Photovoltaic System
We will be analyzing the use of a Photovoltaic System for RED Church to determine of this sustainable feature will be feasible and/or desirable to include in the development process. The system analyzed will be a 5 kW system.
What is a Photovoltaic System?
Photovoltaic Systems (PV system) use solar panels to convert sunlight into electricity. A system is made up of one or more solar panels, usually a controller or power converter, and the interconnections and mounting for the other components. A small PV system may provide energy to a single consumer, or to an isolated device like a lamp or weather instrument. Large grid connected PV systems can provide the energy needed by many customers.
Assumptions
We are assuming a 5kW system. We are unable to assess at this time what the actual electricity usage is for the property but believe that 5kW will be a good base of implementation of this sustainable feature. The energy output from the PV system will offset the energy consumed by RED Church from traditional energy sources.
Analysis
A cost/benefit approach will be utilized. The PV system produces a projected amount of energy each month to offset energy consumption from the "grid". The idea of the analysis is that there is an initial cost to purchase and install the system and then there is a cost savings (benefit) every month which will be the payback of the investment.
Rates
Local rates are averaging at $.084 per kWh.
Tax Credits
No tax credits are available for Churches, Religious Organizations, and other Non-Profit Organizations since no taxes are paid initially.
Initial Costs
Average costs which include the PV System plus installation are $30,000.
Calculate Cost Savings (Benefit)
A formula for to calculate the benefit of the PV system is provided through the "Energy Savers" website.
1) Calculate the Electricity Production from the PV System
= (kW of PV System) * (kWh/kw-year) = kWh/year
= (5 kW) * (1700 kWh/kW-year)
***1700 kWh/kW-year is based upon geographic location and can be found on the Energy
Savers website***
= 8,500 kWh/year
2) Calculate the Electric Bill Savings
= (kWh/year) * (Residential Rate)
= (8,500 kWh/year) * ($ .084 /kWh)
= $714 Savings per year
= $59.50 per month
Conclusion
Based on our Financial Analysis, we obtain an annualized $714 savings per year ($59.40 per month) from our grid electricity consumption. The resulting payback period is 42 years. As a matter of opinion, this is not an aggressive payback period from an investment perspective. At this point, the decision will be at the choice of RED Church to include the PV System in its initial development.
It is notable that many Religious Organizations and Non-profits invest in sustainable features not just for their sustainable benefits such as reduced expenses, environmental conservation, etc., but for the image displayed to the public. Many organizations have found favorable treatment in receiving grants and other monetary gifts based upon the development, sustainability, and independence of the organization. Organizations receive praises when they strive to reduce their expenses through initial development efforts and inclusion of sustainable features like the currently discussed PV System.
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