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Energy Calculation for Solar Water Heating

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It is often said that one of the best things you can do to safe energy in a house is to install a solar water heater. "You pay back the investment in four to five years" is a common remark.

Another common assumption is that a geyser contributes about 40% to the energy consumption of a residential house in South Africa (assuming a house without a central heating system).

Calculate the payback time on a solar water heater based on the following assumptions. Cost of a new 200 liter system is R13,800. Monthly average electricity cost of R600. Geyser contributes 40% to the electricity bill. Neglect the effect of inflation.

After installing a solar water heater on your roof most the people in your street is very excited and start asking you questions. One man remarks that he has a holiday house in Stilbaai. The house is occupied for about 50 days a year. His annual electricity bill is R1200 of which R50 is a fixed connection fee. What would his payback time be assuming the geyser contributes 40 % to the electricity bill and a similar installation cost as above. Is it worth installing the solar water heater on a financial basis?


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In the 1st case:

payback time = 13800 rand /( 0.4*600 rand/month) = (13800/240) months = 57.5 months = 4.8 years
In ...

Solution Summary

This solution determines the payback time using energy calculation to make a decision to buy the solar water heater to cut costs. Brief explanations are included.