Cost Effectiveness of Renewable Energy Equipment (WJEC GCSE Science (Double Award): Physics): Revision Note

Cost Effectiveness of Renewable Energy Equipment

• Some households install their own means of generating renewable energy, such as roof-top solar panels and domestic wind turbines 

• The cost-effectiveness of introducing domestic solar and wind energy equipment can be determined by evaluating

  • The installation cost of the equipment

  • The amount saved in fuel costs

• This is called the payback time

$paybacktime\left(years\right)=\frac{installationcosts}{savingsperyear}$

• This is a way of determining the amount of time (in years) that the equipment needs to be fitted before the savings start to outweigh the installation costs

  • For example, if a solar panel costs £5000 to install and saves £500 per year in electricity bills, the payback time would be 5000/500 = 10 years