## How rooftop pv saves me money energy matters electricity per kwh calculator

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The Mexican Comisión Federal de Electridad (CFE) has two retail sales rates – a base rate that allows most Mexicans to buy their electricity cheaply, and the punitive high-consumption Doméstica de Alto Consumo (DAC) rate, which is many times higher and which in some areas applies as soon as your consumption exceeds a miserly (by US standards) 250 kWh/month. In April 2013 I installed 2.25 kW of PV panels on the roof of my house in the expectation that it would lower our monthly consumption from DAC to base rate levels and cut our electricity bills in proportion. This brief post documents how well this array has performed since then. (Inset, beautiful Lake Chapala, where I live.)

First some details on the rooftop array. Here’s a picture. The panels are fixed to a flat concrete roof and aligned 20 degrees south relative to the horizontal to match our 20 degree north latitude. (I now find that the optimum angle for the latitude is actually 18 degrees, but a couple of degrees off won’t make much difference.)

The array consists of nine 250W POLI-C Sharp panels generating 30 volts DC. They come with a 25-year warranty “according to manufacturer’s specs”. The inverter is a Fronius IG 2000, 240 volts AC, which comes with a 5-year warranty also “according to manufacturer’s specs”. The total installed cost was \$US7,700, or \$3,400/kW, and was not offset by any subsidies.

And by how much have the panels cut our electricity consumption? According to the CFE data shown in the graphic below our monthly grid consumption has averaged 794kh/year, or 66 kWh/month, over the past 22 months (the periods shown cover two months centered on July, August, October, December, February and April beginning in July 2016).

And what was our consumption before the array was installed? I have no kWh records, but the 2.25kW PV array has a capacity factor of around 20% and should therefore generate about 4,000kWh/year. Adding this to the ~800kWh/year we now consume gives pre-PV consumption of ~4,800 kWh/year. So the rooftop PV array has lowered our grid electricity consumption by a factor of about six.

Mexican pesos will not be a familiar currency to most readers, so I have converted them into \$US using the average exchange rate of 13.20 pesos = \$US 1.00 over the period shown. It’s difficult to estimate exactly how much we are now paying for electricity from our CFE bills, but it’s less than 5 US cents/kWh.

Based on these results I calculate that I’ve saved about \$6,600 on electricity bills since installation of the \$7,700 rooftop array five years ago. So in about a year’s time the array will have paid for itself on a cash basis, giving a six-year cash payback. And according to manufacturer’s specs, and provided a) Mexico doesn’t change the rules and b) I live that long, it will keep my electricity bills low for another 20 years or so.

A final question is whether the PV array’s performance has decreased over the five years since it was installed. I don’t keep records of output, but the fact that bills have remained about the same suggests that it’s still pumping out about as much as it was to begin with even though I don’t clean the panels anything like as frequently as I should.

An unsubsidized 2.25kW rooftop array would of course make no economic sense in gloomy northern climes, but I thought that readers should know that there is at least one place in the world where, thanks to the way residential electricity rates are structured, it does.

Your system is a LOT bigger than the one I had installed back in 2006. Our system, 6.12 kW DC, 5.2 kW AC, consists of three strings of 12 170 watt Mitsubishi panels with one 5.2 kW PV Powered inverter. It’s goldilocks days for our system- cool/mild days with lots of blue sky. We even had a lightning show and a downpour late at night on the 1st. The pollen, from lots of oak and pine trees, got washed off the panels. We generated 72 kWh with our system over the last two days.

I hope you have more success than I did 10 years ago getting an answer to why my PV Powered inverter starting running backwards- the total kwh produced digital readout that is. It my case it was more of an annoyance than a monetary issue. I had installed an independent mechanical total kWh meter just before my PG&E billing meter in 2008. We had previously had issues with how the inverters’ algorithms calculated tons of co2 saved and kwh generated. Those calculations were corrected by a field technician after a few discussions with customer service. Hence I was able to confirm that our actual production had not changed just the digital read out on the inverter had reversed it’s counting- rather odd behavior I thought.

My inverter was replaced, at no cost to me, and it only took about 2 weeks for the installers of my system to replace the inverter with a newer model- that no longer reported tons of co2 saved by the way. I assume the costs to R&R your system was picked up by the installer or manufacture of your hardware. Hopefully your installer, or the inverter manufacturer, reimbursed you for the kWh you had to purchase from your utility when the inverters went out too.

Because of my solar array and Mexico’s bimodal rate structure I now get grid electricity at a subsidized rate, and prompted by various upthread comments I’ve been wondering exactly how much money I actually receive in the form of subsidies. There are different ways of looking at this:

First, my solar system has lowered CFE’s revenues by about \$1,400/year – money lost to the government. On the other hand, I injected \$7,700 of US money into Mexico’s economy that otherwise would not have been there, and this is enough to cover CFE’s losses for 5.5 years. So far, therefore, it’s been a wash.

Second, CFE has also not had to generate the ~4,000kWh/year that my solar system provides for free. How much will this have saved CFE in generation costs? Assuming that our grid electricity comes from the 1.8GW oil-fired plant down the road in Manzanillo I’m guessing generation costs somewhere in the 15c/kWh range (retail rates in Hawaii, which is dominantly oil-fired, are around 35c/kWh). So in terms of total generation costs I will have saved CFE about 4,000*0.15 = \$600/year.

Third, \$600/year is of course a guesstimate. But with 0.0016 barrels of oil needed to generate 1kWh CFE will not have had to burn 6.4 barrels of oil/year to provide me with 4,000kWh/year of grid power. At current oil prices this works out to savings of about \$400/year, so maybe my \$600/year generation cost isn’t too far off.

The bottom line? I ran a discounted cash flow analysis assuming that my initial \$7,700 investment is offset by CFE losses of \$900/year. At a discount rate of 7.5% (Mexico’s present average interest rate) breakeven was reached in 11 years. I conclude from this that I’m not really receiving much money at all in the way of subsidies.