Solar power is a product with a lot of attention paid to its capacity in watts and kilowatts. Its value is considered in terms of the kilowatt-hour: the electricity generated by the system and the electricity saved by offsetting grid purchases. But the size of a solar installation is not the only factor that determines its value. If a large amount of electricity is generated when the household is not consuming it, the benefits delivered by these watts are significantly reduced. This is especially relevant for households that do not live in their homes during the day. Solar arrays generate electricity with the strength of the sun: powerful in the morning, weaker in the late afternoon. Electricity consumption in the house, meanwhile, can be relatively low throughout the day. If the size of the solar installation is significantly larger than the power needs of the house, the watts that flow into the house will not be enough to justify the investment.
The Relevance of Residential Solar Power Benefits to Load Profile
When considering the value proposition for a residential solar installation, the most valuable kilowatt-hour is the one that flows from the solar array into the house at the moment it was generated. The electricity generated at noon can power an air conditioner, refrigerator, water pump, washing machine or any other appliance. This reduces the need to purchase electricity from the grid. The value of the additional electricity generated changes when the instantaneous load no longer reflects the actual needs. If the house only consumes 1 kW of power while the inverter outputs 4 kW, then only about 1 kW will go to the house and the other 3 kW will have to be directed elsewhere. This is why residential solar power benefits are much more relevant to the household's consumption profile than the capacity of the inverter.
Why Oversized Arrays Can Limit the Value of Additional Watts
Generally speaking, the more kilowatts the array generates, the more value it gives the household. But the value of additional capacity is not always linear.
Suppose we have two households: one uses energy primarily during the day, and the other - at night. The array size that would benefit the first household will not be of much benefit to the second. The reason is obvious: if the house is empty during the day, then the solar array that is large enough to meet the needs of the home when it is occupied will simply generate electricity that the house does not need during the day. This, in turn, reduces the value of adding more capacity to such a PV system.
Export Compensation Determines the Value of Extra Capacity
The value of the additional capacity is also partially determined by the conditions for exporting electricity to the grid. Excess electricity from a solar installation does not always have the same value as kilowatt-hours consumed in the house.
Depending on the conditions, the value of these kilowatt-hours can range from nearly full reimbursement (if the rate for exporting is close to the retail rate) to complete devaluation (if the utility does not reimburse at all). Another nuance is that the Department of Energy specifically emphasizes that solar savings depend on a number of variables, including consumption, system size, production and export compensation.
Annual Consumption Does Not Always Indicate System Needs
One of the pitfalls in calculating the size of a solar system is the emphasis on annual consumption. Let's say the house consumes 9,000 kWh of electricity per year. At first glance, this information is sufficient to calculate the size of the solar system.
But in reality, this is not the case. Two homes could have the same annual consumption but significantly different load profiles. One house could use most of its electricity during the day, while another might use most of its electricity at night.
The first household will be able to consume a large part of the solar energy online, and the second will have to export it to the grid. Information about annual consumption is not enough to determine the relevance of a solar installation, but the distribution of electricity consumption throughout the year is much more meaningful.
The Role of Storage and Flexible Loads
One solution to the problem of overspending on a solar installation is the use of battery storage. Storing energy allows you to shift kilowatt-hours from a period of high production (daytime) to a period of high consumption (evening). The use of flexible loads such as water heaters or washing machines can also help by consuming more energy during the day when the sun is shining.
But batteries are an additional source of expenditure. Thus, the question of the economic feasibility of such a battery arises.
Why Efficiency Is Not the Main Criterion for Residential Solar Power Benefits
Solar panels' efficiency is sometimes compared using their ratios. However, an efficient inverter does not necessarily translate into more savings for the homeowner. Efficiency basically means how much energy the panel is able to extract from the available sunlight at a given time. Therefore, it does not take into account whether the homeowner will be able to utilize the power generated.
A smaller system that is able to meet the daily needs of the household would be more efficient than a larger system that produces more electricity than required. The main concern when it comes to residential solar power benefits is not the amount of electricity that your rooftop can produce, but the proportion that you can use.
A Practical Look at Solar Sizing for Residential Applications
A careful examination of the electricity bill and the collection of information about the electricity consumption of the house during the day will allow identifying the problem areas and determining the size of the solar system. Several aspects should be considered when determining the size of the system:
- Average power consumption per day and season.
- Power consumption in the evenings and at night.
- Powerful electrical appliances and their planned use.
- The rules for exporting electricity to the grid in the region of residence.
- The relevance and cost-effectiveness of adding battery storage.
Understanding the nuance of the relationship between the size of a PV system and the consumption profile of a home is a key to finding the most cost-effective size for a given customer.
The Role of Load Profile in Residential Solar Power Benefits
When determining the value of residential solar power benefits, the load profile of the house should be examined. Solar power systems that follow the load profile of the house allow you to save the most money because they directly offset the need to buy electricity from the grid.
Arrays that exceed the instantaneous needs of the house may have lower benefits if their additional capacity is not consumed or stored.
Changes in the conditions for exporting electricity to the grid can also affect the economics of the solar system: daytime production surpluses may become more or less valuable.
Infrax Renewable works with residential solar system clients and considers their electricity needs, consumption patterns, and financial goals when designing a system.
Avoiding the “Bigger Is Always Better” Fallacy
Most home owners tend to think that the more solar panels they can fit on their roof, the more electricity they can generate and the more savings they can realize. But the more watts added to the inverter, the more it can offset the need to buy electricity from the grid.
An oversized system tends to have a higher upfront cost and produce more electricity at a time when the house is not consuming it. If the value of exported electricity is significantly lower than the value of avoided grid purchases, then the additional watts will not be justified.
The more relevant question is whether the household will actually consume the added capacity. If the house is being renovated and large energy-consuming appliances are being purchased, then expanding the capabilities of the PV system at the same time will be more cost-effective.
Conclusion
In residential solar applications, the size of the system, the consumption profile of the house and the conditions for exporting electricity to the grid interact in a way that is not immediately obvious.
A large array can generate impressive numbers in kilowatt-hours, but if the instantaneous needs of the house are not met, its value is significantly reduced. The analysis of consumption and the collection of information about the operation of electrical appliances will allow the homeowner to determine the most cost-effective size of the array.
In residential solar projects, the key to capturing value is to carefully consider the interaction of kilowatt-hours of generated electricity, instantaneous needs and battery storage capabilities.
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