Breaking even with solar panels
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I was wondering whether solar panels on a home was now viable from an economic perspective - at what point (if ever) does the system break even/start saving money (once set up costs etc have been taken into account)?
Awesome - thanks heaps.
It doesn't take into account lost interest though (or interest paid if you borrow the money).
eg if you paid $10,000.
If you had that money in a term deposit you would be getting $450 a year interest so add that to your costs each year to see how worthwhile it still is.
eg if you paid $10,000.
If you had that money in a term deposit you would be getting $450 a year interest so add that to your costs each year to see how worthwhile it still is.
Don't count on unviable subsidies you currently get- feed in tariff is higher than usage.
Labour government stupidity.
Labour government stupidity.
Are solar panels a good investment?
My wife and I live on Queensland's Sunshine Coast. We installed our solar panels in June 2011. The equipment included 13 panels (German made) producing 3.06kw and a Sunny Boy 3000 inverter. I kept a spreadsheet of the main headings from each power bill since then so I can easily keep track of the ongoing costs. As it turns out it has been a very interesting exercise. By the way, our household number is normally two adults with the four adult kids and other family members staying from time to time. So, on average, we are probably a 3 adult household.
A. Set up costs are as follows:
• Supply and install panels: $16170
• Plus fitting: $400
• Less government rebate: $4092
• Total cost $12478
B. Ongoing costs:
In simple terms, we have two arrangements. Firstly, we use electricity from the grid and pay Energex at their rate (which will continue to increase in the future). Secondly, we produce electricity from our solar panels and sell this to Energex at a fixed rate of 52 cents per kilowatt (which will not increase in the future). To me, these are two completely separate arrangements. We still get a bill for my electricity usage but I am credited with the electricity we produce. These are shown on the quarterly bill. If the balance is a credit, we can either leave the funds with Energex in case we have an unusually high usage bill sometime or we can ask them to send us a cheque. At this stage, our credit balance of $683 is still with Energex - but not for long.
Summary of past 12 Months' Bills (4 quarterly bills):
• Electricity supply (what we used): $1181.62
• Rebates (what our solar panels produced): $1684.28
• Resulting position (less GST, helicopter donation): $363.97 credit over the past year
C. Comparison of investment options
Now here's some boring mathematics to see if I did the right thing, financially speaking. The calculations are based on a 10 year period:
• We raised the funds ($12478) for the panels by redrawing on our home loan account. So, assuming home loans maintain an average of 7% over the next 10 years my loan will be around $24500 more - ouch!
• If I had come up with a spare $12478 (Lotto?) and invested it safely at 5%, I would have around $20300 after 10 years - a return of $7822. My super fund might be better.
• After 10 years my solar rebates at around $1700 per year will return me $17000. This is a good return. However, unlike the situation above, I cannot withdraw my initial outlay along with my investment return. The panels will still be on the roof but will they add any value to our home? The fact that we have solar panels might attract more interest if we were to sell but I doubt if the price of the home will be increased by their presence. (It's a bit like hoping the set of driving lights will increase the value of your 4WD).
Further considerations:
• The panels have a 10 year guarantee and the inverter has a 5 year guarantee. The panels should last well past 10 years - hopefully. Apparently inverters often need to be replaced after 5 or 6 years at a cost of around $2500. I'm not sure about maintenance of the panels but I have heard that they will need to be cleaned and checked by a qualified tradesperson - maybe every two years. This costs about $200.
Verdict:
• I'm of the opinion that my investment of $12478 would have been better left in our home loan or dropped into our super funds. As we have no intention of selling our home, we might never know for sure. I suppose there is the added fact that we are doing something for the environment.
My wife and I live on Queensland's Sunshine Coast. We installed our solar panels in June 2011. The equipment included 13 panels (German made) producing 3.06kw and a Sunny Boy 3000 inverter. I kept a spreadsheet of the main headings from each power bill since then so I can easily keep track of the ongoing costs. As it turns out it has been a very interesting exercise. By the way, our household number is normally two adults with the four adult kids and other family members staying from time to time. So, on average, we are probably a 3 adult household.
A. Set up costs are as follows:
• Supply and install panels: $16170
• Plus fitting: $400
• Less government rebate: $4092
• Total cost $12478
B. Ongoing costs:
In simple terms, we have two arrangements. Firstly, we use electricity from the grid and pay Energex at their rate (which will continue to increase in the future). Secondly, we produce electricity from our solar panels and sell this to Energex at a fixed rate of 52 cents per kilowatt (which will not increase in the future). To me, these are two completely separate arrangements. We still get a bill for my electricity usage but I am credited with the electricity we produce. These are shown on the quarterly bill. If the balance is a credit, we can either leave the funds with Energex in case we have an unusually high usage bill sometime or we can ask them to send us a cheque. At this stage, our credit balance of $683 is still with Energex - but not for long.
Summary of past 12 Months' Bills (4 quarterly bills):
• Electricity supply (what we used): $1181.62
• Rebates (what our solar panels produced): $1684.28
• Resulting position (less GST, helicopter donation): $363.97 credit over the past year
C. Comparison of investment options
Now here's some boring mathematics to see if I did the right thing, financially speaking. The calculations are based on a 10 year period:
• We raised the funds ($12478) for the panels by redrawing on our home loan account. So, assuming home loans maintain an average of 7% over the next 10 years my loan will be around $24500 more - ouch!
• If I had come up with a spare $12478 (Lotto?) and invested it safely at 5%, I would have around $20300 after 10 years - a return of $7822. My super fund might be better.
