Generator or Solar Power?

With our unreliable expensive electricity, a lot of people are looking around for alternative power options.

Many people opt for the low up-front cost of a diesel or petrol generator.  They are relatively cheap to buy and even a modestly sized unit will provide enough power for most of the appliances in the average home.

Installation is relatively easy as well, requiring only an adequately specified change over switch to be installed at the incomer.

In comparison solar power is very expensive up-front.  As well as being relatively complicated to specify and install.  But once installed it needs virtually no maintenance and lasts a long time.

So why even consider solar power?

The Cost of a Solar System Includes all its Fuel Upfront

A lot of people compare the cost of a solar system to the purchase price of a cheap generator and then are astounded at the difference, but they forget that the generator price does not include the fuel, while with a solar system, the system price includes the fuel for 5-25 years (depending on whether the solar system includes batteries and if so, how long they will last)!

So when comparing the two alternatives, you should include the price of diesel or petrol plus maintenance of the generator over the equivalent design life of the solar system.

Lets do a quick example for a small home that consumes 10kWh per day with a maximum demand of 3kW.

Cost of Solar System

Using the OffGridDIY solar system calculator we can estimate the equipment required for a 10kWh daily demand as follows:

That gives a total of R105,114 for the major equipment required.

The batteries are rated for about 1750 cycles at the design depth of discharge of 50% so that means the system should last about 4.79 years before the batteries need replacement.

If you replace the batteries at that time, then over a period of 9.58 years the system should cost about R153,378 in total.

Cost of Generator plus Fuel

For a 3kW maximum demand one should buy a slightly larger specified generator – lets say a 5kW generator.  A quick search yields a price of about R16,000 for a suitable petrol unit.

The energy content of various fuels can be found here.

Petrol has an energy density of about 9.7 kWh per litre and at its current price of about R12.50 per litre that means the cost of energy in petrol is about R1.29/kWh.

However an internal combustion engine has an efficiency of about 30%.  In addition there will be other generation losses, so if we assume overall generation efficiency of 25% then the cost of generating electricity using a petrol generator will be about R5,15/kWh.

So for a home that requires 10kWh daily, that would cost R51.50 per day.

So if we ignore maintenance (which is what most people will probably do anyway), then the cost per month for fuel will be about R1,545.00.

So over 4.79 years, the cost of fuel will be about R88,890, excluding any fuel price increases.  If you add the cost of the generator that becomes R104,904.  Which is a lot more comparable to solar system.

Over a longer period of 9.58 years the generator system will cost R193,794, which is more than the equivalent cost of the solar system over the same period.

Conclusion

The two comparison’s above are not exhaustive, for example no installation costs were included in either scenario, and none of the ancillary installation equipment such as cables, trunking, mounting rails for the solar panels etc were included, so if you want a 100% precise comparison those should all be taken into account.  But that was not the point of this article.

The point of the article is just to point out that a generator is not as cheap as it necessarily seems at first. By taking the cost of fuel into account it can be seen that the cost of purchase and running a generator is about the same as a solar system in the medium term, with solar being a bit more expensive in the shorter term.  But the longer the period you use to do the comparison, then the better the case for solar will become.  Most good solar panels will last 25-30 years.

For simplicity, this comparison ignores the time value of money however, which is a benefit in the case of a generator because fuel costs are delayed into the future while the solar costs tend to be upfront – but that is provided fuel costs do not increase faster than the rate of inflation.

Another point to consider is that in the solar system specified above, almost half the system cost was for batteries.  In a grid-tied solar system, batteries are not needed and thus the comparison to the costs of a generator get substantially better.

2 Comments

  1. Sakhele August 16, 2016 Reply

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