Thursday, October 06, 2016

Invest in a solar panel


My friend invested $32,000 to install the solar panel on the roof of his house.
It produced 5510 kwH in 112 days from 15 June to 4 Oct.
He used 58% of the production (save 0.16 p kwH) and exported 42% (earn 0.14 p kwH) to the grid.
The weighted average is 0.158 p kwH.
His solar panel will produce 5510*365/112 = 18,000 kwH in a year and earn $2,855 a year.
The return on his investment is $2855/32000 = 8.9% per year.
However, the efficiency of the solar panel will deteriorate by 10% a year.
What is his real return if the cost of energy remain the same? If it increase by 3% a year?

3 comments:

rick chan said...

Should deduct some depreciation cost as he would not get back his "principal amount" at the end of life cycle. If life cycle is 10 years, he would lose money instead

rick chan said...

If life cycle is 10 years, he would lose money as I doubt he will get back his full "principal amount"

Kin Lian Tan said...

The solar panel will last for much longer than 10 years. Maybe for 30 years or longer.

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