Have you been wondering if installing a residential or commercial solar system is economically feasible? The following are among the most important factors to consider in order to make a mindful decision before investing in a solar PV system.
1. Solar Radiation
It is the amount of sunlight falling on a solar panel. The more sunlight the solar panels receive, the more electricity they produce. Therefore, if your location lacks sufficient sunlight, then a solar system may not be the greatest investment for you.
2. Demand & Size
Solar energy is not always produced at the time energy is needed the most. You must take your time to think if you will benefit from all the energy produced by the solar system whether by directly utilizing it, or by selling the extra electricity produced to the electric grid. If excess electricity cannot be sold to the grid, you need to know what percentage of the generated solar electricity will be used. Or, you may re-evaluate the size of your PV plant. Always remember, a 100% utilization of the generated energy will lead to a faster payback.
3. PV Plant Performance Ratio
It is the ratio of the actual energy output of the solar system to its theoretical expected energy output under standard conditions. It measures the efficiency or quality of a solar PV plant. The performance ratio is influenced by various factors such as temperature, humidity, wind speed, dust, and losses in wires. For example, a warmer or dustier environment will lead to reduced output.
4. Panels’ Degradation
Panels’ degradation is a factor that many forget to consider. Solar panels will produce less energy with time. The degradation is higher in the first year when the panels are first exposed to sunlight, compared to subsequent years.
5. System Lifetime and Availability
The longer the PV plant lasts, the more electricity it will generate. The availability factor of a PV system is also worth mentioning. It refers to the percentage of time a PV plant can supply energy. If the system goes down very often, this will result in valuable losses. A reliable and well-maintained system will most probably lead to higher availability.
6. Energy Tariff
This is the cost of electricity per kilowatt-hour (kWh), which is the unit used to measure electricity consumption. A higher tariff means greater savings and shorter payback. It is essential here to factor in the expected increases in energy price over the years.
7. Cost
The cost of a solar system is more than what you see on a price list. The cost comprises the cost of the PV plant, the yearly cost of maintenance, and the yearly cost of insurance if you are going to ensure the system. If you’re planning to take a loan for the installation, you should consider the loan size, loan period, and the borrowing interest rate.
Installing a solar system is a great decision that can bring numerous benefits. However, taking the time to make a well-informed and thoughtful decision is crucial to ensure that you are getting the most out of your investment.
