1 MWp Solar power cost
Currently, factories, companies, and workshops are consuming a substantial amount of electricity for production and business operations. The monthly electricity bill constitutes a significant portion of the overall expenses for businesses. An excellent solution to save on electricity costs is to invest in solar power. So, what is the current cost of investing in a 1MWp solar power system? What are the investment procedures, payback time, and other specific details regarding the investment?
The estimated cost for investing in a 1MWp solar power system as of the current time in 2023 is around 480.000 to 530.000 USD. (This varies depending on project requirements and the quality of products used).
In the overall budget of a solar power system, the investment is typically allocated as follows:
|Solar panels are the primary and most crucial component, constituting up to 60% of the system’s investment cost. Choosing high-quality and reputable brands for durability and efficiency can add to the panel cost.
|Grid-tied inverters are essential for converting DC power from solar panels into AC power. The brand and quality of the inverter significantly impact the overall system cost.
|System Balancing (Support Structure)
|Roofing materials, such as metal, flat, or tile, incur varying costs.
|Junction boxes, DC and AC electrical cabinets, and other accessories.
|Labor and installation
|Costs related to workforce, installation, system testing, operation trials, grid connection, and solar O&M.
Firstly, consideration should be given to businesses, offices, manufacturing facilities, and administrative agencies with a high daytime electricity demand. These entities should possess roof spaces, such as workshop or warehouse roofs, exceeding 5,000m².
Companies can invest in solar systems for self-consumption or participate in ESCO models (installing solar without capital investment) to optimize electricity costs.
Ultimately, solar energy is an effective solution for businesses aiming to portray an environmentally friendly and green image. It allows businesses to produce high-quality, eco-friendly products.
To calculate the payback time for a solar project, follow these steps:
- Step 1: Determine the total final investment cost.
- Step 2: Identify the annual profit, considering financial benefits such as electricity consumption cost (if not using solar power) and revenue from selling excess electricity.
- Step 3: Divide the total final investment cost by the annual financial benefit. The result will be the number of years required to recoup the investment.
(Consulting firms will provide specific figures for investors based on the project)
Typically, for a 1MWp project, the payback time is around 4.5 to 5 years. However, with a project lifespan of nearly 30 years, businesses can enjoy long-term benefits, saving billions annually in electricity costs.
The benefits provided by solar energy are incredibly practical and economically valuable. On the flip side, the increasing demand for electricity has led to shortages in the power supply. Installing solar power is indeed a solution that reduces pressure on power transmission lines and empowers customers to be more proactive in electricity usage.
- Significant annual electricity cost savings
The primary and most significant advantage that businesses gain when deciding to install solar power is the savings in electricity costs. Clean energy generated by the system can support production and business activities, helping companies reduce their reliance on conventional grid electricity, especially during peak hours. This results in effective power management, operational cost savings, and improved business efficiency. Notably, solar power systems have a lifespan of 25 to 30 years, making it a long-term investment that businesses should consider.
- Reducing the risk of power shortages due to overloading
Installing solar power not only benefits individual businesses but also has a positive impact on the national electricity grid management. The grid system is less likely to experience overloads in certain areas, especially in industrial zones and manufacturing hubs that require a substantial amount of electricity for their operations.
- Green certification, increased credibility, and profits
Businesses adopting green technology have significant opportunities to attract investments and expand their customer base. According to Nielsen’s survey, 75% of customers prefer eco-friendly products. This preference has led to a global sales growth of over 4% for sustainable brands, compared to less than 1% for other brands.
Building a ‘green’ brand also helps businesses get closer to customers and expands opportunities for collaboration with international partners. For businesses exporting to Europe and the Americas, partners often have requirements related to sustainable development and environmentally friendly production. Therefore, installing solar power on factory roofs helps businesses move towards an environmentally friendly image and meet these stringent standards.
- Cooling offices and factories
Another benefit of installing solar power is the reduction of temperatures in factory roofs, preventing heat during hot sunny periods. Solar panels, mounted on roofs, absorb solar radiation to generate electricity, retaining heat on the panel surface. This effectively limits the amount of heat radiated onto the roof, making the factory cooler. This is especially advantageous for factories with metal roofs, a common roofing material in Vietnam.
A cooler factory roof also helps save on additional costs for air conditioning, industrial fans, and cooling systems. Simultaneously, it provides a more comfortable working environment for employees, enhancing labor productivity.
– Solar panels absorb sunlight and convert it into direct current (DC) electricity, supplying it to the inverter.
– Inverter converts the direct current (DC) from the solar panels into alternating current (AC) with the same phase, frequency, and voltage to synchronize with the grid, providing power to the business.
– In optimal sunlight conditions, solar panels generate sufficient electricity to meet operational needs. The system prioritizes the use of solar energy. Conversely, during insufficient sunlight, the system automatically draws additional power from the grid to ensure normal operation.
– If the solar panels produce more electricity than consumed, the surplus is fed back into the grid. The power company installs a bidirectional meter at no cost to measure excess electricity from the solar power system.
– The system automatically disconnects in the event of a grid outage to ensure safety for both the grid and users. It transitions to a dormant mode at night and resumes operation in the morning when sunlight returns.
– The solar power system operates fully autonomously, with remote monitoring capabilities. Users can track daily electricity production through smartphones or computers. The system promptly updates and notifies users of any electrical issues, facilitating timely adjustments and repairs.
For over 17 years, DAT Solar has been steadfast in its investment, collaboration, and sustainable development strategy, delivering globally acclaimed solar energy solutions to enhance efficiency for over 10.000 customers and partners nationwide.
DAT’s comprehensive value ecosystem comprises nearly 350 team members, with 50% being application engineers. The product lineup includes collaborations with global partners such as Canadian Solar, INVT, SMA, Sungrow, Sokoyo, Schneider Electric. With official warranty policies, experience in deploying over 10.000 solar power systems with a cumulative capacity exceeding 800 MWp, DAT Solar has garnered high praise and satisfaction from customers. The company caters to all technical, aesthetic, and quality requirements for large-scale solar projects.
For businesses and investors interested in solar power investments, connect with DAT Solar via the toll-free hotline at 1800 6567. The company is ready to accompany you throughout the project lifecycle starting today.