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Energy Return on Energy Investment

Energy return on energy investment is a procedure where a particular amount of energy consumption takes place to produce specific energy. EROI is a vital factor for the pricing structure of the energy sources. With the help of the equation, it is possible to tap power from cheap sources and offer the same at lower prices. When there is a decrease in ratio, producing energy becomes difficult.

EROI = Energy output/Energy Input

EROI and Solar Energy

It is confusing for many to differentiate between energy payback and energy payback period. The term energy payback refers to the total energy that the solar power system requires to equal the energy that it utilized to produce the same. For instance, a solar panel consists of solar cells manufactured from silicon. The non-metal element undergoes several treatments before it is ready to tap the energy. The process consumes, and so does other components.

According to the US National Renewable Energy Lab, a solar power system has an excellent energy return on energy investment with four years. It means that, upon installing a solar system, it is possible to achieve the energy return within four years. The energy payback period changes according to the use of technology. For example, Multicrystalline current technology possesses an energy return on energy investment of 4 years while the anticipated thin-film technology possesses an EROI of 1 year.

Photovoltaic systems are capable of repaying the investment of the energy within the first four years. The remaining years of the system (which is usually 30 years), generates half of a household’s demands and helps in eliminating sulfur dioxide and nitrogen oxide.

Financial payback period

When energy payback and payback period are in the picture, it is typical to talk about the time required for the solar system to pay for itself through the savings on utility bills. According to statistics, the average period for the same is around eight years in the United States. It is logical for any owner to consider as an integral component before deciding on the investment. The 17-years of the free electricity produced by the solar energy system is a good deal.

However, nobody asks the question because there is no such term called “free-electricity.” With the help of the payback period term, one could pose the question as “how long one will enjoy free, clean, and renewable energy?”

After the 8-year payback period, the buyer or the owner of a house/business has to consider how long they are willing to use the solar energy system. If one is ready to use it for 25 years, then the period of clean energy is twice and a little more than the payback period.

 

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