INVOLAR Microinverters Evaluation of ROI of a 3 kW PV system

INVOLAR Microinverters

Evaluation of ROI of a 3 kW PV system

The purpose of government support of PV is to encourage the development of renewable energy by creating an environment conducive to investment.

This could be achieved through:

Feed-in tariffs

Green bonuses

Green certificates

Net metering schemes

LEGISLATION

Country Regulation

France feed-in tariff

Spain feed-in tariff

Czech Republicfeed-in tariff or green bonus

Denmark net metering scheme

Holland net metering scheme

California feed-in tariff

Portugal feed-in tariff

Germany feed-in tariff

Italy net metering scheme

Malta feed-in tariff

ELECTRICITY PRICES BY COUNTRY

CountryPrice

($/kWh)California 0.16

France 0.15Holland 0.26

Czech Republic 0.25Portugal 0.36Denmark 0.40Germany 0.36

Italy 0.31Malta 0.16

SYSTEM INFORMATION

TOTAL COSTS OF THE SYSTEM

Central Inverter

Microinverter

Unit

Panel cost 2136 2136 USDInverter cost considering

warranty2625 1800 USD

Monitoring system 0 220 USDLabor cost 1268.9 1113.7 USDTotal cost 6029.9 5269.7 USD

Total cost plus VAT 7235.88 6323.64 USD

System cost information

Size: 3KW system USD Price + VAT

Nb of panels 12

Panel cost 178 214

Total panel costs 2136 2563

Inverter cost 1050 1260

Microinvertor 150 180Communication

Gateway 220 264

FRANCE

• All electricity generated by PV is sold to energy utilities company Energy De France (EDF)

• EDF buys electricity from producer at a higher price than it sells electricity back

• Producers make a profit selling and buying back

• Feed-in tariffs are guaranteed for 20 years

• Different selling tariffs depending on PV installation and output capacity

• FIT values are adjusted every trimester, based on the amount of systems installed in the previous 4 months

• A January 2013 decree states that a 5-10% increase in FIT will be given to those whose PV system’s components are of EU origin

LEGISLATION : Feed-In Tariff

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 8 years, while the payback time of the same system with microinverters is ≈ 5.5 years.

FINANCIAL ASPECT: Amortization and ROI

CZECH REPUBLIC

Opt every year for feed-in tariff or green bonus

a) Feed-In-Tariffs

• The producers have to sell all the electricity generated to the grid

• Value of FIT is assured for 20 years

• FIT values are fixed for systems installed that year. Ex: systems installed in 2010 will always pay the 2010 FIT.

• Already announced FITs increase annually according to inflation, 2-4%.

Feed-in tariff prices: $ 0.19 for 1-5 kW system $ 0.15 for 5-30 kW system

LEGISLATION: Feed-In Tariff or Green Bonus


Comments:-the price of electricity to grid was calculated according to a 3% increase in price every year;-Thus, an average price of 0.27 $ was considered;


b) Green Bonus System

• Producers receive a certain amount of money, called a “green bonus.” This revenue is guaranteed.

• Can sell excess electricity directly to consumers on free market at market price. Revenue not guaranteed

• Sum of expected revenues (bonus + sale of electricity) should be higher than from FIT. Higher potential revenue reflects the risk involved in price volatility and fluctuation and in selling electricity personally.

Green bonus system prices: $ 0.16 for 1-5 kW system $ 0.12 for 5-30 kW system

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 13 years, while the payback time of the same system with microinverters is ≈ 9 years.

Comments:- Based on the producer consuming all the electricity generated by the system. FIT considered as the Electricity price.


SPAIN

• Used to have an ambitious program with feed-in tariffs 12x the market price for electricity

• Led to 26 billion euro of national debt to producers

• Government tried to climb out of debt by reducing the feed-in tariff payback period, and restricting it to already installed systems

• Now trying to pass a reform to halt electricity export to the grid

LEGISLATION: Feed-In Tariff

Proposed Spanish Reform

• Completely cut feed-in tariffs that were supposed to be guaranteed for 20 years

• Implement a tax on producing electricity from PV, so PV owners would pay to export their electricity on top of paying to buy any electricity from the grid

• Require all PV systems to be grid connected in order to monitor all production and consumption. 30 million Euro fine for non-compliance

DENMARK

Producers are exempt from paying Public Service Obligations taxes, with an annual max of $2,700 per person

a) Commercial Installations

Commercial installations <50kW can sell excess electricity back to the grid, and no PSO has to be paid to buy electricity from the grid

