Is a photovoltaic system worth it? Everything you need to know

The attractive thing about photovoltaics is that the flexible modules can be used in many places: on your own roof, as a balcony power plant or even as a solar carport. In 2022, 10.9% of the electricity generated in Germany was already produced by photovoltaic systems. But is photovoltaics worth it? We clarify the arguments for and against.

Photovoltaics is not worth it: Truth or error?

Again and again you can read that photovoltaics are not worthwhile. And the arguments for this are always the same: the high investment costs in a new solar system, the decreasing remuneration for feeding into the grid or the low number of hours of sunshine in Germany. But how much truth is actually behind it? Let's get straight to the point: Photovoltaic systems are still sensible and lucrative.

On the one hand, they make a major contribution to climate protection: solar energy is a non-finite resource and protects our environment compared to fossil fuels. On the other hand, they help to reduce the electricity bill: While you have to buy a kilowatt hour of electricity for about 31 cents from the grid without a photovoltaic system, you produce solar energy with a corresponding PV system for costs of about 10 to 12 cents per kilowatt hour – i.e. less than half.

The prejudice that the sun doesn't shine often enough in Germany persists. In view of 1,600 hours of sunshine per year, the equivalent of 66 full days, this rumour can be refuted. That is 1,000 kilowatt hours per square metre per year. Even at night or when it is cloudy or raining: Thanks to modern solar power storage systems, solar energy is still available.

Amortization of PV system: costs of a solar system

It is above all the acquisition costs of a PV system that prevent people from producing their own solar power. Therefore, the question of whether or when a photovoltaic system is financially worthwhile is quite justified. However, the costs should be considered over the entire lifetime of the solar system. On average, the useful life is over 30 years.

Let's do an example calculation and assume a price of 7,500 euros for a solar system for a four-person household. In addition, there are costs of about 750 euros for the grid connection and the acceptance, so that the total costs for the purchase are 8,250 euros. You can also expect additional costs for maintenance, repairs, etc. of an average of 250 euros per year. The cost of the purchase can still rise slightly if the system is financed by a loan and interest is added.

Solar system self-consumption: savings through solar system

This is where solar system self-consumption comes into play: This means that the self-generated solar power is also used by the company instead of feeding it into the public power grid. This also includes solar power, which is temporarily stored in an energy storage system and later consumed. A self-consumption share of up to 70% with battery storage is considered realistic. You can calculate your solar power self-consumption as follows:

Self-consumption = amount of solar power produced – amount of electricity fed into the grid

As a rule, self-consumption is more worthwhile than feed-in. You can calculate how much you save by using the electricity you generate yourself compared to the electricity you buy as follows:

Savings = self-consumption x current electricity price

With the average annual electricity consumption of 4,500 kilowatt hours of a four-person household, 940 euros can be saved per year. We expect production costs (costs for the production of our own solar power) of 10 cents and a price of 31 cents per kilowatt hour for electricity from the grid.

If we add up the acquisition and annual costs for the solar system and compare them with the annual savings, we can assume that the PV system will pay for itself within about 10 years. However, if more electricity has to be purchased from the grid or if the system is financed by debt, this period can be extended.

Electricity from the grid costs about 31 cents per kilowatt hour, while the production costs with a solar system are only between 10 and 12 cents.

When is photovoltaics most worthwhile?

Because of the high investment costs, you should think carefully about whether the purchase of a photovoltaic system makes sense. But there are other factors that influence this question:

• Roof area: Find out how large the roof area is that you have available. The size determines how many PV modules can be installed and, accordingly, how much electricity yield you can expect. Detached family houses perform well in comparison. If you live in a terraced house, you should remember that a minimum distance of 0.5 to 1.25 meters (depending on building regulations and federal state) must be maintained between the fire protection wall and the system.
• Shading: Trees or buildings in the immediate vicinity can cast a lot of shade. This can severely limit the electricity yield of a solar system. From this point of view, it is also important that you have the PV system cleaned regularly. In this way, you remove dirt and enable good efficiency and the longest possible service life.
• Roof pitch: The roof pitch plays an important role, but can now be compensated for by special mounting systems for solar modules. This allows you to extend the period in which the sun shines on the PV system. A roof pitch of 30 degrees is ideal.
• Roof orientation: The orientation of the roof should also be taken into account, but in combination with a battery storage system, it plays a rather subordinate role. The storage system allows you to compensate for any fluctuations in electricity generation. A southern orientation would be ideal.

If all these factors are positive, the expected electricity gain is higher. So the more electricity you can generate with your photovoltaic system, the more worthwhile it is to buy.

Is photovoltaics with storage worthwhile?

As a rule, solar power is not generated at the same time as we need it. On weekdays, for example, we mainly consume electricity in the mornings and evenings. But a large part of the solar power is produced during the day. Even if a battery storage system increases the acquisition costs, it makes perfect sense: With a storage system, you are independent of the time in which it is generated when using solar power.

If the PV system produces electricity during the day that you do not need in the household, the energy generated is temporarily stored and can then be called up at a later time, for example in the evening. A battery storage system therefore increases the proportion of your self-generated electricity that you can use yourself, e.g. for cooking, watching TV, charging your e-car at the wallbox, etc. In this way, you become less dependent on the electricity supplier and promote your self-sufficiency in times of rising electricity prices.

By the way: "Too much" solar power generated is only fed into the public power grid when the electricity storage system is full. This relieves the public grid infrastructure.

Photovoltaic systems produce electricity when the sun hits them. With storage systems, the energy is retained regardless of the weather.

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Subsidies for photovoltaics: Subsidy for solar systems

If you decide to install a solar system, you have the option of applying for subsidies for financing. The Kreditanstalt für Wiederaufbau (KfW) offers a so-called development loan, which starts at 1.03 percent effective annual interest rate and covers up to 100 percent of the investment amount. Please note: The application for the loan must be received by KfW before you start implementing the project.

In addition, with a corresponding promotional loan from KfW, you can not only promote the purchase of a new PV system with or without battery storage, but also expand an existing solar system with a battery storage system.

In addition to KfW's state funding, there are also various country-specific and regional offers in the form of loans, grants or the assumption of planning costs.

The best-known form of subsidy is the EEG feed-in tariff. Operators of a photovoltaic system are paid when they feed their own electricity into the public grid. The feed-in tariff is valid for 20 years from the commissioning of the solar system. Since the feed-in tariff is constantly decreasing (called degression), it is worthwhile to put a photovoltaic system into operation as early as possible. Since August 2022, new remuneration rates for feed-in have been in force: solar systems up to 10 kWp (kilowatt peak) with self-supply that are put into operation in 2023 will receive 8.2 cents per kWh. Systems over 10 kWp will receive 7.1 cents per kWh. In the case of full feed-in, which must be registered with the grid operator in advance, systems up to 10 kWp receive 13 cents per kWh. Larger systems will still receive 10.9 cents per kWh. This remuneration is fixed until January 2024. However, once your system has been installed, you will receive the specified conditions for 20 years.

In addition, no VAT will have to be paid on the purchase of a solar system from 1 January 2023. The standard taxation of the feed-in tariff paid by the grid operator will also no longer apply.

Conclusion: Is a photovoltaic system worth it? Yes!

We can sum up: Solar systems are worthwhile. Especially if you have a high demand of your own, you benefit from the low levelized cost of electricity compared to the higher prices when purchasing electricity from the grid. Solar energy is also ahead when it comes to electricity generated from a private wind turbine. Depending on consumption, the investment in a solar system can pay for itself after around ten years – and save you money afterwards. And the environment is happy too.