[Abstract]: This study presents an economic evaluation of three types of solar applications: a) grid-connected photovoltaic

system, b) grid-connected photovoltaic system combined with a solar water heating system and c) solar water

heating system only. The operational data of an 1.3m2/120-litre tank evacuated tube solar thermal collector and the data of an average1kWp grid-connected crystalline photovoltaic solar generator are taken as a basis for the

calculation. The annual amount of energy produced, the incurred cost and the resulting savings over the system

lifetime are used to determine the cost per kWh and the payback time of the system at different geographic

locations in New Zealand.. The analysis presented in this paper for a combined solar installation including a

grid-connected photovoltaic system and a solar thermal unit at a typical domestic house has shown that such a

system will present realizable benefits compared to simple grid-connected photovoltaic systems operated

separately. The calculations demonstrate the shortest payback time and the lowest cost per kWh for the pure

solar water heating system compared to the two other alternatives, the combined system and the sole GC-PV

Kamel, Fouad

English

University of Southern Queensland ePrints

Cost per kWh Produced and Payback Time of a PV-Solar-Thermal-Combined System at Different Locations in New Zealand   Fouad Kamel Abdalla Southern Institute of Technology, Private Bag 90114, 133 Tay Street, Invercargill,  NEW ZEALAND e-mail: fouad.kamel@sit.ac.nz   Abstract This study presents an economic evaluation of three types of solar applications: a) grid-connected photovoltaic system, b) grid-connected photovoltaic system combined with a solar water heating system and c) solar water heating system only. The operational data of an 1.3m2/120-litre tank evacuated tube solar thermal collector and the data of an average1kWp grid-connected crystalline photovoltaic solar generator are taken as a basis for the calculation.  The annual amount of energy produced, the incurred cost and the resulting savings over the system lifetime are used to determine the cost per kWh and the payback time of the system at different geographic locations in New Zealand.. The analysis presented in this paper for a combined solar installation including a grid-connected photovoltaic system and a solar thermal unit at a typical domestic house has shown that such a system will present realizable benefits compared to simple grid-connected photovoltaic systems operated separately. The calculations demonstrate the shortest payback time and the lowest cost per kWh for the pure solar water heating system compared to the two other alternatives, the combined system and the sole GC-PV.  1. INTRODUCTION It is most common in New Zealand for water and space to be heated electrically.  This situation is due to the fact that NZ has traditionally had an abundance of natural hydroelectricity produced, transmitted and distributed efficiently with minimal polluting effect.  However, the electric energy consumption in water heating for domestic household use is considered to account for 42 % of the electricity consumption as described by Stoecklein et al (2002).   The recently released National Energy Efficiency and Conservation Strategy - New Zealand’s Renewable Energy Target (October 2002) announces a target to provide a further 30PJ/year (around 8340GWh/year) to increase the renewable energy supply by 2012.  In 2000, renewable energy supplied 133.5PJ, 29% of consumer energy. This means that by 2012 a minimum of 163.5 PJ of consumer energy should be supplied by renewable sources. The renewable energy target is intended to give effect to the required progressive transition to renewable energy.    As grid-connected photovoltaic (GC-PV) are highly recommended for urban use representing typical distributed generation to provide support to the national grid, the risk exists that the valuable high-grade photovoltaic electricity may in turn be used for heating purposes. This work is an attempt to introduce the economics of a GC-PV combined with a suitable domestic solar water heater in order to encourage the use of both types of solar energy where applicable. The use of a separate solar heater adds, as expected, advantages to the economics of the whole system. The operational data of an evacuated tube collector (ETC) representing the solar water heating (SWH) system and an average crystalline solar grid-connected photovoltaic solar generator are taken as a basis for the calculations.  The annual amount of energy produced, the resulting savings over the system lifetime and the payback time are presented.  