GOING SOLAR - WHAT IS THE PAYBACK?
What's the return?.... One of the first questions that you ask when considering a grid-tie solar system.
Solar energy is a source that will supply electricity, long term, with NO continuous financial input, NO environmental impact & it is something that will not effect your lifestyle - it is an exciting investment!
It is possible to value an investment in grid-tie solar in a way that makes it comparable to other types of investments.
YOU CAN ACHIEVE COMPELLING INVESTMENT RETURNS RIGHT NOW!
A grid-tie solar system produces a return on a number of levels: the obvious is the immediate saving of reduced electricity bills. Then there is the capital value increase of your property and of course the cumulative effect of increased return with the inflation of energy costs.
Any extra power you make above what you use is bought back by your electricity provider at these rates, (rates are correct on 28th May 2015)
|Retailer||Rate||Max. System Size|
|Contact||8¢ / kWh + GST||Up to 10kW|
|Mercury Energy||8¢ / kWh (Auckland areas that are serviced by Vector Lines Co.)||-|
|Trust Power||7¢ / kWh + GST||Up to 10kW|
|Meridian (after the 1st of April 2013)||7¢ / kWh + GST in summer (1 October to 30 April), &
10¢ / kWh + GST in winter (1 May to 30 September)
|Up to 10kW|
|Genesis||4 - 7¢ / kWh (location dependent)|
DIRECT SAVINGS - REDUCED ELECTRICITY BILLSDuring the day, when your grid tie system is creating power, you use free power, saving what you would have normally paid to your power company and reducing or eliminating, (depending on the size of your system), your electricity bill.
The amount of electricity produced by any size of solar system for any region can be accurately worked out before you purchase and remains reliable throughout the system’s working life.
This means you can make an informed choice about system sizing and financial investment when considering a solar power system.
To give you an idea - for a flush mounted 3kW grid-tie solar system currently costs approx. $9250 and will produce, with north-east to north-west facing panels, approx. 4,256 kWh of electricity each year in Auckland, (more can be expected from areas such as Nelson, Whakatane, Gisborne, Blenheim & Tekapo).
At current electricity prices of $0.28c per kWh this means direct electricity savings of $860+ per year.
Every year the grid-tie system’s electricity output remains reasonably constant so rising electricity prices translates to increased savings.
If electricity prices rise at the rate of inflation of 3.5% per annum, savings will be over $1,415.32 per annum by year 5 and over $1,680.94 per annum by year 10. On this basis the initial cost of your grid-tie solar system will be recovered in under 9 years, the system’s life is well in excess of 25 years.
As we all know, it is likely that electricity prices will increase at a much faster rate than this, some commentators are predicting prices will double in the next 5 years. A grid-tie system is protection from these rising prices.
REAL RETURN ON INVESTMENT
At current power prices & using the example of the 3kW solar power system we talked about above - the system would produce an annual after tax return of 9.3% in electricity savings in the first year alone.
When both the appraisal value of the solar system and the direct electricity savings are considered, the payback is almost immediate.