1.4.6Electricity, Energy and Waves
Cost Effectiveness of Renewable Energy Equipment — WJEC GCSE Science (Double Award) - Physics Revision Notes & Topical Questions
5 min read 6 parts Lesson 27 of 36
Part 1 of 4Home energy generation
Roof-top solar panels
- Roof-top solar panels Photovoltaic panels turn light from the Sun directly into electricity, or solar water panels can heat the water supply.
- They produce nothing at night and little in dull weather.
Domestic wind turbines
- Domestic wind turbines A small turbine turns a generator when the wind blows.
- Output depends strongly on how windy the location is.
Why households install them
- Why households install them They reduce the amount of electricity or gas that must be bought, so the household's bills fall.
- They also reduce carbon dioxide emissions from burning fossil fuels.
Part 2 of 4Payback time
| Quantity | Meaning | Unit |
|---|---|---|
| Installation cost | Total price of buying and fitting the equipment | pounds (£) |
| Savings per year | Fuel bill before installation minus fuel bill after it | pounds per year (£/year) |
| Payback time | payback time = installation cost ÷ savings per year | years |
Part 3 of 4Calculating payback time
1
Write down the installation cost of the equipment in pounds.
2
Work out the yearly saving by subtracting the new annual bill from the old annual bill.
3
Divide the installation cost by the yearly saving to give the payback time in years.
4
Round sensibly and state what the answer means: after this many years the savings have repaid the cost, and later savings are a true gain.
5
Example: solar panels cost £5500 to fit. The gas bill falls from £980 to £610, a saving of £370 per year. Payback time = 5500 ÷ 370 = 14.9, so about 15 years.
Part 4 of 4Deciding if it is cost effective
Evaluating the equipment
Length of payback
- Length of payback A short payback time means the equipment is a good investment.
- Times over 20 years may be longer than the equipment lasts or the household stays in the house.
Lifetime of the equipment
- Lifetime of the equipment Compare the payback time with how long the panels or turbine will keep working.
- Savings only count after the payback period is over.
Location
- Location Sunny areas suit solar panels and windy areas suit turbines.
- A poor location gives smaller savings and a longer payback.
Non-financial factors
- Non-financial factors Environmental benefits, noise and appearance may matter as much as the money to some people.
Key terms
| Term | Meaning |
|---|---|
| Payback time | The number of years before the money saved equals the installation cost. |
| Installation cost | The total price of buying and fitting the equipment. |
| Renewable energy | Energy from a source that is replaced naturally, such as the Sun or the wind. |
| Cost effective | Giving good savings compared with how much the equipment cost to buy and fit. |
| Annual saving | The reduction in yearly fuel bills after the equipment is installed. |
Avoid these mistakes
1
Dividing the yearly saving by the cost: payback time is cost divided by saving.
2
Using the new fuel bill as the saving: the saving is the old bill minus the new bill.
3
Forgetting to give a unitpayback time must be stated in years.
4
Claiming the equipment is free after installation: it still has to repay its cost first, and may need maintenance.
5
Ignoring the equipment's lifetime when judging whether it is worth buying.
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