2. THE SOLAR SYSTEM This analysis describes the economic performance of a domestic solar system consisting of an 1 kWp grid-connected photovoltaic plant (GC-PV) attached to an 700 W ac inverter and of an evacuated tube (ETC) solar water heater (SWH) of 1.37m2 total aperture collector area attached to an 120 litre water Cost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   2   of   9 tank. The study is based on operational data resulting from field measurements on evacuated tube solar collector of that art tested at Christchurch as described by Abdalla & Wilson (2001) and the interpreted operation data of a typical 1 kWp GC-PV system. An economic analysis of such a system, operated at Christchurch, has been previously also presented in another publication by Abdalla & Wilson (2001).  The average availability of solar irradiation at different locations in New Zealand are presented in Table 1 while the total energy gains generated by the operation of that particular solar system at the same locations in kWh/year are summarized in Table 2.    Table 1: Average solar irradiation availability at different locations in New Zealand   Auckland  Wellington  Christchurch  Dunedin  Total mean solar irradiation (kWh/m2 year) 1575 1422 1357 1252   Table 2: Forecasted energy production of a 1-kWp GC-PV and a 1.37m2 ETC solar heater at different locations in New Zealand   Auckland  Wellington  Christchurch  Dunedin  Energy Yield  1kWp-Grid-connected PV  (kWh/year) 1182 1067 1019   940 Energy Yield  Evacuated Tube SWH   (kWh/year)   999   878   851   759 Total Energy Yield of a combined system (kWh/year) 2181 1945 1870 1699  Figure 1 shows the average monthly energy yield of the combined system at Christchurch.                    Figure 1.  Average monthly Energy yield of the proposed combined solar system at Christchurch, New Zealand.    Monthly average Energy Yield of Solar System at Christchurch - NZ1kWp GC-PV and 1.37 m2 solar Thermal - Total 1870 (kWh/year)050100150200250300 Energy Yield (kWh) GC-PV-ac (kWh) 141 110 90 60 39 29 33 52 76 111 131 145Solar Thermal  (kWh) 127 95 74 54 28 15 22 40 60 95 111 130Total (kWh) 268 205 164 114 67 44 55 92 136 206 242 276Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecCost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   3   of   9   The total model system initial cost interpreted according to present New Zealand market data is shown in Table 3.     Table 3: System initial cost  Item No. Units Total cost range NZ$ Mono-Crystalline 1 kWp PV modules  1    8000 Modules installation, Wiring & Cabling     1500 Inverter 700 W-ac  1    2500  Evacuated tube SWH 1.37m2/120 Litre including installation cost 1    2500 Total Initial Capital Investment   14500  The electric average energy demand of a representative domestic of a volunteer user (4-person household) at Christchurch has been implemented in the calculation in order to demonstrate the impact of the installed combined solar system on the energy consumption.  The contribution made by the GC-PV system added to that of the solar thermal system results in the total reduction in the energy demand from the utility grid.  Figure 2 shows the resulting electric energy consumption for one-family household implementing the proposed combined solar system at Christchurch.                     Figure 2. Realisable electric energy savings from the proposed solar system.  3. COST PER KWH PRODUCED In a lifecycle cost analysis the cost of the produced energy has been calculated as a result of the Net Present Value of Lifetime System Cost divided by the energy produced over the system lifetime. Figure 3 illustrates the cost per produced kWh generated from the system at four locations in New Zealand (Auckland, Christchurch, Wellington and Dunedin) for three different cases: a) the grid-connected photovoltaic system, b) the combined system and c) just the evacuated tube SWH system.       Electrical Energy Demand (kWh/year) of Average One-Family House At Christchurch 4736 kWh Before and 2866 kWh After -1000100200300400500600700800Energy Demand (kWh)Demand Before (kWh) 282 271 265 305 655 745 702 454 319 230 229 279Demand After (kWh) 14 66 101 191 588 701 647 362 183 24 -13 3Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecCost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   4   of   9    a)                  b)                  c)               Figure 3. Cost per produced kWh generated for three different cases: a) the grid-connected Photovoltaic system, b) the combined system and c) just the Evacuated tube SWH system.    Cost of kWh vs. System Lifetime of an1 kWp GC-PV with an 1.37 m2/120Litre Evacuated Tube SWH at different locations in New Zealand0.000.200.400.600.801.001.205 10 15 20 25 30System Lifetime (Years) Energy Cost (NZ$/kWh) Auckland) Christchurch Wellington DunedinCost of kWh vs. System Lifetime of an 1.37 m2/120Litre Evacuated Tube SWH at different locations in New Zealand0.000.200.400.600.801.001.205 10 15 20 25 30System Lifetime (Years) Energy Cost (NZ$/kWh) Auckland Christchurch Wellington DunedinCost of kWh vs. System Lifetime of an1 kWp GC-PV at different locations in New Zealand0.000.200.400.600.801.001.205 10 15 20 25 30System Lifetime (Years) Energy Cost (NZ$/kWh) Auckland) Christchurch Wellington DunedinCost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   5   of   9   4. PAYBACK TIME  The lifecycle analysis has been used here as described by Doane et al (1976) and lately by Merzeiewski (1998) to evaluate the payback time of the proposed system. In this technique cost and benefits for each operational year are projected and then discounted back to the year of installation to obtain the "present value".   