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Is a Solar System a Worthwhile Investment?

Many homeowners
say that they are not looking at a solar system as an investment. Our response to that is they definitely should do so.

If a solar system does not stack up as investment then why not put your money somewhere that does. However, an investment return need not be considered just in terms of dollars and cents, but in dollars and sense.

If you care about this planet and your future and that of your children living on this planet, you may wish to think in terms of solar as an investment in sustainability, in reduction of carbon emission,( CO2), less use of finite resources, fossil fuel etc.

So if money is not the issue in your case, you could maximise your use of solar power just to be a good citizen of this planet.

However, most of us live in a world where money for us is also a finite resource, so it makes sense to make sure that a solar power system is a good investment.

A Solar System as a Financial Investment

How well a solar system will stack up as an investment for a homeowner will  depend on how much electricity you use during the daytime. This aspect was irrelevant when the generous State Government Feed in Tariff of 44 cents per kW for electricity generated and fed into the grid was available. It is still payable for customers who installed a system before 1st January 2014. new installations do not receive any State Government Feed in Tariff. Some Electricity retailers however, pay a Feed in Tariff, which can be up to 8 cents per kW.

The standard regulated rate for electricity (Tariff 11) is currently just on 28 cents per kW cents - Doubled Up - including GST, so for every kW you generate and consume you will save 28 cents. A 5kW system with 6.5 kW of panels will produce on average around 27kW per day. So 27kW by 28 cents is $7.56 per day, or total $2,759.00 pa.

Note: Good quality inverters will usually cope well with more panels than the nominal size of the inverter, with the way that the rebate works it costs little more to have a 5kW inverter with 6.5kW of panels, which will give substantially increased electricity generation.


Those electricity users who will benefit most from a solar system are those who consume considerable amounts of electricity during the daytime. A good system of this size will currently cost around $7,000.00, depending on your location (You can get one for less than that, but not a good system, with Tier 1 panels and a good European inverter and good installation). If the householder used all the electricity generated, the system would pay for itself in a little over 2.5 years. However, it is unlikely that a householder would use that much electricity in the daytime.

On the other hand if the householder used half of the electricity generated and the other half is fed into the grid, the saving would be $4.86 per day or $1,773.90 pa. The payback period would be just under 4 years, so that is still a 25% pa return on the cost. Because it is effectively a tax free a taxpayer on the 30 cents in the dollar tax bracket would need to get a return on money invested of return 35% pa to equal it. So if you can find a better investment than that, go for it! But remember this, the effective return will be increasing each year as electricity cots increase.

For more information about the viability of a solar system for your business go here: Solar for Business

For business customers a solar system makes even more sense. A business can claim back the GST so the net cost is even less. They can also claim depreciation on the system, and they will usually use more of the electricity generated in the day time


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