An influx of miners and generally of people interested in cryptocurrency in years prior to 2022 has driven values of BTC and ETH to new all-time highs. It was again profitable to mine them.
The profitability of a mining operation depends on the fragile ratio of revenue to the cost of electricity burned during the mining process. Having access to electricity that you don’t need to pay 10-20 cents per kWh for, can make your mining operation even more profitable.
Nowadays, ASIC miners no longer have as much of an edge against GPU mining as it used to be years ago, so let’s have a look at profitability of GPU (graphic-card-based) mining.
CLICK HERE FOR GPU PROFITABILITY TABLE
The other issue that you may need to deal with is the fact that a lot of people are drawn to crypto mining, which completely cleared all IT shops off of their stock of top of the range GPU adapters. You’ll need to shop around. Amazon Germany is one place where you can still get some GPUs, albeit for inflated prices.
AMD Radeon RX 5700 is a decent enough card, which you can still obtain for below EUR 600.
Let’s do a quick calculation of a profitability of a mining rig with 6 of those cards:
1. Initial Investment
You will needs at least EUR 600 to put together a mining rig, which doesn’t include the GPUs. That’s your motherboard, processor, RAMs, SSD and your open rig frame.
6 cards (AMD Radeon RX 5700) will set you back around EUR 600 a piece, that’s EUR 3,600 for 6 cards.
Total investment = EUR 4,200
2. Mining Profitatbility
A single AMD Radeon RX 5700 card will make you EUR 3.44 every 24 hours after discounting EUR 0.20 per kWh of your standard electricity unit rate, taking the consumption of the card into consideration – 130W.
6 of these cards will therefore make you a total of EUR 20.64 every 24 hours, into your pocket, based on current ETH price (EUR 1,077 at the end of January 2021).
Total income = EUR 20.64 per 24h
3. Return of Investment
So how long will it take you to break even, NOT taking into consideration the fluctuation of the market price of ETH, which can swing up or down quite rapidly.
Total investment of EUR 4,200 / daily profit of EUR 20.64 = ROI of 204 days.
After 204 days, your investment is clear, you are back on zero and you start making money.
4. Revenue Going Forward
Once your initial investment is settled, you will make:
365 days x EUR 20.64 = EUR 7,500+ a year of passive income based on the current ETH price (which will move in year – but how?).
Total annual passive income from a single 6-GPU rig = EUR 7,500
This presumes that you pay EUR 0.20 for every kWh burned by your rig.
Also note that it is presumed that due to ever-increasing difficulty levels of ETH mining, ETH is likely to only be mineable until roughly the end of 2022, at which stage, the revenue stream might dry up, if there’s no replacement coin for GPU mining. That being said, having access to “free” electricity may make it possible to mine with profit beyond that projected date. Please do your own research and take your actual circumstances into account when deciding over your investment.
5. Cost of Electricity
If you somehow could pull of having all of the electricity “for free”, this would, of course, improve the annual income.
6 cards, 130W each, running 24 hours a day for a full year:
6 x 130W x 8,760 (hours in a year) = 6,832.8 kWh burnt by the rig in a year
Cost of 1 kWh is, say, 20 cents, hence the rig will burn:
6,832.8 kWh x EUR 0.20 = EUR 1,367
Cost of electricity burnt by the rig in a full year (24×7) = EUR 1,367
6. Solar Power with Battery Storage
To add the EUR 1,367 in electricity cost to your revenue, you need to generate your own electricity.
Let’s do a quick calculation of what you’d need to set up in order to have an off-grid rig, powered completely by solar power.
6.a. Battery Storage
In order to for the mining rig to be able to run a full day off the grid, we need to know the power consumption of the rig.
6 cards, 130W each = 780W
The computer itself will sure add up to 100W to that.
Conservative value = 1000W
You want to be able to run it 24 hours a day, so let’s calculate it for 1 day:
1000W x 24 hours = 24,000 Wh = 24kWh battery capacity
So this is how much battery storage you need to last one day off grid.
If you’re using lead-acid batteries, you can only ever discharge them to 50% of their capacity, so you need to double them up, but with lithium batteries, you can utilise virtually 100% of their capacity. Let’s continue with lithium batteries in mind.
6.b. Solar Panels
Since we have only calculated the batteries to last for 24 hours (which will not really work in real world), you need to be able to fully recharge the batteries in a day.
Now we need to know how many hours of useful light your solar panels will get in order to be able to calculate the Wattage you will need in your solar panels to be able to fully charge your batteries during that time.
Let’s calculate with 8 hours in winter and 16 hours in summer. Say we want to stay self-sufficient even during winter times, so we will only calculate with 8 useful hours a day.
24kWh / 8 hours = 3 kW of solar power.
1 sq. m of silicon solar panels will generate ~150W of power in a clear sunny situation, so we would need:
3,000W / 150W/m.sq = 20 m.sq of solar panels.
6.c. Cost of Solar system
Where I am (Ireland), system installs cost roughly EUR 2,000 per kW plus VAT @13.5% without battery storage.
So we can count with EUR 6,000 for installation of the solar system if you don’t do it yourself.
6.d. Cost of Battery Storage
24kWh of battery storage will also cost you.
AGM Deep Cycle Batteries cost EUR 549,30 + VAT each with capacity of 230Ah.
These are 12V batteries so their capacity in kWh is:
230Ah x 12V = 2.76kWh per battery.
We are looking for 24kWh of total capacity to make it through the 24 hours, so let’s count with 10 batteries which brings the total capacity to 27.6 kWh.
10 x EUR 549,30 = EUR 5,493 for battery storage.
6.e. Are Batteries Profitable?
So the battery power will cost EUR 5.5k + VAT and they will last you a maximum of 10 years. Does it make financial sense then?
This whole solar system is design to offset an annual cost of electricity of EUR 1,367, so you will break even after 4 years, after which, you may save EUR 1,367 every year for 6 more years (before the batteries soil the bed) for electricity consumed by your mining rig, should your mining operation be viable for such a long time (which it most likely won’t be).
Whether this makes sense to do is up to your own judgement, but in theory, with a solar system with batteries, you will be EUR 8,200 in black numbers after 10 years when compared to running the same mining rig from the mains power @ EUR 0.20 per unit.
6.f. Bottom Line for Battery Storage
- Extra battery investment
EUR 5,493 - ROI
4 years - Total saved in 10 years
EUR 8,200
7. Optimisation for Cost-to-Benefit of Solar PV
It is becoming obvious that we need to optimise our design and cut back on initial cost. The main reason is that ETH will only be mineable for some 2 more years, so let’s not calculate with a 10-year ROI lookout.
Batteries will break even after 4 years, which is twice as long as our mining operation. Let’s drop the batteries.
Dropping of batteries has the following effects:
- No more EUR 5,493 needed for batteries
- We will only get the benefit of solar power when the panels produce enough electricity to power the rig
- We need to have a solution for seamless switching to mains power when solar power dies off in the late afternoon
- As opposed to an off-grid mining solution, we may be better off utilising a standard solar approach of letting the house utilise the generated power. After all, the cost saving is the same, no matter if it’s the mining rig consuming the solar gain, or your washing machine.
- No matter how powerful our solar array is, it will always reduce cost of electricity by the amount it produces. This means that we no longer need 3 kW / 20m2 / EUR 6k worth of panels – we will just do as much as we can.
- In the light of an inherently time-limited mining operation, any benefits of the solar system will be passed onto our everyday life in the house when the mining operation ceases.
I hope this quick exercise (evening journey) of mine is of some benefit to whoever is looking for a solar solution to cover for specific power needs.
See you next time.