Residential Solar Photovoltaic System Vs Grid Supply: An Economic Analysis Using RETScreen™

This study presents a RETScreen based economic analysis of switching from grid electricity to solar photovoltaic (PV) system for a medium sized residential building located in Ado ekiti, Nigeria. The building has an existing 2kW solar PV system in place. Input parameters in RETScreen included the solar energy resources, cost and financial data. Two cases were evaluated using the maximum unit price of electricity for a forecasted 10-year period as the cost of grid purchase. The first case considered 24hr availability of electricity from the grid and results show that the PV system has an equity payback period of 9.4 years with an internal rate of return (IRR) of 15.3%. The second case took into consideration the epileptic nature of grid electricity in Nigeria. This condition increased the equity payback period to 16 years and 7% IRR. This shows that a solar PV is more economically rewarding in location with reliable grid electricity and relatively cheap cost of electricity.