How going solar can ease your electricity bill

This week we are going to look at how we can significantly reduce both our electricity bill and our carbon footprint by generating our own electricity using nothing more than the power of the sun. 

Solar Electric Systems better known as Photo Voltaic or PV for short use a collection or ‘array’ of panels that are mounted either on the ground, a roof or other structure to harvest the energy from the sun. 

Converted

The sunlight is converted by the PV panels into Direct Current (DC) electricity which can be stored in batteries for later usage or converted, using a device called an ‘Inverter’, into Alternating Current (AC) which is the same type of electricity supplied by BELCO for use in our homes and businesses. 

The size of a PV installation is usually a function of the space available for panels and the estimated amount of electricity needed to offset a worthwhile portion of the annual electricity charges. 

Each panel is rated in kilowatts and they typically range from 250 – 300 kw’s each, with the more powerful panels coming at a premium cost. 

A small Residential PV system typically ranges from 3 kw’s (10 -12 panels) to 6 kw’s (20 – 24 panels) with the installed cost of a system starting as low as $4 per watt, for larger systems, which equates to $12,000 - $24,000 for a complete system. 

There is currently a government subsidy available for first time residential installations that is worth $1 per watt to a maximum of 5000 watts. 

So, in the case of a 5 kilowatt system using 250 watt panels (20 panels) the net cost after government subsidy would be $20,000 - $5,000 (subsidy) = $15,000. The system would generate up to $3,000 worth of electricity per year giving a simple return on investment of just five years. 

Without the government subsidy the return on investment would be extended to just less than seven years.

A solar PV installation is expected to perform, with a predictable rate of degradation over its lifespan, for around 25 years so compared to other more traditional investments it can provide a very attractive return over the life of the system. 

More importantly, it provides a stabilized cost for electricity, or at least a portion of the electricity, used by an average household consumer over a 25 year period. 

Compared to leaving money sitting in a savings account with little or no interest it not only becomes a very attractive investment but is also environmentally responsible.

Economics

So as you can see, the economics of the equation are attractive, particularly with the government incentive factored in to the mix. 

In Bermuda we are geographically well placed to receive ample amounts of sunlight throughout the year. As a result we would expect to see a significant volume of PV systems already installed across the Island in both residential and commercial locations. 

However, the reality is that Bermuda is lagging well behind other parts of the world with significantly less beneficial climatic conditions and we are still almost totally dependent on environmentally damaging and unsustainable fossil fuel based electricity generation.  

In 2011 the government of Bermuda produced a White Paper on Energy that among other things set a target of “30 per cent of electricity to be generated by renewable energy by 2020.”

It is fair to say that based on the volume of renewable energy installations to date we are nowhere near creating the growth that is needed to have any hope of meeting the defined target.

While we have seen some encouraging growth in the frequency of residential solar PV installations over the last eighteen months we are still faced with an almost negligible growth from the commercial sector which is ironic considering that they are responsible for the bulk of the islands electricity consumption — but that’s a whole other article! 

Until next time. 

Nick Duffy is divisional manager with Bermuda Alternate Energy (BAE). Send comments and questions to [email protected]