Where to start with solar

I have a friend who is interested in Solar but does not know where to start. I drew up this “getting started” guideline as a basic starting point. Please feel free to correct / add to this content - or add links to articles for further reading:

Guidelines for planning a new solar installation

Most important questions: Determine how important each of these are:

  1. Energy Independence - do you want to:
  • Be completely off grid
  • Handle extended grid breakdowns of a full day or more
  • Handle long load shedding, when council has an overload - 8 hours
  • Handle general load shedding 2-4 hours per day
  • What is your night time consumption? Dow you want to be able to carry your lights / fridges, TV overnight?
  • Naah - not important if I am off for 2-4 hours during loadshedding
  1. Grid direct consumption:
    a) Do you want to save on your variable power bill? How much is it? Have you done some sums?
    b) What is your peak power consumption?
    c) What is you average power consumption?

  2. What is your time horizon / budget? Are you prepared for a 10 year payback? 5 years?

Generally speaking there will be two possible solutions, each of which can scale from 50% coverage to more than 100% coverage, depending on the budget:

a) Hybrid solar system - with DC battery storage

  • More expensive, with 6-12 year payback period - depending on how fast utility prices will rise
  • Battery is very expensive - about 30 - 40% of system cost
  • Gives overnight / load shedding security by keeping you switched on

b) Grid-tied inverter with no storage

  • Much cheaper, with a shorter payback period.
  • If you consumption is mainly during daytime hours (A/C / heater / computers / lights) then this works very well to decrease your electricity bill.
  • If your consumption is night time biased, this option is not going to work for you.
  • You get no backup or overnight power protection.

The third option is to go completely off gird - but generally this is very expensive to do due to high peak consumption that we have all grown accustomed to. Only solar hobbyists with nothing better to do with their money, and survivalist nutcases go this route. Or of course if you can not get on grid at all.

Once these questions are answered, your choices will narrow down and you can investigate the options in more detail. Also, the best method to get to learn your daily consumption is measure it, preferrably with a logging system - something like a Victron Venus GX and a ET112 Energy meter.

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That pretty much sums it up…

I need to get to site early today but would like to add a part on the financial side that I have learned from 5 clients in the last few months. Will edit and add tonight.

EDIT: In short, I installed for three pensioners in the last 3 months. All the of them took money from their investments to install solar. At first I was quite “upset” when I learned about this as I am still from the old school and believe in letting investments grow… All three proved to me that they were financially better off spending the money on solar. One example. The system cost were just below R180K, the interest on that amount were about R650 per month @ PSG, the electricity saving from the system were R`1600 per month, so the “Pensioner” had R950 more a month.

The other 2 clients worth mentioning were both working for banks, their calculations showed that the saving from a solar system exceeds the interest on a loan to install the solar. Again I am old school and would not borrow money to install solar, but the calculations showed that it is indeed an economically viable option.

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Debatable… and its an debate I dont want to get into. We sometimes have only our own way of thinking as a reference point and believe that the road we took is the only way to arrive at a “Solar Solution” I deal with different and new clients on a daily basis and want to ensure you, each one has a different set of ideas as well as requirements. There are some similarities in their way of thinking, but some has no other option than to build a system that is capable of allowing them to run completely offgrid.

I have clients where the current infrastructure is so bad that they have up to 4 power failures a day and some failures lasting for up to 4 days… to them going off gridd is the only solution… In a few weeks time, I am taking a factory off grid because grid failures in their area also lasts for days at a time, leaving them in the dark and without production every time.

The need for offgrid systems grow by the day.

Every person’s situation is different. And they will have some extra factors contributing to the calculation, but these are the basics you have to cover first.

On the Off-Grid question that just did not make financial sence at all 2 years ago when I made my calculations. I think it comes back to the 20-80 principle for me. I wanted to cover 80% of my need with 20% of the cost/ease. That last 20% of the need would have cose 80% more and that was what did not make sense in my case for what I needed.

The one other thing I would add to the list is that you should also look at reducing your consuption. It’s cheaper to move schedules and routines if that is a option. Some appliances would also be cheaper to replace will more efficient versions that adding bigger inverter (or the need to add a second inverter). LED lights, heatpump solar geyser, etc.

