March 30, 2018: It’s a Great Time For Solar

Earlier this week I was asked to write a brief (300 word) article about solar for today’s local paper. If you’re interested you can access the article here… But I can save you the trouble…. because this is what I wrote.

When I look around the Southern Highlands I see a lot of buildings that still don’t have solar panels on their roof. The question I want to ask the owners is, “What are you waiting for?” With recent increases in both electricity rates and Feed-in Tariffs (FIT is the amount you get paid for any excess solar power you send out to the grid) the financial benefit of going solar has never been better.

I buy my electricity from a small, ethical retailer called Energy Locals and I pay 22c/kWh for the power I import and I get 13c/kWh for the excess solar I export. At those prices, if you were to install a 5kW solar system costing $7500 you would get a return on your investment of between 12% and 21%. The more of your own solar power you can use during the day, the better your return on investment will be. But even if you export every bit of your solar power to the grid you will still make 12% on your investment, plus you’ll be adding to the market value of your property and doing something positive for the environment. You won’t get that from a bank!

If you’re the owner of a small to medium-sized business, the returns can be even better. If you’re a landlord, there are systems you can access through organisations like Matter or SunTenants that allow both you and your tenants to share the benefits of solar power.

So, if you’ve own a roof, it’s time to think about putting it to work for you by installing solar panels. And if you already have a solar system, it’s a good time to look at adding more.

Honestly, you’re crazy if you don’t have a solar system on your roof when you can get such a good return on your investment (ROI). And, since writing that piece earlier in the week, I’ve received another quote for a solar system for the house next to the Greeny Flat. Initially they told me $7,500 for a 5kW system but it turns out that was for the most expensive, top-of-the-line equipment. The price for good quality gear (i.e. Trina panels and an SMA inverter like we have on the Greeny Flat) is only $5,500 for a 5kW system.

At that price the ROI is even better than I quoted in the article. In our area a solar system will produce about 4kWh per day for each 1kW of installed solar. So a 5kW system should produce an average of 20kWh per day. That makes 7,300kWh/year. If you were to export every bit of that power to the grid and get 12c/kWh for it, you would receive a total of $867 per year which equates to a 16% return on a $5,500 investment. On the other hand, if you were able to use every kWh yourself (which many small businesses can do because they use power during the day) you would be avoiding paying 22c/kWh so you would be saving $1,606/yr which equals a 29% ROI.

With banks paying about 2% interest on a savings account and even the best companies on the ASX only paying dividends in the 5-7% range, you just can’t get the sort of ROI you can get from solar from anything but the most risky financial investment. And solar is not risky at all. It’s securely fastened to your own roof where you can keep an eye on it and it’s covered by long warranties plus your building insurance (as long as you inform your insurer that you have installed it).

Recent Happy Solar Customers

Jim and Jess beside their

Jim and Jess beside their new solar inverter

Jess and Jim of Bundanoon have recently had a 10kW solar PV system installed on their Western roof, and are happy to report that at most times of the day, the system is generating plenty of power to cover their household consumption needs and surplus export to the grid (earning them a feed-in tariff of 12.8c per kW/h via Energy Locals). Due to export limiting, some of this surplus will be wasted, especially during the warmer months, and so Jim plans to monitor their usage patterns over the next 12 months and decide whether battery storage might be required. Jess and Jim were very happy with the professionalism of the Nowra and Bowral-based installers, Simmark, and they reported that Matt Simms, in particular, was a great source of technical and practical advice.

Jim and Jess's solar panels.

Jim and Jess’s solar panels.

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