21.1.2
the payback time. Finally, the payback time also is strongly dependent on the initial costs
of the PV system.
In practice, more factors must be taken into account than in the simple example
above. These will increase the complexity of calculating the payback time. For instance, if
we are considering a significant period of time, the changing value of money due to
inflation also has to be taken into account. For example €1,000, today, will have a
different purchasing power than in ten years’ time. Another factor that should be
considered are policies regarding renewable energy. For example, subsidies and feed-in
tariffs can affect the initial investments and savings.
Compensation schemes
There are different schemes to compensate owners of PV systems for electricity they
deliver into the grid. We will discuss two schemes, net metering and feed-in tariffs. In
households with PV systems installed, the electricity consumer also becomes an electricity
producer, who wants to sell excess electricity to the grid. Hence the consumer is turned
into a producer/consumer of electricity, or a prosumer.
Net metering
Old-fashioned analogue electricity meters can operate in both directions. If electricity is
consumed from the electricity grid, the electricity counter increases. However, when the
PV system produces more than is actually consumed in the house, electricity is delivered
to the grid. In this case, the electricity counter decreases. In the end, only the net
electricity consumption must be paid, for, the energy consumed from the grid minus the
energy delivered to the grid. Such a system is interesting for consumers, if the levelized
cost of electricity (see below) of the PV system is lower than the price paid for electricity
from the grid.
Nowadays, smart digital electricity meters are often used. These meters distinguish
between electricity consumed from the grid and electricity delivered to the grid. This
system allows not only allows the amount of electricity delivered to the grid from the PV
system to be monitored, but it also allows the grid utility to adapt its tariff system. For
example, the electricity price often contains a certain fee for using the electricity grid.
Such a fee could also be imposed on electricity delivered to the grid from the PV system.
Feed-in tariffs
With the system of feed-in tariffs, electricity generated by the PV system can be sold to the
grid utility for a fixed price. For such a system, either two analogue electricity meters (one
the payback time. Finally, the payback time also is strongly dependent on the initial costs
of the PV system.
In practice, more factors must be taken into account than in the simple example
above. These will increase the complexity of calculating the payback time. For instance, if
we are considering a significant period of time, the changing value of money due to
inflation also has to be taken into account. For example €1,000, today, will have a
different purchasing power than in ten years’ time. Another factor that should be
considered are policies regarding renewable energy. For example, subsidies and feed-in
tariffs can affect the initial investments and savings.
Compensation schemes
There are different schemes to compensate owners of PV systems for electricity they
deliver into the grid. We will discuss two schemes, net metering and feed-in tariffs. In
households with PV systems installed, the electricity consumer also becomes an electricity
producer, who wants to sell excess electricity to the grid. Hence the consumer is turned
into a producer/consumer of electricity, or a prosumer.
Net metering
Old-fashioned analogue electricity meters can operate in both directions. If electricity is
consumed from the electricity grid, the electricity counter increases. However, when the
PV system produces more than is actually consumed in the house, electricity is delivered
to the grid. In this case, the electricity counter decreases. In the end, only the net
electricity consumption must be paid, for, the energy consumed from the grid minus the
energy delivered to the grid. Such a system is interesting for consumers, if the levelized
cost of electricity (see below) of the PV system is lower than the price paid for electricity
from the grid.
Nowadays, smart digital electricity meters are often used. These meters distinguish
between electricity consumed from the grid and electricity delivered to the grid. This
system allows not only allows the amount of electricity delivered to the grid from the PV
system to be monitored, but it also allows the grid utility to adapt its tariff system. For
example, the electricity price often contains a certain fee for using the electricity grid.
Such a fee could also be imposed on electricity delivered to the grid from the PV system.
Feed-in tariffs
With the system of feed-in tariffs, electricity generated by the PV system can be sold to the
grid utility for a fixed price. For such a system, either two analogue electricity meters (one