In this article we will discuss how much you can expect to earn from your solar cells.
So you're ready to purchase your first solar cells? Then you will no doubt be wondering how much you can earn on a daily, monthly or yearly basis. The first important thing to understand is that your rental payments only start once the system you own cells in has been installed. Once installed you will receive payments on a monthly basis, deposited into your Sun Exchange online wallet. You should also be aware that, unless otherwise stated, your earnings are based on the amount of kilowatt hours (kWhs) your solar cells generate on a monthly basis. This means that you will earn more in summer than in winter, as your solar cells generate more electricity when there is more available sunlight. You will also earn more per kWh each year of the lease - more on this later.
That's all well and good, but how much can I earn we hear you ask. Well the next thing to understand is that the earnings between projects vary. The important metric to consider is the Internal Rate of Return (IRR) that we publish for each project. Put simply, the IRR is your projected income minus the original purchase price of your solar cells. The higher the IRR, the more you are expected to earn from the project. All Sun Exchange projects target IRRs between 8% and 13%.
Note: IRR and ROI (return on investment) are very different metrics. For more information on what IRR is, how it is calculated and why we use it please read this article.
So, with that said, let's look at some examples. Firstly, each project page has an earnings estimator tool on the right hand side (shown below), that allows you to enter various information. The IRR for the project is shown in the bottom right hand corner. You can enter an amount of cells to buy (Number of cells), a lump sum amount you'd like to spend (Total spend) or a total amount of electricity you would like to produce in the first year (Year 1 energy yield). This latter field can be handy if you're looking to offset your home or business energy usage with solar through Sun Exchange.
Let's say you wanted to spend 100 USD on solar cells (you can also switch the tool to a currency of your choice using the drop down menu in the top left field). Simply enter "100" in the "Total spend" field and the calculator will update based on that amount.
As you can see in the screenshot below a 100 USD spend in this project would get you 25 solar cells, which would produce ~123.75 kWh of electricity in year 1 and would reduce ~2,549.25 kgs of CO2 over the full lease term.
You will also notice that there is a bar graph below the calculator fields. As we mentioned earlier, the amount you are paid per kWh increases annually, according to the escalation rate, and this bar graph shows you how much you are expected to earn in each year of the lease. Simply hover over each bar to see the estimated net earnings for that year. We currently only display those figures in ZAR, the base currency of our model.
The next set of data under the bar graph shows the 1st year income rate per kWh, the estimated 1st year income for the total amount of cells selected on the calculator as well as the total 20-year income for those cells.
Based on that information you can work out your estimated average monthly, weekly or daily earnings. Bear in mind though that the figures you come up with will all be averages over the full 20-year lease period.
- Estimated average monthly income: ~1.38 USD per month (332.28 USD ÷ 20 years ÷ 12 months)
- Estimated average weekly income: ~0.32 USD per week (332.28 USD ÷ 20 years ÷ 52 weeks)
- Estimated average daily income: ~0.045 USD per day (332.28 USD ÷ 20 years ÷ 365 days)
It's important to understand that the figures we provide are estimates based on the information we have when the systems are designed. The estimates we provide are not guaranteed, however we do our best to ensure the estimates are as accurate as possible. For more info on how we forecast the energy generation of our systems, check out this article.
So that's it. Now you know how to use the earnings estimator tool to figure out how much you can expect to earn. If you have any questions or you would like to get clarity on any of the above, please reach out to us!