Financial Returns
Do On Grid Solar Systems Make Financial Sense?
Powersmart grid connected solar systems will reduce your electricity expense and add value to your home or business. Measuring the financial value of both of these qualities is relatively straightforward, and the methods and results are widely supported. The Government provides several rebates and incentives which make the investment case very simple.
Reduced Electricity Expenses
A well designed solar system will last in excess of 25 years with little maintenance. Each year the system will produce a predictable amount of electricity. Since sunlight is the only input needed you will never have to pay for the electricity produced by your solar system.
Electricity prices are already high and inflating rapidly. This year, your solar system may save you $500 in electricity bills. In 5 years it may be $750. In 15 years it may well be $1500. The various feed in tariffs can provide a high fixed income for many years.
Added Value to Your Home
Grid connected solar systems add value to homes and businesses in direct relation to the amount of money they save in electricity bills each year. Studies show that every $1 saved in electricity bills adds $15 dollars in capital value. If your solar system saves $500 in electricity bills, it adds $7,500 to the value of the building. Several other studies show that buildings with solar are both more desirable and appreciate faster on the real estate market.
The above qualities make grid connected solar an excellent financial investment.
Subsidies
The Australian Government currently provides a capital rebate which Powersmart offers as a point of sale discount. Individual states also have varying feed in tariffs which increase the price you are paid for exported electricity. These are summarised below.
Commercial Tax Implications
| State |
Max Size |
Rate Paid (per kWh) |
Program Duration |
Model |
|---|---|---|---|---|
| VIC | 5 kW | Minimum 25c | Until 2016 | Net |
|
ACT |
Up to 200 kW | 1 to 1 rate | 20 years | Gross |
| NSW | N/A | 20c | As per contract w/ retailer | Net |
| QLD | 5 kW | 44c | Until 2028 | Net |
| TAS | tbc | 20c | tbc | Net |
Commercial solar investors get the benefits of recouping GST and depreciating the system value over a period of years. These two benefits have a significant impact on the value of the investment returns.
Financial Returns - Off Grid Solar Systems
On or Off the Grid?
Deciding whether to go on or off the grid can be a complex decision. It is important to note that there are few technical limitations on your energy use when connected to the national grid. You are free to choose a system that best suits your home and budget. Grid connected solar power systems can eliminate your electricity bills and add value to your home without placing any constraints on your lifestyle.
Off grid solar power systems must be designed with your home's power demands in mind, and they must be able to meet those demands at times when the sun is not shining. In some cases it may make better financial sense to pay for grid connection and Powersmart's professionals can help you with the information needed to make an informed decision. In cases where grid connection is not possible or prohibitively expensive, off grid solar power systems are an excellent financial choice to provide clean reliable electricity for your home.
Solar power systems are financially effective now in remote areas and especially in conjunction with existing diesel generators. The rising price of diesel and oil for maintenance means that while the financial returns are excellent immediately, and they are slated to get much better in the future.