Planning your system

The economic viability of your system not only depends upon the size of the investment costs and financing model. The average power output, as well as the costs and the service life of the system, are important for the economic operation and the quickest possible payback time.

System Costs
A rough benchmark: The costs for a complete system is made up of the modules, inverters, installation material, planning, installation and taxes. Additionally, the type of mounting and price variability must be considered! Inverters make up approx. 7 – 13 % of costs, the installation costs approx. 15 %.

The size of a PV system is measured according to the power output of the PV panel in kWp. This value describes the maximum module output under standardized test conditions. From experience, a 1 kWp PV system in Australia generates between 1000 and 2400 kWh current per year, depending upon region, orientation, weather conditions and system design. Variations in solar irradiation due to climate affecting yield are approx. ± 10 % per year.

Service Life

The service life of a high-quality system lies between approx. 25 – 30 years. The electronic components are estimated to have an average service life of 20 years, whereby manufacturers offer guaranties of between 2 and 10 years. Since the modules are not subject to much wear and tear, the service life of the system can also exceed 30 years. But in the planning stage it should be considered that the system output decreases over the time and after 20 years will potentially only be approx. 80 %. This also corresponds to the guaranty conditions of most module manufacturers.

Repayment Time

Depending upon quality, price and orientation of the system, the reference value for the payback time should be between 12 and 14 years.
For a first approximation, the payback time can be calculated with this simplified formula:

Payback time (years)
Investment costs (INR) – Subsidy: Feed-in tariff (INR per kWh) x Yearly yield  (kWh per year )

Economic viability of stand-alone solar photovoltaic system in comparison with diesel-powered system for India

The economic viability of a stand-alone PV system in comparison to the most likely conventional alternative system, i.e. a diesel-powered system, has been analysed for energy demand through sensitivity analysis. The analysis shows that PV-powered systems are the lowest cost option at a daily energy demand of up to 15 kW h, even under unfavourable economic conditions. When the economic parameters are more favourable, PV-powered systems are competitive up to 68 Kw hday. These comparisons are intended to give a first-order indication of when a stand-alone PV system should be considered for application. As the cost of PV systems decreases and diesel costs increase, the break-even points occur at higher energy demand.