INVOLAR Microinverters

Evaluation of ROI of a 3 kW PV system

The purpose of government support of PV is to encourage the development of renewable energy by creating an environment conducive to investment.

This could be achieved through:

Feed-in tariffs

Net Metering Scheme

Premium Price

Subsidy (I, II, III)

Forward Sales Contract

LEGISLATION

Country RegulationThailand Feed-in tariffPoland Green Certificate

Hawaii FIT/ Net Metering Scheme

Croatia FITSlovenia FIT/ Premium priceSwitzerland FITSingapore Forward Sales ContractHungary FITCyprus Premium Tariff/Subsidy

ELECTRICITY PRICES BY COUNTRY

Country Price ($/kWh)

Thailand electricity price (0.08) +0.19-0.22

Poland 0.19Hawaii 0.39Croatia 0.16

Slovenia 0.17Switzerland 0.23Singapore 0.21Hungary 0.14Cyprus 0.37

SYSTEM INFORMATION

TOTAL COSTS OF THE SYSTEM

Central Inverter Microinverter Unit

Panel cost 1800 1800 USDInverter cost considering

warranty 2250 1560 USD

Monitoring system 0 220 USDLabor cost 1050 900 USDTotal cost 5100 4480 USD

Total cost plus VAT 6120 5376 USD

System cost information

Size: 3KW system USD Price + VAT

Nb of panels 12

Panel cost 150 180

Total panel costs 1800 2160

Inverter cost 900 1080

Microinvertor 130 156Communication

Gateway 220 264

Thailand

• Use a feed in tariff premium system, whereby the producers receive market price for the electricity generated, plus a fixed premium

• Systems up to 10kW in size will receive a premium of $0.22/kWh

• Systems from 10 kW - 250 kW: $0.21/kWh

• Systems from 250 kW – 1MW: $0.19/kWh

• Fixed for 25 years

• Must sell all electricity generated – electricity price from grid: 0.08 $/ kWh• Systems must be installed by December 2014

• The legislation was lunched in July 2013

http://revolution-green.com/2013/07/28/thailand-solar-a-shinning-example-for-the-rest-of-the-world/http://helapco.gr/pdf/FiT_vs_FiP_NREL.pdf

LEGISLATION : Feed-In Tariff

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 7 years, while the payback time of the same system with microinverters is ≈ 5 years* Average salary in Thailand- 8500 USD / year

FINANCIAL ASPECT: Amortization and ROI

Poland

LEGISLATION: Green Certificate for 1MWh

Green Certificate (certificate of origin) per 1 MWh

• Electricity producers may also sell their electricity on the market or offer it to an electricity supplier at last year's market price

• Operators of micro-installations (up to 40 kW system) who decide to sell their generated electricity to an electricity supplier receive only 80% of last year's market price. (100% market price of electricity for more than 40 kW system)

Electricity market price 2012: 0.19 $/kWh80% = 0,152 $/ kWh

• Fit in 2014 will be 0.12 $/kWh

http://www.res-legal.eu/search-by-country/poland/single/s/res-e/t/promotion/aid/quota-system-2/lastp/175/

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 17 years, while the payback time of the same system with microinverters is ≈ 12 years.

FINANCIAL ASPECT: Amortization and ROI

Hawaii

LEGISLATION: Feed-in tariff / Net Metering SchemeChoose between FIT and Net Metering Scheme

Net Metering Scheme: • Not paid, but receive credits for excess electricity generated that will offset electricity consumed when the PV system is not producing• No monthly fee• Not taxed• Do not need insurance for systems under 10 kW• “storage”-> “credits” -> buy for “free”

FIT• Receive payments for any energy fed into the grid. For systems up to 20kW, receive $0.21/kWh• Any electricity consumed from the grid is charged at $0.25 kWh• Must pay $25 a month to follow a FIT system.• Taxed on FIT payments. • Need insurance.

*http://www.heco.com/portal/site/heco/menuitem.508576f78baa14340b4c0610c510b1ca/?vgnextoid=2ef1894ba55bb210VgnVCM1000005c011bacRCRD&vgnextfmt=default&cpsextcurrchannel=1

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 9 years, while the payback time of the same system with microinverters is ≈ 6.5 years.

