simplified...

cost of 1kW of PV system is 1000 euro

cost of 5kW wind system is 10 000 euro

installation costs from 100 euro per kW up to 500 e per kW (depends on location, type of roof, ground conditions, cable lengths etc )

Assuming that cost of energy is 17 cents* per unit

- 5kW PV system can make annually energy worth 850euro (5MWh),
- 5kW wind turbine in good location can make annually energy worth 1400euro (8MWh)

**Cost of electricity from the grid in Nov 2014: 17 cents per kWh (unit ) - excluding standing charge and other extras... all above exclude of VAT.*

### That simple calculations show that **you have your PV system paid back in 8,8 years, and wind turbine back in 7 years**. In reality energy rate of 17 cents per unit will get much higher in coming years. In reality calculations are not that simple...

p.s big banks are investing millions of euro in big wind farms have those payback periods longer ! (up to 15 years !!!)

p.s. internal rate of return is describing investment better than payback period

if you want to understand this more deeply start reading on the left ... but do not go there before understanding whats below !

The terms “power” and “energy” are often inter-changed in everyday speech but their meanings are very different. Before going any further, I think it is important to understand this difference.

When thinking about a journey, it is clear to everyone that “distance” and “speed” are not the same. After a few moments’ thought, most people will agree that:

Distance (in miles) = Average Speed (in miles/hour) × Time_ofJourney (in hours).

In the world of electricity, “energy” is related to “power” in just the same way. So: Energy (in kWh) = Power (in kW) × Time_forWhichTheApplianceWasOn (in hours).

If a 2 kW heater (its power rating) were to be switched on for a period of 1 Hour (time), then 2 kWh (of energy) would be consumed. Similarly, if a PV installation were to generate electricity at a constant rate of 1 kW (power), and this situation were to be maintained for a period of 2 Hours (time), then 2 kWh (of energy) would have have been generated.

[In the latter example, the PV owner would most likely receive 2 units of “generation” FIT, and 1 unit of “export” FIT, regardless of how their PV-generated electricity had actually been used.]

In the same way that “Speed is the rate at which Distance is covered”, i.e. miles per hour, so “Power is the rate at which Energy is consumed or generated” i.e. kWh per hour, or just kW. In the material which follows about the measurement of mains electricity, it is often helpful to think of power as the rate at which energy flows. (from openenergymonitor.org )