Usually, as described by Boer (1978), the payback time is computed as the time at which first cost and annual expenses with compounded interest equal the total savings of energy cost with compounded interest.  In the following the Net Present Value of Lifetime System Cost and the Net Present Value of Lifetime System Benefit will be calculated and compared.  A lifecycle cost of zero represents a “break-even” investment, i.e. the system capital cost is exactly met by the savings or benefits generated over its lifetime.   Following assumptions have been made to calculate the Net Present Value of Lifetime System Cost and the Net Present Value of Lifetime System Benefit: • Interest rate 7% p.a. • Lifetime of the system in year 5-30 years • Marginal tax bracket 0 % (no governmental subsidies)  • Savings escalator 0.10, i.e. 10% p.a. • Operation, Maintenance + Insurance first year = 0.2% of invested capital   • Operation, Maintenance + Insurance increase = 5%/year  Figure 4 shows the results of the lifecycle cost analysis for the combined system at Christchurch. The points of intersection between the system cost and benefits represent the situation at which the total system cost equal the total benefits generated by the system operation during its entire expected lifetime ensuring so a rewarding investment. At energy prices below that level the expected benefits are lower than the system cost and consequently, on just immediate economic considerations, the system might not be justified.  At higher energy prices the economic benefits generated are higher than the incurred cost i.e. the system is paying back itself before the expected lifetime. The higher the energy prices the shorter the payback period.   The relation describing the payback time of the proposed system at different energy prices and locations in New Zealand is presented in Figure 5 for a) the 1kWp grid-connected photovoltaic system, b) the combined system GC-PV and evacuated tube SWH and c) just the evacuated tube SWH.                      Cost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   6   of   9    a)                   b)                   c)                Figure 4 System benefit and cost vs. prevailing present energy price at Christchurch.  Present Value Benefit & Cost of  an 1 kWp Grid-Connected PV combined with an 1.37m2/120 Litre Evacuated Tube Solar Water Heater at Christchurch, NZ0204060801001200 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh)System Banefit and Cost (1000 NZ$)System Lifetime 30 Years0.163 ($/kawh) BenefitCost 14860($) Present Value Benefit & Cost of  an 1 kWp Grid-Connected PV combined with an 1.37m2/120 Litre Evacuated Tube Solar Water Heater at Christchurch, NZ0204060801001200 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh)System Benefit and Cost (1000 NZ$)System Lifetime 20 YearsCost 14807 ($)0.277 ($/kWh)BenefitPresent Value Benefit & Cost of  an 1 kWp Grid-Connected PV combined with an 1.37m2/120 Litre Evacuated Tube Solar Water Heater at Christchurch, NZ0204060801001200 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh)System Benefit and Cost (1000 NZ$)System Lifetime 10 YearsCost 14704 ($)0.623($/kWh) BenefitCost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   7   of   9   a)                  b)                 c)                  Figure 5 System payback time vs. prevailing energy prices at different locations in New Zealand for a) grid-connected photovoltaic system, b) combined system GC-PV with the evacuated tube SWH and c) just the evacuated tube SWH. System Pay-Back Time vs. Present Energy Priceof  a 1 kWp GC-PV  at different locations in New Zealand   510152025300.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh) System Pay-Back Time (year) DunedinChristchurchWellingtonAucklandSystem Pay-Back Time vs. Present Energy Priceof an 1.37 m2/120Litre Evacuated Tube SWH at different locations in New Zealand   510152025300.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh) System Pay-Back Time (year) DunedinChristchurchWellingtonAucklandSystem Pay-Back Time vs. Present Energy Priceof  an 1 kWp GC-PV with an 1.37 m2/120Litre Evacuated Tube SWH at different locations in New Zealand   510152025300.