Don't limit your solar PV system to 4kWp
Posted by Gabriel Wondrausch on 27 February 2013 at 9:37 am
During a typical week at SunGift Solar I can visit a huge range of people. From young professional couples eager to gain an additional income from the feed-in-tariff, through middle aged families looking for security against increasing electricity costs, to Eco-warrior pensioners who want to save the planet and “stick it to the man” by generating their own (green) electricity. Given this diversity, it is perhaps a bit surprising that when I ask what size of system they would like, I always get the same reply: “Well ... 4kWp ... obviously”.
I’m sure that everyone who looks into PV for their home is fully aware of the feed-in-tariff (FIT) and how it is banded. In fact I’d be surprised if this wasn’t the main reason behind their interest. What does surprise me is that consumers and installers alike seem to think that for domestic projects 4kWp is the best limit. This is simply not always the case.
The FIT is comprised of two parts: a generation tariff (paid for what is generated, whether you use it or not) and an export tariff (paid for what is exported to the grid). It is the generation tariff that is particularly important in this case. Currently, the purchaser of a system sized between 0-4kWp receives 15.44p for every kWh/unit that is produced. For systems greater than 4kWp (and up to 10kWp) this is reduced to 13.99p. I think it is this lower tariff rate that has caused people to discount systems larger than 4kWp.
Clearly in some situations (say an additional 250W module to a 4kWp array) adding more panels may not work out financially, as the benefit gained by the extra energy produced is outweighed by the reduced tariff. There is also the G83 application to consider; any system capable of putting more than 3.68kW back onto the grid needs to be approved by the electrical network operator.
However, assuming the application is approved, and upgrade costs are relatively low, it then becomes a question of economies of scale. A lot of the costs in photovoltaic systems are not pro-rata. It does not cost 20% more for an inverter capable of managing a 5kWp system than it does for one designed for 4kWp. Scaffolding costs could be the same or only slightly more, depending upon the layout, and labour cost is not directly proportional to system size.
This is in contrast to the power generated by the PV systems, where broadly speaking a 5kWp array will provide you with a 20% higher yield than a 4kWp system. This is demonstrated using industry specific software where a recent installation we completed in Kent was simulated to produce 3131kWh annually if a 4kWp system was installed or 3963kWh if it was increased to 5kWp.
The main message is: If you can get a system that is 20% more productive for less than a 20% increase in cost it starts to become appealing. Yes, you would receive a generation tariff of 10% less for every unit, but when you are producing more of those units in total, the finances start to add up.
Carrying on with the example in Kent: His 4kWp system would generate £483 in the first year from the generation tariff (3131kWh x 15.44p) whereas on the 5kWp it would give him £554 (3963kWh x 13.99p). This is not the only financial benefit; throughout the day a larger system will constantly produce more electricity than that of its smaller counterpart; when you are exporting to the grid you will have more to sell back and when you have a high electrical demand on site more of it will be fulfilled by the PV.
The benefits of these larger systems are maximised if you are a particularly high user of electricity. In Kent the estimated payback period (excluding increased benefits from inflationary increases in payments and savings) was reduced by six months by spending more up front on the larger 5kWp system.
Ultimately the viability of a system will be dictated by a number of things that I haven’t discussed here including available roof space, shading levels and budget. But If the circumstances are right, investing in a larger system may provide you with higher financial returns and more energy as well as helping the planet that little bit more.
It is my role not to pick a system off the shelf, but to ensure that our customers are given the full facts and are able to make an informed choice on what would be the most appropriate system for their requirements. By offering a cost benefit analysis customers can see the effects of reducing or increasing size and ensure they are getting the best possible solution.
Written by Joe Perry
YouGen has answered some common questions about feed in tariffs here, including how to calculate your return on investment, how to maximise returns, and what happens if you move house, among many others.
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