The question of ‘Return on Investment’ or R.O.I. for solar power systems often comes up from Adelaide residents considering installing a solar panels system. How long will it take to recoup your investment and what kind of ‘return’ on that investment is possible. The answer depends on many factors and understanding this can be helpful in assessing solar for your home:
In South Australia the current feed-in-tariff pays around 26 cents per Kwh . Note here – the16c/kwh S.A. Government component of the feed in tariff is only offered until 30 September 2013. ![solar power installation in Adelaide]()
Whilst the feed in tariff is roughly the same as the price you pay for electricity it does not make a huge difference whether your home consumes most of the power your solar system produces of you ‘export’ or send most of the solar energy back onto the electricity grid, where you get paid for it at the ‘feed in tariff’ rate. Once the feed in tariff decreases (after 30 September 2016) you will only receive the ‘minimum retailer payment’ , currently 9.8c/kwh increasing to 11.2c/kWh for the period 1 July 2013 to 30 June 2014 – after this date is still to be decided. When the feed in tariff is reduced significantly it becomes important to try and use the maximum amount of solar power your system produces in your home as you are being payed less for it (if you send it back to the grid) than you pay for electricity. The bottom line here is that many factors, some of which are listed below, will impact and determine your solar systems ‘r.o.i':
- feed in tariff rate changes (both Government and retailer)
- the percentage of the solar electricity that your system produces that is either ‘fed back’ to the electricity grid or used in your home
- the price you pay for electricity now and into the future
- the longevity of your system
- any maintenance or parts replacement costs ( a solar inverter needs replacing etc)
- will any solar warranty claims be honoured in 5,10 or 20 years
So it is not quite as simple as looking at today’s available feed tariff and how much power you will be using or sending back to the grid from your newly installed solar system.![Adelaide solar power return on investment article]()
Think also about the quality of the system and its likely lifespan. If for example, the electrical output from a very low cost solar panel degrades significantly over time, then the ‘upfront saving’ from buying a lower quality panel is lost in the long term. Ensuring correct installation so as to maximise the output of the system can make a huge impact over 20 – 30 years operation. One thing is (almost) inevitable – that is that electricity prices in Adelaide will continue to increase long term. This in itself effectively increases the solar systems ‘r.o.i. ! Solar power users tend to become more conscious of the power they use in their homes and this in itself often reduces power bills!