What I tell people:

  1. First understand your loads, see what goes on when and why, what are your 24/7/365 loads.
  2. Now reduce it by whatever means, upgrade appliances as Louis said noting that LED lights are a teeny starting point unless you have like i.e. 100 x halogen downlighters always on, look into evacuated tubes/heat pumps, oven/stove on gas?

Those all cost a pretty penny to replace/upgrade.

Once done, you have a new benchmark to aim for. Is it still viable to go solar?

Yes … then 3) Decide the DB split, do the tests required, then do it, as that also costs a pretty penny.

Now decide what equipment fits the new load profile the best, with ample option to expand in due course, as you ARE going to expand.

  1. Then, with equipment decision in hand, now go and ask others, like people on this forum, their opinions.

Mostly I have talked people out of solar by step 2 … as those costs are not solar costs per se, and without knowing about them, they bite you hard AFTER you have bought solar.

Once the person has said no, too expensive, then I talk them back into getting solar, one small bite at a time, replace this, check that, see here … that by the time they commit to going solar, they have no illusions of what they are in for.

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That’s terrible. I get that from a dumb savings account. I understand that people need the money to be more secure as they grow older, so obviously putting it into stocks and bonds at 12%+ is out of the question… but that is still terrible.

Nevertheless, at the savings reported, I agree: Clearly installing solar systems made financial sense. A penny saved is a penny earned.

There’s also the point that high yielding investments typically are volatile (if this wasn’t true, everybody would invest in it and their prices would increase, decreasing their yields).

Once you’ve hedged your electricity outgo, it is a stable return. “Paying” to reduce volatility is something many are willing to do.

In general, we have a valuation method referred to as “risk neutral” in both asset as well as liability valuations. In this we discount all future cash flow with a risk-free rate of return. So you cannot take advance credit for any expected yield that is higher than the risk free rate, because that would imply the existence of arbitrage and the market will trade it away.

Anyways, this is all very theoretical but sufficiently liquid investments does exhibit this “no arbitrage” behaviour. This was been brought about even more with the existence of algorithm trading which can identify arbitrage, even minuscule, including all the trading costs involved, extremely quickly, even having to combine many instruments to find it, and trade it away. All quicker than you can probably open your browser.

As such a no arbitrage/risk neutral valuation approach is practically the best way we have to determine the value of an investment today.

To note that liquidity is also a consideration, so cash isn’t just an investment but also extremely liquid. You pay away yield for that liquidity. A solar investment is quite illiquid so you would need to compare it against investments of similar liquidity.

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How I started thanks to TTT @TheTerribleTriplet was to get a Carlo meter and a GX device and start getting data. The rest is history.

Sounds familiar, “The long walk to freedom” if I am not mistaken…

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Ironman,

Lots of opinion in your “Guide”.

There are so many ways to skin a cat but in amongst your post you probably touch on most things. I think you have to have more than just a financial incentive to proceed. You are more likely to proceed with solar if you are driven by more than just money. Either some large piss off factor to overcome like you guys on the African continent have, unreliable power supply, or some altruistic reason for going solar.

Once you have some of those issues out of the way you can then deal with things like, do you use the cheapest stuff that will do the job, take a middle ground or just open your wallet and go for the best. The cost of panels is an area where this will come into play. Do you take the Chinese PERC panels or do you go for the N type/heterojunction/ most efficient panel LG/REC/SunPower. Chasing efficiency will increase the return on investment time. Having panels that have higher loses when it gets hot or as they age will make you think about the premium panels. To some extent I think that people that don’t consider all the details fall into two categories, people that are as happy as pigs in shit or the ones that are disappointed with the outcome.

Doing your homework can avoid disappointment but I can assure you it will make it all a bit more difficult than just handing your money over and trusting fully in your solar provider.

Good luck to your friend. It sounds like you are in a good position to help him through the pitfalls and not to buildup unreasonable expectations

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“EDIT: In short, I installed for three pensioners in the last 3 months. All the of them took money from their investments to install solar. At first I was quite “upset” when I learned about this as I am still from the old school and believe in letting investments grow… All three proved to me that they were financially better off spending the money on solar. One example. The system cost were just below R180K, the interest on that amount were about R650 per month @ PSG, the electricity saving from the system were R`1600 per month, so the “Pensioner” had R950 more a month.”

Jaco my bookkeeper proved this to me on paper last month, one year after I installed a Goodwe 4.6kW in his home.

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