Grid, solar or generator: cost per kilowatt-hour compared

Three prices for the same kilowatt-hour

Each source gets collapsed to a per-kilowatt-hour figure by the structure of how it is paid for. Grid power arrives already in the unit — its tariff is a cost per kilowatt-hour by definition. Solar is bought as a lump: the installed cost is spread in a straight line over the years you choose to amortize it and over the energy the system is expected to make each of those years. The generator is bought at the pump: the litres it burns to make one kilowatt-hour, times the price of a litre. Three payment shapes, one comparable number each.

The verdict is part of the arithmetic, not left to the reader. The engine takes the cheaper of the two alternatives, forms its gap to the grid figure, and scales that gap by your monthly consumption into a monthly saving — and the pack declares warnings that state, in words, which alternative won the comparison. The ordering of the three per-kilowatt-hour figures is the finding; the monthly figure is only its size in your household.

Each proxy is honest about being a proxy. The solar figure is straight-line: no panel degradation, no financing cost, no maintenance, no question of whether the household can use the energy when the sun makes it. The generator figure is fuel-only: no engine wear, oil or replacement fund. The grid figure is the bare tariff, without the fixed charge the bill pages in this cluster decompose. All three lean the same direction — toward flattering the alternatives’ steady-state economics — which is exactly why this is a screening verdict to take into a serious quote, not out of one.

Every price in the relation is yours to supply, because every one of them is local: the tariff comes off your bill, the fuel price off your pump, the yield off your roof’s sun, the amortization off your own horizon. And the pack declares a reverse workflow that turns the comparison into a negotiation instrument: fix the advantage over grid you would need, and the engine solves for the solar installed cost at which the comparison delivers it — the figure a quote has to come in under before the verdict changes.

When this calculation is used

• Screening whether rooftop solar or a generator deserves a serious quote at all, before anyone visits the roof or the showroom.
• Reading a received solar quote as a cost per kilowatt-hour against the tariff it claims to beat, on your consumption rather than the installer’s example.
• Pricing generator dependence where the grid is unreliable or absent, with the fuel burn and pump price of your own machine and market.
• Solving backwards — the declared reverse workflow — for the installed cost a solar system must beat before its advantage over grid reaches the margin you need.

Worked example

Run the pack’s anchor comparison: a household consuming three hundred and fifty kilowatt-hours a month on a grid tariff of eighteen hundredths, weighing a solar system installed for six thousand and amortized over twenty years with an expected yield of eight thousand and thirty kilowatt-hours a year, against a generator burning thirty-five hundredths of a litre per kilowatt-hour with fuel at one and a fifth per litre.

The engine returns each source’s cost per kilowatt-hour, the gap between grid and the cheapest alternative, and that gap scaled to a monthly saving — with a declared warning naming, in words, which alternative won. Read the three per-unit figures and their ordering before the money: the ordering is the verdict, the monthly figure only its size on your bill.

Then run the declared reverse: hold the tariff, the yield, the horizon and the generator’s figures, set the advantage over grid you would need, and let the engine find the installed cost at which the comparison delivers it. That number — what the system would have to cost — is worth more in a negotiation than any single quote’s verdict.

What each input represents

Assumptions and limits

• The solar figure is a straight-line proxy: no degradation, financing, maintenance or question of self-consumption timing is modelled, so it flatters real solar economics.
• The generator figure is fuel-only — engine wear, oil, servicing and eventual replacement would all raise the true per-kilowatt-hour cost of generated power.
• The grid figure is the bare tariff, without the fixed charges and levies the bill pages in this cluster decompose; the connection’s standing cost is outside this comparison.
• Every kilowatt-hour is treated as interchangeable across sources, ignoring when each is available — solar makes energy on its own schedule, and matching it to consumption is a storage question this relation does not ask.

What the guards protect against

• Monthly consumption must be positive, and the pack ships the zero-consumption refusal as a declared test vector: with nothing consumed there is nothing to scale a saving onto, and the comparison would be an answer to no household.
• The three solar inputs each carry their own declared guard requiring a positive value, because a zero amortization period or a zero yield would divide the installed cost by nothing, and a free system is an entry error rather than a bargain.
• The grid tariff, the generator’s fuel burn and the fuel price are likewise each guarded positive by declared domain guards — a comparison against a free incumbent or free fuel is a modelling slip, and the engine refuses it rather than crowning a winner from it.

Provenance

Levelized cost comparison: grid = tariff; solar = installed cost ÷ (years × annual yield); generator = fuel per kWh × fuel price

Each source is reduced to a cost per kilowatt-hour — the tariff directly, the solar installed cost amortized straight-line over years and annual yield, the generator’s fuel burn times fuel price — then the cheaper alternative is taken by a declared minimum, its gap to grid formed, and the gap scaled by monthly consumption; declared warnings name the winning alternative, and the declared reverse workflow solves for the solar installed cost that produces a target gap.

A screening comparison for deciding what deserves a real quote — not financial advice and not a system design, and the proxies flatter the alternatives by construction. All displayed figures are computed at load by the engine of a signed pack release verified over its exact bytes before parsing; the citation of record lives in that pack, and the page reports its mounted release’s verification state.