FINANCIAL ASPECT: Amortization and ROI

CROATIA

• For PV installations with a capacity of more than 1 MW, the feed in tariff is equal to the average electricity production costs

• Based on these figures, the following tariff rates apply:

Installation size≤ 10 kW: 0.46 $ / kWhInstallation size 10 kW – 30 kW: 0.39 $ / kWhInstallation size 30 kW – 1 MW : 0.28 $ / kWhInstallation size 1 MW: average electricity production costs

There is a cap for solar energy: The Croatian electricity market operator provides feed-in tariff funding only for the first 15 MW of building-integrated PV capacity and the first 10 MW of other PV capacity

*http://www.res-legal.eu/search-by-country/croatia/single/s/res-e/t/promotion/aid/feed-in-tariff/lastp/359/

LEGISLATION : Feed-in Tariff

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 8 years, while the payback time of the same system with microinverters is ≈ 5.5 years.

FINANCIAL ASPECT: Amortization and ROI

SLOVENIA

LEGISLATION : Feed-in Tariff / Premium Price FIT (Guaranteed price)• sell electricity to the Slovenian power market operator Borzen at a "uniform

annual price", i.e. the feed-in tariff (alternatively, they can opt for a premium tariff). This guaranteed price applies only to plants whose capacity does not exceed 5 MW

• The following feed-in tariffs are calculated for October 2013 :Building mounted PV installations:up to 50 kW: 0.16 $ / kWh up to 1 MW: 0.15 $ / kWhup to 5 MW: 0.12 $ / kWh

Other PV installations:up to 50 kW: 0.15 $/ kWh up to 1 MW: 0.14 $ / kWh up to 5 MW: 0.12 $ / kWhFor each following month the tariff is reduced by 2%.http://www.res-legal.eu/search-by-country/slovenia/tools-list/c/slovenia/s/res-e/t/promotion/sum/192/lpid/191/

LEGISLATION : Feed-in Tariff / Premium Price

Premium Price

• Operators of renewable energy plants with an installed capacity of up to 5 MW may choose to sell their electricity directly on the market instead of receiving the guaranteed purchase price (feed-in tariff). In this case, they will receive the so called "operational support" (i.e. a premium tariff). Power plants with a capacity of more than 5 MW may only opt for this support scheme

http://www.res-legal.eu/search-by-country/slovenia/tools-list/c/slovenia/s/res-e/t/promotion/sum/192/lpid/191/

Building mounted Price($/kWh)

up to 50 kW 0.16

up to 1 MW 0.15

up to 10 MW 0.13

up to 125 MW 0.13

Other PV Price($/kWh)

up to 50 kW 0.15

up to 1 MW 0.14

up to 10 MW 0.11

up to 125 MW 0.10

Conclusion: The payback time of a 3kW system with a central inverter when the producer decides to consume all the electricity generated is ≈ 20 years, while the payback time of the same system with microinverters is ≈ 14 years.

Comments: the amortization time is high because of the low amount of money the system owners receive as FIT/Incentives. Customers prefer to self-consume all electricity

FINANCIAL ASPECT: Amortization and ROI

SWITZERLAND

LEGISLATION : Feed-In Tariff• As of April 2014, <10kW will receive a compensation of max 30% of investment

costs

• All energy consumers pay $ .01 more on their energy bill for every kWh consumed to fund the feed in tariff = budget of $350 million a year

• Solar capped at 5-10% of total FIT budget. Will stay at 5-10% as long as PV power production costs are $0.55 higher than average power production price of $0.09. Can increase to 30% of the budget as PV prices reduce

• Assured for 20 years

• Long waiting list for PV until quotas are increased in 2014. • Plan to cut FIT by 35-40% and lower remuneration period to 15 years. • Swiss Solar Association estimates a ROI at 22 years

http://www.swissolar.ch/en/unsere-themen/feed-in-remuneration-for-electricity/ http://www.pv-magazine.com/news/details/beitrag/switzerland-plans-radical-solar-subsidy-cuts_100012484/#axzz2liIAv1hC http://www.bfe.admin.ch/themen/00612/02073/index.html?lang=en http://www.swissolar.ch/fileadmin/files/swissolar_neu/1._Unsere_Themen/1.02_KEV/KEV-Tarife_eng.pdf

LEGISLATION : Feed-In Tariff

Plant Category Performance category Tariff ($/kWh)

Ground Mounted ≤ 10 kW 0.37 $/kWh

≤ 30 kW 0.30 $/kWh

≤ 100 kW 0.27 $/kWh

≤ 1000 kW 0.26 $/kWh

> 1000 kW 0.23 $/kWh

Attached ≤ 10 kW 0.41 $/kWh ≤ 30 kW 0.32 $/kWh

≤ 100 kW 0.30 $/kWh

≤ 1000 kW 0.27 $/kWh

> 1000 kW 0.26 $/kWh

Integrated ≤ 10 kW 0.47 $/kWh

≤ 30 kW 0.41 $/kWh

≤ 100 kW 0.37 $/kWh

≤ 1000 kW 0.35 $/kWh

> 1000 kW 0.32 $ /kWh

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 8 years, while the payback time of the same system with microinverters is ≈ 5.5 years.

