In this installment we discuss the development of a second bid for the solar home energy generation project, and a quick tour of the regulations that govern it.
As part of the next step in project development – the search for a viable project – I contacted a specialized industry supplier – this time I found it in the directory of the Guatemalan solar guild. I visited the supplier’s offices, which I found full of solar panels and electric panels containing the inverters, I observed that they are dedicated only to that, -indication that it is an industry that is «booming»-; I spoke with the manager and I felt very comfortable as this company was perceived very professional so I provided the technical parameters I had learned from the previous offer, -the offer I found in the supermarket-.
The new supplier made an offer -after visiting the project site, my house-, (i) German technology- recognize the brand, I quickly investigated it and was satisfied that it is good technology. (ii) Higher price in the order of 40% higher than the other offer. – (iii) Install 5 solar panels, which would generate 215 kWh monthly average and with that calculate Q 350 average monthly savings considering the current energy tariff of the network, VAT and the rate of public lighting.
Here I did the calculations of the «payback» of the project, and the result was 60 months (project cost divided by monthly savings). I was left wondering if this time is enough, so I calculated the internal rate of return of the project – using the MSExcel – and the result was 18%, which seemed to me financially acceptable and that still needs to add the environmental benefits, interesting investment, although it still needs to be compared with other investment alternatives that are available for funds in Guatemala.
During the visit questions arose about the project: Is there enough area to install solar panels and how much would be produced, we went up to the roof of my house and concluded that YES, within the area that I proposed – 25 square meters – 10 solar panels of 2 square meters each can easily be installed, and with that a capacity of 3 kW can be installed, with an average monthly production of 430 kWh. There are other areas on the roof that can be used, something like 300 square meters that I can use, I left that possibility open to see where the project takes me.
Here I made a stop to find out what my consumption is – by the way today I find it incredible that I started the whole adventure without checking that data ! : my average consumption 710 kWh per month – in pandemic – which would mean something like 16 solar panels for the 710 kwh.
Following the conversation the question arose: what happens if I put more than the 16 panels, that is to say, more than my average consumption? And with this in mind I decided to ask: is there any limit to the capacity I can sell to the grid? YES, the grid company, that is EEGSA, restricts to 11 KW what you can install in your house, so you are limited to about 32 solar panels. I did quick numbers with the data I already had, -nothing complicated applying simple rule of three- (215 kwh/5panels)x32 panels = 1,376 kWh per month-, I concluded that EEGSA allows renewable energy to be generated up to 1,376 kWh per month in a house.
Then I thought I would explore the business limit of the whole project, what if I have area for all 32 panels and do the whole business to sell 1,376 kWH per month? I cover all my consumption of 710 kwh and the difference with the maximum of 1,326 kwh I «sell», that is to say the 1,326-710=616 kWh left over to «commercialize». And, suddenly the supplier gave me the message that put my feet on the ground again, landed the idea of what is the business model of renewable home producer-consumer in Guatemala: If I produce more than I consume I will not get money back, they only return energy, something like a current account of what I consume against what I produce at home!
In other words, everything I produce I have to consume! They don’t pay me anything for producing it, they only recognize it to replace consumption.
I thought, that’s the concept in Guatemala of Pro-Sumidor! – Yes, that is the international jargon, but here I can produce and I have the opportunity to manage a current account with the surplus of what I produce, but I am not a generator of energy, because I do not sell energy to be paid for it, I am still a consumer!
I corroborated the regulatory information by doing my own «due diligence», I looked for the norm on which the Distribution company is based to admit the solar renewable generation in the houses, it turns out to be the «Norma técnica de generación Distribuida Renovable y Usuarios autoproductores con excedentes de Energía NTGDR, Resolution of the National Electricity Commission CNEE 227-2014», effectively article 40 indicates that they will not pay for surplus energy when they are self-producing energy users (Net Metering) – that is confirmed by definition the meter «net» and no money is received for generating energy. I found a discrepancy in the maximum capacity with respect to what the supplier told me, the standard says 50 kW for single-phase circuits – which is what homes normally have – which would result in something like 166 solar panels, which is much more than the 32 mentioned by the supplier.
You can review the standard here : https://www.cnee.gob.gt/wp/norma-tecnica-de-generacion-distribuida-renovable-y-usuarios-autoproductores-con-excedentes-de-energia/
The next step is to present the project again to the board of directors again -my wife-, however, by anticipating my conclusions today, the proposal was generated to compare our idea with the experience of other families who have already made the investment in order to learn about their experiences before making a decision. as part of best practices for formulating judgment in «family corporate governance» – as part of best practices for formulating judgment in «family corporate governance» – as part of best practices for formulating judgment in «family corporate governance».
In the next chapter will be the decision making, and if it is positive, the implementation.
PS: I found a limitation in the offer, it is not possible to monitor the data through applications, which I found unheard of, how is it possible that nowadays the data is not accessible to the user in real time? it is not fun not being able to know how «the business» is going every day; however I was able to recover my temperance and hope in developing the project with this new offer thinking that I can implement it later with technology that is commercially available and it will not be so expensive.
By the way, a good site for further information is https://www.cnee.gob.gt/wp/autoproductores/.