I have been wanting to setup solar panels for several years now. It all started way back in August 2015 when for the first time the electricity bill touched Rs. 2,000. We don't even have air conditioner so what gives? At this point I started looking at the past bills and noticed the slow rise in unit rates. If you are interested, I already wrote a post on the inflation of electricity bill. That got me thinking if it is time for some solar panels.
The start of the journey
So in 2015 I started my research into solar power. I made estimates of how much it would cost to buy panels and how long it will take to recover the cost by saving on electricity bills. According to my calculations in 2015, it did not seem like a good investment since the price of solar panels is far too high.
In 2016, I called up a couple of companies that install solar panels. The best quote they gave me was Rs. 48,000 for installation of 500 W panels. I made some mental calculations and was still not satisfied with the return on investment. This was also the time I was aggressively pursuing early retirement. So I did not want any distractions.
Then in 2017, as the retirement date was nearing, I wanted to see if I should go solar before I retire. I again made some calculations. If I setup 1 KW solar panels, I could be saving about Rs. 9000 per year. And the cost of setting up 1 KW solar panels is almost Rs. 90,000. So it would take at least 10 years to just break-even. The assumption was that the electricity bill inflation will cancel out any returns I could get out of my initial investment into solar panels. I was still not happy with this return on investment.
After retiring in 2018, I took the solar panel project quite seriously. I made an exhaustive list of costs, savings, return on investment (in years) etc. The goal was that if I could come up with a configuration that will give back my return on investment in 5 years, I will go for it. I hashed out different plans. How much it would cost if I start small (say 250 W solar panel) and then increase it later. What if I did the whole project myself instead of hiring someone to do it? I prepared a spreadsheet to track all that.
Every year since 2018 I would track the costs until in 2020 the costs came down so much so that I could break-even in 5 years or less. This is was the plan
|No. of units consumed in Jan 2020||229|
|Number of 335W panels planned||3|
|Solar panels will generate these many units||120.6|
|Units used from grid||108.4|
We were consuming an average of 229 units per month in 2020. Using 1000 W solar energy (three 335 W panels), we can generate around 120 units. The cost to setup a 1 KW solar farm as quoted by a solar installation company is as follows
|Solar converter kit||2395|
|*Batteries and UPS not requrired since we already have them|
And the number of years it would take to recover the cost came out to about 5 years! So that was the plan.
I was all ready to go for the solar panel installation in 2020. Unfortunately COVID-19 happened and we went into a lock down. A lot of things become uncertain and the more troubling fact was that I am coping with a few other lows in 2020. See the following posts for details
So I postponed the project to 2021. Unfortunately, this year did not turn out to be that great either (financially speaking) :). Will explain in some other post. Anyway, even with mounting set-backs I decided to go forward with the project. More details in my next post. Interestingly I came across an article that mentioned that the electricity tariff is going to be hiked by an average of 30 paise in Karnataka soon. So this project is starting at a good time!