Why is Photovoltaic (PV) Pension for Old-Age So Economy ?

According to data statistics, the empty nest old population had increased from 42% to 54% in China’s town , and from 37.9% to 45.6% in China’s village between 2000 and 2010, the old population had over 0.1 billion in 2013, in China. With the first generation only child being gradual old, the empty nest old will be increased up to more than 0.2 billion, being 90% of all the old.

The problem to support the old has been extremely urgent. In recent years, Photovoltaic (PV) Pension, as an new style for pension to support the old, emerges in China’s countryside, being paid attention. Then we would like to know what is PV Pension ? is it better ?

1. What is PV Pension for Old-Age ?
“PV Pension”: exploit the idle source of home rooftop to install distributed solar power generation system, one the one hand the solar power can power supply for home appliances, on the other hand the surplus power can be sold to State Grid, every power from the solar system can be subsidized, the subsidy criterion is kept for 20 years, the income from selling power and subsidy are paid termly each month or each season, which brings stable pension income.

2. How much can be got from PV Pension ?
Take an example in Henan province, China, a 10KW solar system, the initial investment is US$11,500, the system can generate about 12,000KWH each year, if all of the power is sold to State Grid, the unit price is US$0.12/KWH (the newest price in Henan).
Then the revenue is 12,000KWH*US$0.12/KWH=US$1440 each year.

3. The features of PV Pension.
1). The idle source of rooftop can be exploited, the old doesn’t have to work.
Home distributed solar power generation system is to exploit home rooftop to install pv system, to convert solar power into electric power. The income can be got only if to install grid tie solar system, at the same time, State and Local subsidy can be got.

2). Small investment but high returns.
In fact, we can treat to install distributed solar pv system as an investment behavior. Recently, government is greatly supporting distributed solar system, State subsidy (US$0.06/KWH) and local subsidy are lasting for 20 years, which extremely shrinks the time for investment return.

The investment return is 6~8 years in most of areas, China. The investment return is less than 5 years in some area where has higher local state subsidy. The lifespan of solar power system is more than 25 years, there are more than 10 years to get net earning.

3). Maintenance is very easy.
The home solar power system is automatic to start in sunrise and automatic to stop in sunset after completing to install. The old don’t have to make complicated operation, just need use soft cloth to clean dust on solar panel each month, to keep the power generation not to decrease.

4). Saving Electric Fee.
It has some thermal insulation effectiveness after installing solar system in rooftop. In Summer, the indoor temperature can reduce about 3-5 degree for those rooftop where have been installed solar pv system, the indoor temperature has been accommodated, likely to save electric fee of air conditioner.

4. PV Pension compare with other pensions.
According to the measured, the conservative estimate yield rate of PV pension is about 10%.

According to statistics, the inflation rate is about 3.5% in China, therefore, all of pension revenue should be higher that at least 3.5%, so that it can support the old. Therefore, let us compare many pension methods by revenue rate.

1). House for Pension.
Taking an “House for Pension” insurance in China as example, If an old whose age is 60 years pay one hundred and sixty thousand to buy this insurance, he just can get US$400 each month, annual yield rate is just 3.01%. In fact, “house for pension” has confronted dilemma in BeiJing, ShangHai, GuangZhou, WuHan since 2014. Li HongBing, deputy director general of BeiJing civil affairs bureau, frankly said “House for pension” has confronted dilemma, its reaction is less than expectation.

2). Buying Commercial Old-age Insurance.
Taking an insurance as example, the basic coverage is US$1,600, to buy for 10 years, need pay US$1,700 each year, it is US$17,000 for 10 years. The old whose age is 55-60 can be returned US$80 each year, from 60 age to lifetime can be returned US$320 each year, all of premium will be returned if passing away. If one old can live to 90 years, his total investment is US$17,000, he can get average US$285.7 each year, his yield rate is just 1.68% a year.

3) Buying Financing Product.

Bank Financial Products: The risk of breakeven financial product is took by bank, for clients, the risk is very low, usually, the revenue is less than 3%.
Non-guaranteed financial products, especially for those whose revenue is higher than 10%, clients need take high risk.

5. Case for PV Pension.

1). “PV Pension” has been verified by Europe and North America, it is stable and reliable.

In 2014, United Kingdom Energy Minister declared “Solar power definitely is an attractive financial investment suggestion, you will get a periodical stable income for 20 years, for those old whose age is 50-60, this is more better than old-age insurance. Every retiree should seriously consider whether solar power is suitable for him or her, because in some situation, he or she can get more higher investment return than old-age pension.

2). Recommendation from China’s Authoritative Media.

ZheJiang, China: Jiang HongLiang is a villager, he paid more than US$1,600 to install the first distributed home solar power system for his father as old-age in his village. He calculated: “ He installed 3KW solar system, deducted countryside subsidy, his total investment is US$2,900, power generation is 300KWH each month, he can get US$0.16/KWH from electric fee and subsidy, it is US$570 a year.” He said, the living standard is not high in village, to choose PV Pension is more reasonable, return on investment is about 20%, and the period of revenue can be reached up to 30 years, it is about 6 years to return investment. (People’s Daily in 17th, December, 2015).

FuJian, China: Mr Zheng, he and his brother are always out of the village for working, just his old mother whose age is more than 70 still stayed at home. Considering his mother’s livelihood, he and his brother gathered about more than US$14,000, to install a 10KW solar pv system in their home rooftop, recently, the old mother can get stable income about US$160 each month.

Henan, China: Mr Jia is a peasant, don’t have economic condition to pay endowment insurance, just rely on his only son who work in BenJing to send US$160 monthly as alimony for him and his wife to live. Afterwards, Mr Jia’s son learnt that it is easy to handle procedures for grid tie distributed solar power system, the revenue can be up to US$0.16/KWH if selling all of power electricity from solar to State Grid, he decided to invest more than US$11,500 to install a 8KW distributed home solar power system for his parents, power generation is about 160KWH, the revenue of selling power is US$160 each month.

HeBei, China: Recently, PV Pension for public welfare program has been started in Hei YaGou village, FuPing country, BaoDing City, HeBei Province, China. This program plans to install 50 sets of 150KW distributed solar power generation systems. According to the estimate, these solar stations could generate more than one hundred thousand kilowatt hour, it can brings more than US$16,000 each year. It can be distributed to the most poverty old in the village, each old can get about US$160 each year to solve their old-age problem.

Above estimation and revenue are taking in China as example, different Countries have different policy for solar power. ROI (return on investment) should be estimated according to each Country’s subsidy policy.

 

Bingsolar Power, 11th, March, 2018