Determination of payback periods for photovoltaic systems in domestic properties

The paper reports on the two year performance of photovoltaic (PV) systems which were installed on 23 new build properties in South Yorkshire, UK, and the impact of the feed-in-tariff on payback periods. The majority of the properties (17 No.) were fitted with a 3.02 kiloWatt peak (kWp) photovoltaic system, designed to supply, on average, up to 2400 kiloWatt hours (kWh) of solar energy per annum whereas the remaining six systems were 3.75 kWp systems providing, on average, up to 3000 kWh per annum. The photovoltaic panels were integrated into the roofs at the time of construction. Datum readings were taken during commissioning in Summer 2007 with subsequent readings taken as close as possible to the second anniversary in 2009. A discounted cashflow model was developed which determined payback periods based on actual and assumed performance and different economic scenarios. A comparison is made between the Renewable Obligation Certificate (ROC) and the Feed-in-Tariff (FiT) schemes in determining payback periods. Huge variations in payback periods are shown, for example, a poorly performing 3.02 kWp photovoltaic system irrespective of quantity of electricity used in the home will take in excess of 100 years to payback under the ROC scheme. The same system under the FiT scheme with 25% electricity exported to the grid would have a payback period of 66 years. However, if the same system performed to its designed specification, the payback period would decrease to 16 years. This highlights the need of ensuring the photovoltaic systems are working to their full potential and that householders are fully aware of how to get the best from their systems.