Monthly Electricity Bill Reductions Through Grid-tie Systems in Costa Rica
The Problem: Costly Monthly Electricity Bills
Costa Rica has a progressive electricity billing system for commercial and residential clients of its electricity grid. This means that if your monthly consumption in kWh (kilowatt hours) surpasses a certain amount, the price per kWh of consumption increases to a higher rate. Simply put, the more you consume beyond a certain limit, the more you pay. Also, your electricity billing varies depending on the seasons, rainy or dry. In other words, your electricity bill is higher during the dry season (January 1 to May 31 or 5 months) and lower during the rainy season (June 1 to December 31 or 7 months).* This is why your monthly bills are so high if you are a homeowner who enjoys many of the creature comforts of modern life--air-conditioning, a clothes dryer, a microwave oven, a Jacuzzi, or a swimming pool. And it’s no wonder. Below are present residential monthly billing rates by season and kWh of consumption:
Residential Monthly Bill Rates in Colones—(from ICE Tarifas Electricas 2010)
Rate 1 First 200 kWh Rate 2 201 to 300 kWh Rate 3 Every additional kWh
Dry Season
¢ per kWh
59
107
147
Rainy Season
¢ per kWh 42
75
103
Yearly Avg.
¢ per kWh 45.75
81.66
112.58
Let’s say you have 500kWh of monthly electricity consumption, a relatively comfortable, but not excessive standard.
You would pay for this electricity at three progressive rates:
1) Rate 1: The first 200kWh of the 500kWh would cost you
about $17 (200kWh X ¢45.75 = ¢9,150 or ($16.66).
2) Rate 2: The 201st to the 300th kWh would cost about $15 (100kWh X ¢81.66 = ¢8,166 or $14.87).
3) Rate 3: The 301st to the 500th kWh would cost you about $41 (200kWh X ¢112.58 = ¢22,560 or $41.00).
Therefore, your average monthly bill would be $73 ($17 + $15 + $41 = $73). But now we must calculate the taxes
Taxes on Your Bills
Each month you also pay a public utility charge of ¢2.58 every kWh and a 13% sales tax:
Rate 1 First 200 kWh Rate 2 201 to 300 kWh Rate 3 Every additional kWh Total 500kWh Monthly Bill
Avg. Monthly Cost + Ut. Charge $17.60
$15.35
$41.95 $74.90
13% Tax
&17.35
$19.98
&47.40 $84.73
Now let’s suppose that you can live with paying for Rate 1, the first 200kWh ($19.98) and even Rate 2, the next 100kWh ($17.35), but you want to avoid paying for Rate 3, the 301 to 500kWh ($47.40), the most expensive. You can eliminate payment for these last 200kWh of your 500kWh monthly consumption by acquiring a grid-tie solar system.
The Solution: A Grid-tie Photovoltaic System
In a grid-tie system, you install photovoltaic (solar) panels that are tied to and generate electricity for the public electricity grid (ICE), which is by law obligated to compensate you for it. In other words, you can reduce your monthly electricity bill substantially, or even completely.
So here’s how, with a grid tie-system, you can eliminate the most expensive part of our sample 500kWh monthly electricity bill—Rate 3’s last 200kWh’s:
If you invest $16,000 to install a grid-tie system, you’d be able to generate Rate 3’s remaining 200kWh’s ata savings of $47.40 per month. As we have seen, in 2008 there has been a 41% increase in residential bills; now there is even another 15% increase on the way. If you count this variable into the equation, by calculating a modest average rate increase of 15% a year (not counting inflation), you’d be able to pay off your $16,000 grid-tie system investment in less than 12 years! Also consider that solar panels are the most expensive component of a grid-tie system; they comprise nearly 90% of the total system cost, are guaranteed for 25 years, and are designed to last for more than 40 years. Therefore, your investment is extremely safe.
The charts below illustrate your yearly payment savings toward recouping the $16,000 initial outlay for Rate 3’s 200kWh monthly consumption grid-tie system. Starting at about $569.00 ($47.40 X 12 months = $568.80) the first year, each successive row reflects a 15% yearly increase over the previous row’s (year’s) payment. At that rate, as the line graph illustrates, it would take less than 12 years to pay off your initial investment of $16,000. Then, after 12 years, the grid-tie system will continue to add value to the investment for many years to come.
Other Benefits Beating Inflation
There are two other benefits that accompany your grid-tie investment. One is that the grid-tie system frees you from “the cruelest of taxes”—Costa Rica’s more than 10% yearly inflation. No matter how much inflation depreciates the value of money, the grid tie system will regardless continue to pay for the same amount of kWh it is designed to generate! Add at least 10% a year to your savings.
Greenhouse Gas Emission Credits
The Kyoto Protocol Agreement, adopted in 1997 and entered into force in 2005, has a provision for monetary compensation of $25.00 per ton per year of greenhouse gas (GHG) emissions saved. Returning to our sample 500kWh monthly consumption sample, its Rate 3’s last 200kWh’s grid-tie system would save 2.4 tons of GHG emissions per year. This entails an income of $60 per year (2.4 X $25 = $60). Over the 25 year guaranteed life-span of the solar panels, your income from GHG emission compensation equals $1,500 (25 years X $60 = $1,500).
