An Introduction to PV Systems
Return on InvestmentThe Return on Investment (ROI) is calculated by adding the savings of pushing power (measured in kilo-watt hours (KWh)) back to the grid to off-set power consumed plus any excess power generated above and beyond that consumed in any given billable period. Most power utilities now install reversible meters (meters that either spin backward, or digitally track power consumed vs power generated) and showcase on monthly bill the KWh accordingly. Any excess is paid to the home owner annually, at a rate lower than that which the home owner pays.
The calculation looks like this:
[KWh consumed from Utility] * $0.xx per KWh
- [KWh generated by PV system] * $0.xx per KWh
$x.xx savings per month
[surplus KWh] * [$ reduced rate]
$x.xx surplus per month
Now take the total cost of the system and divide it by the [savings + surplus] per month and divide again by 12 months to determine the number of years to full Return On Investment. Once the system is repaid in full, any excess power generation above and beyond that consumed is by law paid back to you once per year by the local power utility, at a reduced per KWh rate.
Select Resources to download sample spreadsheets which assist with system design.