Payback for Solar Panels

A 6m2 flat plate facing due south at 30° + 300 litre solar panel installation will produce about 2000 kWh of energy in a year, replacing an uninsulated cylinder with a high efficiency correctly installed cylinder will save another 2000 kWh Giving total savings of 4000 kWh This is the equivalent of about 500 litres of oil if a system efficiency of 75% is assumed. (normally heating water from a boiler is only about 55% efficient).

Normally a vacuum tube panel with a 300 litre cylinder is sized to produce about 2000 kWh, depending on the roof orientation and type of panel (Sydney or single walled), a smaller panel is generally selected. More information can be found here; Detailed graphs and solar panel output comparisons.

The payback can also be thought of in terms of the amortised cost of this oil over a number of years assuming a particular energy inflation rate. Energy inflation and future energy prices are very difficult to estimate, so an easier way for customers to grasp savings, is that they are effectively buying 500 litres of oil per year during the life time of the panel for the upfront cost. So regardless of future energy prices, the following benefits exist;

• More hot water is available
• Better energy rating for the dwelling / Better house value
• Lower co2 emissions
• Fuel cost savings, up to 25%

National Strategy

It is estimated that water heating equates to about 1/3 of the total heating energy a house requires. A solar system typically supplies between 50% and 70% of the water heating energy, giving overall heat savings of up to 25%.

It is generally agreed by experts that huge energy inefficiencies exist within the national housing stock making it a very attractive target to reduce national energy use.

In 2006 residential thermal energy accounted for 17.5% of total energy use. It is estimated that water heating made up 1/3 of this. In other words, 5.8% of the total national energy requirement is used to heat residential water.

Carbon Taxes

It is only a matter of time before carbon levies are introduced. The following table gives tax rates based on different levels of a carbon levy on common fuel types.

Energy and Oil

As can be seen from the table above Heating oil contains about 10.6 kWh per litre and produces 3.02 kg of CO2 when burned.

A lot of people are surprised to find that a litre of oil weighing about 900g is transformed into over 3kg of CO2, this is because as oil is burned the chemical reaction takes Oxygen from the air (a heavy molecule) and combines with the carbon (a light molecule) so the net result is the high weight of CO2.