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2Energy Price (NZ$/kWh) System Pay-Back Time (year)DunedinChristchurchWellingtonAucklandCost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   8   of   9  5. DISCUSSION The calculations demonstrate that the system consisting of just the solar water heater provides the shortest payback time and the lowest kWh cost compared to the two other alternatives, the combined system and the GC-PV-only system. However the combination of both the GC-PV with the SWH still gives economic advantages in terms of lower c/kWh and shorter payback time compared to the GC-PV-only system.  Solar favorable locations such as Auckland demonstrate better economics with lower cost of energy and shorter payback time.  The cost of the produced energy is calculated, as described above, from the total present cost of the system divided by the total energy expected to be produced from the system over its lifetime, e.g. the cost of energy from the system at Christchurch for an expected lifetime of 20 years is 40 c/kWh as shown in Figure 3b. The payback time, in contrast, is calculated taking into consideration the total present cost of the system as well as the total revenues created from the system during its lifetime (discounted to the present). The point at which the cost equals the benefits is considered the break-even point as illustrated in Figure 4.   By considering Figures 3 and 5 a comparison can be drawn between the system lifetime and the payback time.  As the example shows in Figure 3b the combined system at Christchurch provides an energy cost of 40 cents at a system lifetime of 20 years while the payback time for this same energy price (40 cents) is 15 years according to Figure 5b. This is obviously because the benefits generated by the system over its lifetime exceeded the incurred cost. In other words, once the generated benefits are higher than the incurred system cost the payback time will be shorter than the projected lifetime of the system. The higher the energy prices at the site of operation the higher the benefits and consequently the shorter the payback time.                The payback time for the combined system based on a current averaged price of 18c per kWh in Auckland is approximately 25 years as illustrated in Figure 5b. If the price should rise beyond this the payback time is as little as ten years in Auckland at electricity price of 50c per kWh.   6. CONCLUSIONS The analysis presented in this paper for a combined solar installation including a grid-connected photovoltaic (GC-PV) system and a solar thermal unit at a typical domestic house has shown that such a system will present realizable economic benefits in each of the four main population centers in New Zealand compared to simple GC-PV systems operated separately. The calculations demonstrated that a system consisting of just a solar water heater provides the shortest payback time and the lowest cost per kWh compared to the two other alternatives, the combined system and the GC-PV-only system. Once the generated benefits over the system lifetime are higher than the incurred system cost the payback time will be shorter than the projected lifetime of the system. The higher the energy prices at the site of operation the higher the benefits and consequently the shorter the payback time.         7. REFERENCES Abdalla F. K. and  Wilson P.J. (2001), Assessment of Domestic Evacuated Tube Direct Solar Water Heater, ISES Conference 2001, Adelaide, Australia 25 Nov. -2 Dec. 2001  Abdalla F. K. and  Wilson P.J. (2001), Analysis of a Roof-top Combined Photovoltaic / Solar Thermal Plant at Christchurch, ISES Conference 2001, Adelaide, Australia 25 Nov. -2 Dec. 2001  Cost per kWh Produced and Payback Time of a PV-Solar-Thermal Fouad Kamel Abdalla Destination Renewables – ANZSES 2003   9   of   9 BOER K.W. (1978), Payback of Solar Systems, j. Solar Energy, vol 20, Pergamon Press, pp.225-232   Doane J.W., O’Toole R.P., Chamberlain R.G., Bos P.B. and Maycock P.D. (1976), The Cost Of Energy From Utility-Owned Solar Electric Systems, JPL 5040-29 ERDA /JPL/1012-76/3 Report June (1976)   Mierzejewski T. (1998), Economic Analysis For Residential / Commercial Photovoltaic Systems Intertied With New Zealand Electricity Networks, NZ Energy Efficiency and Conservation Authority   New Zealand National Energy Efficiency and Conservation Strategy (Oct. 2001), Energy Efficiency and Conservation Authority EECA website www.eeca.govt.nz  Stocklein A., Pollard A.,Camilleri, M., Amitrano, L., Isaacs, N, Pool, F. and Clark, S., (2001) Energy Use in New Zealand Households, Report on the Year 5 Analysis for the Household Energy End-use Project (HEEP), BRANZ SR 111 Judgeford.  

Assessment of Domestic Evacuated Tube Direct Solar Water Heater,

Cost per kWh produced and payback time of a PV -solar -thermal -combined roof top collector at different locations in New Zealand

http://eprints.usq.edu.au/4000/1/Kamel_ANZSES_2003.pdf

Cost per kWh produced and payback time of a PV -solar -thermal -combined roof top collector at different locations in New Zealand

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