Savings and payback period after Solar installation

Chris_SA said:
My monthly Elec bill ranges between 1800 - 2400. This is based on 2 adults and 2 small kids - usage will only increase over time.

Based on my calculations, if I install the system I have been quoted at 185k, it will at minimum save me 70% of my monthly bill. I tried to calculate payback period as per below. Obviously, I did not factor in that there are on average 60 Rainy days in SA (but also confident that the system will actually cover more than 70%).

The below calculations are based on 10% Eskom Tariff increases per year. I am also converting my Meter to prepaid which should save me R1000 immediately just on network and service charges.

Anything else to add on below:
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Are we not beyond the point of ROI for a solar install the quality of life cant have a price put on it add sanity to the mix etc. too
 
Tomtomtom said:
Like everything in SA it takes longer than people expect. It's now been 16 years since loadshedding started.

I would rather keep my solar & diesel fund in an offshore account a little while longer.
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How much better has it gotten?

Power (lol) to you if you can handle 12 hours a day without power while your interest grows. Most aren't old farts who spend their loadshedding time in the garden... :p
 
Tomtomtom said:
Like everything in SA it takes longer than people expect. It's now been 16 years since loadshedding started.

I would rather keep my solar & diesel fund in an offshore account a little while longer.
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I remember the days when loadshedding was a once in a while thing. I'd wheel the old power trolley out, unroll all my extension cords around the house, hook everything up, and then when it was over I'd pack everything away again until the next loadshedding event which would be weeks away. Now, my power trolley and extension cords running around the house are a permanent fixture. In fact I can't even remember when I last packed them away, because we haven't had a single day without loadshedding for months now. Can't wait until I have enough saved up to put in a proper full solar system, and I can assure you I don't give 2 craps about ROI or how much it's going to save me. It's purely a quality of life issue at this stage.
 
How would you know if it was really worthwile:
1-You have to record municipality increases over 10 years before 1992.
2-You have to record municipality increaes over last 10 years before 2018.
3-You have to record municipality increaces after 2018/2023 since installations of Green Power became an option to you.
You have to record total municipality increases not just your power, since once they factored in their losses due to Corruption, Loadshedding and People not using their main income anymore, they add willy nilly fees, taxes and Admin costs maybe disguised under under existing costs.

So after factoring these in comparison to each other etc, only then you will know if this was a worthwile excersize.
-I think you will also lean that is 100% of the better to realise a problem coming and fix it immediately in such a way it never returns by attending to the root causes....A lesson The New World has to learn for that matter.
-Theres lso a wasteage cost to old solar Equipment coming one or other way.
 
deweyzeph said:
Can't wait until I have enough saved up to put in a proper full solar system, and I can assure you I don't give 2 craps about ROI or how much it's going to save me. It's purely a quality of life issue at this stage.
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But what is "proper full"? Everyone is making compromises. I guess most of us have a 60 A main feed but is anyone saying "proper full" means a 14 kW inverter?

A remarkable thing about this situation is there's 3 orders of magnitude of spend from R 1k to R 500k that people are throwing at what is nominally the same problem.

My theory is somewhere between R 15k and R 150k the returns diminish massively while the advocacy shoots through the roof. :p
 
Tomtomtom said:
But what is "proper full"? Everyone is making compromises. I guess most of us have a 60 A main feed but is anyone saying "proper full" means a 14 kW inverter?

A remarkable thing about this situation is there's 3 orders of magnitude of spend from R 1k to R 500k that people are throwing at what is nominally the same problem.

My theory is somewhere between R 15k and R 150k the returns diminish massively while the advocacy shoots through the roof. :p
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Well, in my case, I already have enough saved up for a small solar system, but I want full independence. I don't want to have to worry about an overcast or rainy day, or being able to run the kettle, the washing machine and the dishwasher at the same time. I understand that is going to cost me significantly more than a R150k system but that's what I want and that's what I'm prepared to pay for.
 
Tomtomtom said:
Quite the opposite. Offshore funds are liquid and ready to go if and when the sh*t hits the fan vs. having your life savings in your house + solar panels.

If you really believe it's all falling apart the only rational thing to do is to minimise illiquid investment in local assets.
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That's a different goal to the thread.

Different topic sunshine.
 
Forum Reader said:
Also add another column with interest you could have earned at 10% p.a. on R185k:

View attachment 1489667

In your situation, the interest you could earn on R185k is more than you save on electricity costs per year. So the R185k lump sum cost is never recovered in column "Cumulative Solar Invest" and instead just grows.
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You are factoring in any tax and just interest earned? Not sure that's a realistic comparison.
Tomtomtom said:
Opportunity cost (or finance cost) - if it's cash, what potential return on R 185k do you forgo? (At least 1k/mo interest, but could be intangible, like a postponed holiday.)

If it's debt, what's the interest cost. Will push out the payback a couple years at least (even after also accounting for interest on accumulated savings).

Depreciation, especially batteries. To be conservative I would assume it needs to be replaced the day after its warranty expires. That can really impact your modeled breakeven.

There could be other contingent costs and benefits like insurance etc.

