonk, not you! You are a pioneer for Victron.)

None of this check my big system, I have 4kw panels, 2 x 5kva inverters and 700ah battery bank, 48v, you must do the same because I did and so must you. :P

Not all people going solar are hobbiest / DIY / installers so we need to be sensitive to this larger mainly silently reading group, so lets not confuse this discussion né!

We want to get to the actual cost of solar.

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11 minutes ago, DeepBass9 said:

you could charge batteries at off peak at a lower tarrif, like in the middle of the night

Unlikely to help much if your batteries are lead-acid because of the poor round-trip efficiency (unless the off-peak rate is thumbsuck like literally less than a third of the peak rate... then MAYBE, and then you probably want lithium batteries.

Another thing we sometimes forget: Business rates sometimes have KVAR and peak penalties. I heard this amusing story where someone cut a power bill by millions per year using a 200 dollar time-delay switch. All they had to do is space the startup of the two airconditioner units a few seconds apart.

In the same way, an inverter that can go hybrid/assist to cut off a peak might literally pay for itself through avoidance of penalties.

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1 hour ago, The Terrible Triplett said:

pioneer for Victron

Well, they just happen to make hardware that makes such tinkering easy.

Seriously though, one of the things I am trying to do -- this might turn into a business some day but if it doesn't I still get to take home all the fun I had -- is just to make it simpler and cheaper. I AM in fact looking at cost too. What I'm doing is challenging the accepted wisdom that to make large savings you 1) need a large inverter 2) need a large solar array, and 3) need lots of battery storage. Of course this is old news, but in South Africa the fact that we want SOME backup skews the picture.

Even in the rest of the world, because utilities cannot adapt fast enough and manage the problem by paying peanuts for solar (or not paying at all) means that a case for self-consumption can be made in some cases.

In other words, the question is no longer should I go solar or not. I think the answer is clear: you should! It will save you money. The question also isn't whether you need batteries or not. The answer is yes, in South Africa our grid doesn't qualify as "stable" in the sense it does in Europe, you will need some batteries.

The question is: How much battery do I need? This is where I would argue that for the city dweller, the answer is: Very little.

So this is the challenge: 1) Small inverter, 2) Solar array between around 1kwp to 1.5kwp, 3) backup essential loads, 4) reduce monthly utility bill to 600kwh (because in Cape Town that's the cheap block). This can in theory be done with a small Multiplus and two bluesolar MPPTs, along with the control element that's currently in the CCGX. So presently we're talking:

Victron Multiplus 1.6KVA: around 15.5k (920 Euro)
2 x BlueSolar MPPT 150/35: around 10k (300 Euro a piece)
1 x CCGX: around 9k (526 Euro).

That's a cool 35k for something the infini can do for 18k, with three time the power (I deliberately ignored the PV modules and sundries and stuff as that would be the same for both setups). The challenge is to get the price down, and presently I'm doing that by being involved in eliminating the CCGX. At least, that's what I think I'm doing... besides having fun.

Edit: Additionally, this approach give you an incremental path. Buy the backup first. Then add half the solar modules, then the other half. When battery prices come down, invest in a lithium battery. It's not exactly milk money, but it's not the big splash of the other systems either.

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To add to my previous post: Obviously this solution won't work for everybody. The kind of person this is perfect for is 1) runs a business from home and/or needs the backup,  and 2) Uses more than 20kwh a day. The upsides are that it can be done incrementally and the hardware is flexible (being a true hybrid). The downside is that it will cost you at least 50% more in the long run... but at least you get good quality hardware for that :-)

Also, I just have to note there are other manufacturers also playing in this space. SMA is one, and I think Fronius also has a Hybrid. What is interesting about these manufacturers is that they are all in Europe, where the greatest case for self-consumption is currently being made.

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I have a suspicion that there is a magic spot where you have the maximum savings on Eskom, limited risk and longevity of products of +-15-20 years, in comes the brand names as per Plonkster.

Ideal for me is to buy once every +-20 years, batts maybe twice and only because of backup of essential loads in case of power failures, yet use the batts every day to have some ROI at night for small loads if there are no power failures.

Even more cost effective, seeing as there are 2nd hand batts = even better savings to run ie. lights and other small little bliksim loads off grid.

If power failures return, replace the used batts with a new high end cost effective bank then.

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1 hour ago, The Terrible Triplett said:

If power failures return, replace the used batts with a new high end cost effective bank then.

I would say that is the sweet spot , save your cash for the day that you will need it , if all the "doem profete" is correct it might be sooner than later but by then the demand might be so high that the costs come down even more , if not then you have some backup money for a rainy day ...

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I wonder what the real costs are to power kettle microwave if you calculate what they cost per year on Eskom, comparing that to the cost to power them via an inverter, panels etc with Paul's calcs?

In the city, in my opinion, experiences and calculations, the moment you add microwave, kettle geyser and such on the list of watts you need to power, the inverter minimum specs climb as do the panels and batteries for backup. Off grid you have no choice.

For City user the sweet spot is a smallish grid tie inverter that is able to supplement higher loads for things like kettle geyser microwave from Eskom. If Eskom is off, tough, braai or use the camp gas stove. Idea is it feeds the house the whole day, all power generated is used on the spot after habits changed that you cook food, washing etc daytime.Geysers for me ideally should be on solar only, put it up and forget type, EV or flat plate technology, 400l+ size, Eskom as backup only.

Am convinced that the loads that are costing us the most are the ones that has to be on 24/7. Alarm, security lights, TV, laptops etc and the viper loads. All small loads, totaling maybe 300w peak and 100w or less between 12 and 6am, on 24/7.

My mission the last few years, and now again with the coined, Milk Money systems, these loads have become a high priority.

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