• After 10 years my solar rebates at around $1700 per year will return me $17000. This is a good return. However, unlike the situation above, I cannot withdraw my initial outlay along with my investment return. The panels will still be on the roof but will they add any value to our home? The fact that we have solar panels might attract more interest if we were to sell but I doubt if the price of the home will be increased by their presence. (It's a bit like hoping the set of driving lights will increase the value of your 4WD).
Further considerations:
• The panels have a 10 year guarantee and the inverter has a 5 year guarantee. The panels should last well past 10 years - hopefully. Apparently inverters often need to be replaced after 5 or 6 years at a cost of around $2500. I'm not sure about maintenance of the panels but I have heard that they will need to be cleaned and checked by a qualified tradesperson - maybe every two years. This costs about $200.
Verdict:
• I'm of the opinion that my investment of $12478 would have been better left in our home loan or dropped into our super funds. As we have no intention of selling our home, we might never know for sure. I suppose there is the added fact that we are doing something for the environment.
Hahaha and I bet you fall asleep at night WRT knowing that you have done the right thing !
A very good analysis and summary of the pros and cons of installing solar panels.
There is a lot of food for thought there.
Stewie
A very good analysis and summary of the pros and cons of installing solar panels.
There is a lot of food for thought there.
Stewie
Well done WRT! A fantastic analysis and weighing of pros and cons. Without a doubt this puts my mind at ease that there is no rush to "ride the wave" of solar panels.
With the lack of rebates and incentives, hopefully the cost of panels drop and quality improve so that the whole set up becomes at least 50% better off financially.
As for a green thumb/feel good perspective, a neutral cost benefit is good enough.
With the lack of rebates and incentives, hopefully the cost of panels drop and quality improve so that the whole set up becomes at least 50% better off financially.
As for a green thumb/feel good perspective, a neutral cost benefit is good enough.
incentives and rebates vary from state to state.
The costs are dropping and the solar panel efficiency is increasing all the time Adam.
There are still significant up front costs though.
Stewie
There are still significant up front costs though.
Stewie
Ive had my 3.04Kw system installed since April 2011 for a total outlay of $10k.
Since then Ive had no electricity bills to pay with my excess credits covering all my gas bills and providing me with around $1200 cash / year income. I wish now I could have gone for a slightly larger system (around 20 panels) but it was out of my financial reach.
I think anyone contemplating installing a system now may have missed the bus with lower FIT's
Since then Ive had no electricity bills to pay with my excess credits covering all my gas bills and providing me with around $1200 cash / year income. I wish now I could have gone for a slightly larger system (around 20 panels) but it was out of my financial reach.
I think anyone contemplating installing a system now may have missed the bus with lower FIT's
What sort of panels and what brand inverter Uncle Arfur ? They seem to vary enormously in quality and price.
Stewie
Stewie
Greetings;
I have a 3 KW system installed and it cost me about $6990.00 at the time. my estimated bills are suspose to be around the $250 - $350 per quater IN CREDIT. last bill i got was amended bill and it was $986.99 IN CREDIT.
Anyone asks me Solar was the best investment i even brought besides my house. However i am getting the $0.50 government feed in tariff that makes a big difference..
My Questions is:
What feed in Tariff are you going to get ?
How much power do you go though during the day ? (6am to 6pm)
How much power do you go though during the night ? (6pm to 6am)
I have a 3 KW system installed and it cost me about $6990.00 at the time. my estimated bills are suspose to be around the $250 - $350 per quater IN CREDIT. last bill i got was amended bill and it was $986.99 IN CREDIT.
Anyone asks me Solar was the best investment i even brought besides my house. However i am getting the $0.50 government feed in tariff that makes a big difference..
My Questions is:
What feed in Tariff are you going to get ?
How much power do you go though during the day ? (6am to 6pm)
How much power do you go though during the night ? (6pm to 6am)
Adam , that is great but as I asked UA what sort of panels and which inverter ? I think it makes a big difference to the setup costs comparing the cheap and nasty to the better quality.
Stewie
Stewie
What sort of panels and what brand inverter Uncle Arfur ? They seem to vary enormously in quality and price.
Stewie
Stewie
16 x 190w Suntech panels and a SMA 3000Tl inverter, including the $430+ for the meter changover.
Adam , that is great but as I asked UA what sort of panels and which inverter ? I think it makes a big difference to the setup costs comparing the cheap and nasty to the better quality.
Stewie
Stewie
12 * 250 watt panels - German panels
3kw - Delta (Effekta) inverter - German Inverter
Try and not get the smaller panels, the smaller the panels you get the more you will need to make the KWs you need. for example
4 * 250 watt panels makes 1kw.
5.26 * 190 watt panels makes 1kw.
Also keep in mind there are different types of panels.
You have the following;
*Poly
*Mono (This is what i have)
http://www.enviroshop.com.au/info/36 - Compares Poly vs Mono
http://www.solarquotes.com.au/panels/photovoltaic/ - Compares Poly vs Mono
Also please read the topic
viewtopic.php?f=35&t=63539
Good info guys. Thanks.
Stewie
Stewie
Also most panels come with a guarantee that after 20 years they will still be 80% efficient. So you will need to calculate the system producing less electricity as time goes on.
I was wondering whether solar panels on a home was now viable from an economic perspective - at what point (if ever) does the system break even/start saving money (once set up costs etc have been taken into account)?
If you read the NEWS section of this (particularly: http://au.news.yahoo.com/thewest/nation ... -increase/), In general it is obviously not reliable until you use a 5Kw kit if you have a house all electrical , or if you use gas around 2.5Kw but only in terms of what you don't then use not feed in.
http://sidewinder11sucommanderxer.podse ... e15kw.html
viability is only as good as feed in tariff offered . Just alike your electricity bill the tariff can change or be scrapped.
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