The major one is loadshedding immunity, which for lots of us is still worth the cost of a battery-only system with no generation ROI at all.

But then you don't necessarily have to put 180k at risk to get what you need...
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The problem just looking at the battery only system is you are still dependent on Eskom. The situation can't get better in the next 5-8 years minimum, so you are always relying on eskom to recharge your house and hope it doesn't go into prolonged periods.
Forum Reader said:
Hi payback period is infinite because his electricity bill and thus savings is quite low for an R185k cost. So no, his power is never free but in fact costs more and more due to opportunity costs, even with 10% annual Eskom escalation.

Though if he needs it, there is no other choice but to spend the money. People don't do calcs like this when they buy a car. The money is always lost.
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Why? Savings is low due to my bill today, but this will increase.
Tomtomtom said:
Ja but the point is, not necessarily that much money.

Most of us can get by with a router UPS and an inverter trolley. The cost escalates by orders of magnitude as you go from backing up SOHO stuff you need 8-10 hours/day, to dishwashers & tumble dryers you need an hour a day if at all, to going full retard taking your heating and cooling off grid.

I think a lot of people are slipping from the initial problem (loadshedding mitigation) into an entirely different game (grid independence) without really being sure they want or need to.
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My calculations are really based on future proofing our needs and making sure we are covered when the **** completely hits the fan with Eskom, and it will happen.
RedViking said:
Did your calculations consider the complete collapse of our electricity supply as well as the price of electricity is going to double, trippel or more within the next couple of years. Your 10% is not realistic and more a head in the sand approach. Currently you are already paying for a product you don't receive.

Then all other calculations makes no sense.

Why would you base your calculations on something that won't be provided and is going to increase massively in price.
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10% was conservative, pretty confident this will be higher going forward. Last 10 years for reference -

2012/13: 16%
2013/14: 8%
2014/15: 12.2%
2015/16: 9.4%
2016/17: 9.4%
2017/18: 5.23%
2018/19: 7.5%
2019/20: 9.41%
2020/21: 6.61%
2021/22: 15.63%
 
A3@MBB said:
Network and service charges are either build into prepaid unit tariff or subtracted off payment received before units bought. 70% saving in cost is doable, but optimistic I think in your use case.

As everyone hinted, it's not just about the monthly savings but to be free from worrying about loadshedding and planning your day around it.
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Yes 70% is worked into the unit tariff, which means I don't pay for this upfront each month as I do today.
 
Tomtomtom said:
Not exactly.



Opportunity cost.

Given that, expected ROI can disappear. It can also go negative. If you needed R 180k to get out of the country like Andre de Ruyter then you are stuffed if you already turned it into solar panel.
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Hopefully then my house sells quickly based on my solar installation lol :)
 
Chris_SA said:
You are factoring in any tax and just interest earned? Not sure that's a realistic comparison.

The problem just looking at the battery only system is you are still dependent on Eskom. The situation can't get better in the next 5-8 years minimum, so you are always relying on eskom to recharge your house and hope it doesn't go into prolonged periods.

Why? Savings is low due to my bill today, but this will increase.

My calculations are really based on future proofing our needs and making sure we are covered when the **** completely hits the fan with Eskom, and it will happen.

10% was conservative, pretty confident this will be higher going forward. Last 10 years for reference -

2012/13: 16%
2013/14: 8%
2014/15: 12.2%
2015/16: 9.4%
2016/17: 9.4%
2017/18: 5.23%
2018/19: 7.5%
2019/20: 9.41%
2020/21: 6.61%
2021/22: 15.63%
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Personally, I also calculate the the costs of not having power, the impact of that is far greater than anything else. Solar could probably double in price to what it is now, and it will still be worth the investment for me.
 
Chris_SA said:
You are factoring in any tax and just interest earned? Not sure that's a realistic comparison.
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Several people have said your breakeven is further out, or its non-existent, or it doesn't matter anyway because it's about quality of life.

I think if this is only a "go" for you if you get a 5-8 year breakeven then it's probably a no.


Chris_SA said:
The problem just looking at the battery only system is you are still dependent on Eskom. The situation can't get better in the next 5-8 years minimum, so you are always relying on eskom to recharge your house and hope it doesn't go into prolonged periods.
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...but it sounds like you're more in the camp who value the independence more than any financial reward.

Have you considered just starting with a battery system and adding panels later? You're only dependent on Eskom functioning some of the time. And a generator is also an option for recharge...


Chris_SA said:
Hopefully then my house sells quickly based on my solar installation lol :)
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I'm sure the estate agent will note it in the ad. :p
 
Add at least 25% inflation of household bill per year. Add 260% yearly increase on solar levy.
 
Tomtomtom said:
Quite the opposite. Offshore funds are liquid and ready to go if and when the sh*t hits the fan vs. having your life savings in your house + solar panels.

If you really believe it's all falling apart the only rational thing to do is to minimise illiquid investment in local assets.
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Good luck getting access to your investment, making payment to an installer that have the necessary equipment in stock and getting it installed when, as you say, shits hit the fan.
 
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