Commercial installations larger than 50kW must consume the energy they produce on site, and they receive reductions on PSO tariffs

LEGISLATION : Net-Metering Scheme

b) Private Installations

• Private installations under 6kW can consume their own generated electricity, and can “store” excess electricity on the grid to be consumed later at no cost;

• In case the annual amount of energy consumed exceeds the amount produced, the consumer buys this from the grid at the market price of electricity

• The producers can sell the excess electricity to the grid at a price of 0.23 USD per kWh


Comments: the amortization time of the system is high because of the high costs of the installations and the low output power due to the country’s location. Furthermore, the FIT has a low value in comparison with the amount of money invested


NETHERLANDS

• All electricity produced by PV must be sold to power companies

• The price of electricity generated by PV sold to the grid is the same as that of electricity bought from the grid

• When buying electricity back from the grid, the cost is canceled out

• Taxed for electricity bought from the grid in excess of production

LEGISLATION : Net-Metering Scheme

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 11.5 years, while the payback time of the same system with microinverters is ≈ 8.5 years.


GERMANY

• Feed-in tariff is dropping rapidly. Currently at $0.19, and price to buy electricity is $0.36.

• The producer is not allowed to store electricity on the grid, but they can buy a separate, not grid-tied storage system.

• It is more profitable to consume all electricity generated in order to avoid buying more expensive electricity from the grid.


Conclusion: The payback time of a 3kW system with a central inverter when the producer decides to consume all the electricity generated is ≈ 21 years, while the payback time of the same system with microinverters is ≈ 15 years.

Comments: the amortization time is high because of the low amount of money the system owners receive as FIT. Customers prefer to self-consume all electricity


PORTUGAL

Mini and micro installations

All electricity produced is sold to the electricity utilities company. For installations under 3.68 kW, the feed-in tariff is $0.26 per kWh for the first 8 years, and $0.22 for the next 7 years.

• Feed-in tariff granted for 15 years.

For the installations between 3.68 kW and 20 kW, the price of electricity is $0.20 for 15 years.




CALIFORNIA


• Feed in tariff for installations up to 3MW. Contracts with a utilities company are for 10, 15 or 20 years. Can choose to sell all electricity generated or only excess.

• Large production plants, for example, will sell all the electricity they generate, and homeowners can sell their excess for a profit. • Sell rate: 0.09 USD kWh • Buy rate: 0.16 USD kWh

• LA has a separate scheme whereby $0.16 is paid per kWh, multiplied by 0.50-2.25 depending on time of delivery.



MALTA


The owner of a PV system cam choose to :

a) Use the output for self-consumption and store the excess on the grid to be used at a later point

b) Sell all the output power to Enemaltac) Sell the excess output power to

Enemalta

*There is a limit on how much producers can sell to the grid. The maximum a producer can receive in 6 years is 50% of the price they paid for their PV installation.



ITALY

LEGISLATION : Net Metering Scheme

• The producer consumes what he generates.

• The producer is allowed to store on the grid any electricity generated but not consumed, to be used for free at a later time.

• Producers with over 20 kW installed capacity receive a rebate on purchasing electricity from the grid.



CONCLUSIONS

CountryType of

LegislationWhat They Can

DoStore?

Price of Electricity

(USD)California FIT sell no 0.16

France FIT have to sell everything

no 0.15

Holland net metering have to sell everything

no 0.26

Czech RepublicFIT have to sell

everythingno 0.25

green bonuspersonal usage, sell

excess yes 0.25

Portugal FIT have to sell everything

no 0.36

Denmark net meteringpersonal usage, sell

excess on grid for free 0.40

Germany FITpersonal usage, sell

excess yes 0.36

Malta FIT

sell everything no 0.16

personal usage, sell excess on grid for free 0.16

Italy net metering personal usage, sell

excess on grid for free 0.31

Country Amortization (years)

central micro

California 12 8

France 8 5.5

Holland 11.5 8.5

Czech Republic 13 9

Portugal 11 7.5

Denmark 17 11

Germany 20 15

Malta 11 8

Italy 12 8

All in all, the average amortization time for a 3 kW system with central inverters is 13 years, while the amortization for the same system but with microinverters installation is 9 years.

Documents

INVOLAR Microinverters Evaluation of ROI of a 3 kW PV system