FINANCIAL ASPECT: Amortization and ROI

Singapore

LEGISLATION: Forward Sales Contract – Electricity Future Market

• electricity generators can choose to enter into FSCs, in return for participating as market markers in the electricity future market

• the FSCs provide participating generators with certain level of revenue certainty particularly in the start-up phase where generators are building necessary capabilities

• the total volume for the FSC is 8,400GWh over the 3-year tenure, which is approximately 6% (per annum) of the forecasted annual electricity demand from 2014 to 2016. The volume of FSC (i.e. 700HWh per quarter) is to be allocated evenly across all time periods in the quarter during the contract duration

Forecasted total annual electricity sales from renewable

sources

Average forecasted annual electricity sales (2014-2016)

Total FSC Volume over 3

years

Year 2014 2015 2016

Annual electricity

sales (GWh)

45, 140

46,668

48,249

46,686

8,400

FINANCIAL ASPECT: From the generation Company point of view

FINANCIAL ASPECT: From the consumer point of view

HUNGARY

LEGISLATION : Feed-In Tariff

• There are three different tariff rates depending on the time of day (peak time, mid-peak time, off-peak time)

• Plants approved after 01/01/2008 and of 20 MW or less:

0.14 $ / kWh; No difference between peak and off-peak hours.

• Plants of more than 50 MW (date of approval irrelevant):

peak time: 0.1 $ / kWh mid-peak time: 0.06 $ / kWh off-peak time: 0.06 $ / kWh

• FIT is the same as electricity price from grid (0.14 $ / kWh)

*http://manitusolar.com/bits/english/financing_solar_PV_Hungary.php http://www.napelem.net/hungarian_PV_Manitu_Solar/Hungarian_PV_Market_Remains_6-8MW_in_2013.php

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 21 years, while the payback time of the same system with microinverters is ≈ 14.7 years.

Very low FIT

FINANCIAL ASPECT: Amortization and ROI

CYPRUS

LEGISLATION : Premium Tariff/SubsidyCyprus promotes renewable electricity generation through:

• Net metering expired 15.11.2013

• Premium tariff - for On-grid PV installations of up to 150 kW - 0.19 $ / kWh

• Subsidy I : Domestic off-grid PV installations of up to 20 kW or off-grid PV installations of non-profit organizations of up to 20 kW – 55% of the total costs of the investment (maximum $27.084)

• Subsidy II: Domestic off-grid PV installations of up to 20 kW - 40% of the total investment (subject to a maximum of $ 20.313/plant)

• Subsidy III : PV until 3kW (aggregate installed capacity 6MW i.e. 2,000 households) - The subsidy amounts to $1.218 per kW (max. $3.656 per installation) ; in aggregate 6MW, i.e. approximately 2,000 households, of PV installations will be subsidized

http://www.res-legal.eu/search-by-country/cyprus/tools-list/c/cyprus/s/res-e/t/promotion/sum/116/lpid/115/

Conclusion: The payback time of a 3kW system with a central inverter is ≈ 11 years, while the payback time of the same system with microinverters is ≈ 7.5 years.

Low FIT

FINANCIAL ASPECT: Amortization and ROI

CONCLUSIONS

Country Type of Legislation What They Can Do Store? Price of Electricity (USD)

California FIT sell no 0.16

France FIT have to sell everything no 0.15

Holland net metering have to sell everything no 0.26

Czech RepublicFIT have to sell everything no 0.25

green bonus personal usage, sell excess yes 0.25

Portugal FIT have to sell everything no 0.36

Denmark net metering personal usage, sell excess on grid for free 0.40

Germany FIT personal usage, sell excess yes 0.36

Malta FIT

sell everything no 0.16

personal usage, sell excess on grid for free 0.16

Italy net metering personal usage, sell excess on grid for free 0.31

Country Amortization (years)

central micro

California 12 8

France 8 5.5

Holland 11.5 8.5

Czech Republic 13 9

Portugal 11 7.5

Denmark 17 11

Germany 20 15

Malta 11 8

Italy 12 8

All in all, the average amortization time for a 3 kW system with central inverters is 13 years, while the amortization for the same system but with microinverters installation is 9 years.