14 June 2013

Should we get solar power by 30 June 2013?

| FarrerGirl
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Hi Canberra,

I have a basic understanding of the changes occurring to the solar power tariff system in the ACT on 1 July 2013, however it would be good to get some advice. Is it worth jumping in now and buying a 4kW system (approx $7000), or should we wait? We have until 17 June to decide..

Thanks in advance.

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AlexanderWatson3:36 pm 08 Jul 13

Masquara said :

Speaking of solar power – what happened to that “coldest house in Canberra” competition? Has a winner been announced?

Finalists for Coldest House in Canberra have just been announced… Check them out and vote online at http://alexanderwatson.com.au/newsite/coldest-house-in-canberra-finalists/

milkman said :

shauno said :

I’ve got a 6KW system and I think what this will do is encourage more people to go off the grid entirely we just need the battery prices to come down a bit.

Has any one found out why power prices in the ACT are so cheap anyway? Or should I say less expensive then every other state or territory. Queanbeyan has to pay 32c kw/hr we pay 19c or whatever it is.

Queanbeyan pays NSW prices, which includes costs of infrastructure to remote parts of the state. Canberra doesn’t, and so enjoys some of the cheapest power in the country.

Don’t bank on our “cheap” Actew supplied electricity being around forever.

sentinel said :

Yes, probably worth doing.
Until the end of June ACTEW provides a gross feed in tariff, where they “buy” all the electricity you generate at a 1:1 rate, regardless of your usage. The rate would be around 17.9 cents per kwh

After 30th June, the scheme changes to a “net” feed in tariff, where ACTEW only buy the power in excess of your usage, and pay you only 7.5c per kwh for this amount.
So under the new scheme, the amount of solar power you generate offsets your usage, so the effective rate is still around 17.9 cents per kwh, up to the point where you generate more power than you use, power generated in excess of this you are a paid only 7.5c per kwh

So what it comes down to is this. If you are going to put on a small solar system, say 2-5 Kw, the amount of power you generate will typically be less than you usage, so the financial benefit will be similar under either scheme. On this basis there doesn’t seem to be much benefit in getting a system before the 30th of June.

If you are going to put in a larger system, say 8kw or larger, where you will generate more power than your usage, then there is a big benefit in getting in before the 30th of June.

As a rule of thumb, a properly sited ( north or northwest facing, non shaded system ) in Canberra will generate around 4 kwh per kw of installed capacity ( annual average ).

So a 5kw system will generate 20kwh per day – compare this with daily your electricity usage ( from your bill ) and see how this compares to your usage.

Under the current (pre June 30th scheme) in simple terms the typical payback period for a system is around 8 years, this equates to a potential 12.5% ROI. That’s a pretty good potential return for a safe investment, provided of course that you remain in the house for that period. The actual number may be less, but it’s still good compared to 3-5% in the bank.

Just make sure that any undertakings that Actew (or their associated entities give you) will be honoured in assignment.
I would be very surprised if Actew as we know it now will exist after the next 12 months.

sentinel said :

After 30th June, the scheme changes to a “net” feed in tariff, where ACTEW only buy the power in excess of your usage, and pay you only 7.5c per kwh for this amount.
So under the new scheme, the amount of solar power you generate offsets your usage, so the effective rate is still around 17.9 cents per kwh, up to the point where you generate more power than you use, power generated in excess of this you are a paid only 7.5c per kwh

not really, the ‘net usage’ aspect only offsets 1:1 while the system is generating and the exported will only offset against the dollar value, not the kw total amount as before.

example;

over 24hrs a 5kw system generates 20kw, house consumes 18kw

during daytime – 20kw generated, 3kw consumed = 17kw x 7.5c = 127.5c bill credit
during nighttime – 0kw generated, 15kw consumed = 15kw x 18c = 270c bill charge

so 270c – 127.5c = 142.5c bill, which otherwise would’ve been 324c without solar

the only time you’re effectively paid 18c is when your system is generating, hence the actew advice to time delay your appliances to midday.

In the example that’s still $800 per year off the bill but now for a $7000 5kw system it will take 12 years ($12,700) just to break even.

since most don’t use power in the middle of the day the new ratio is closer to 2:1, if you have a pool or some other big power daytime consumer, like the month long canberra summer when you turn on the aircon and don’t use heaters at night, that ratio can close.

Yes, probably worth doing.
Until the end of June ACTEW provides a gross feed in tariff, where they “buy” all the electricity you generate at a 1:1 rate, regardless of your usage. The rate would be around 17.9 cents per kwh

After 30th June, the scheme changes to a “net” feed in tariff, where ACTEW only buy the power in excess of your usage, and pay you only 7.5c per kwh for this amount.
So under the new scheme, the amount of solar power you generate offsets your usage, so the effective rate is still around 17.9 cents per kwh, up to the point where you generate more power than you use, power generated in excess of this you are a paid only 7.5c per kwh

So what it comes down to is this. If you are going to put on a small solar system, say 2-5 Kw, the amount of power you generate will typically be less than you usage, so the financial benefit will be similar under either scheme. On this basis there doesn’t seem to be much benefit in getting a system before the 30th of June.

If you are going to put in a larger system, say 8kw or larger, where you will generate more power than your usage, then there is a big benefit in getting in before the 30th of June.

As a rule of thumb, a properly sited ( north or northwest facing, non shaded system ) in Canberra will generate around 4 kwh per kw of installed capacity ( annual average ).

So a 5kw system will generate 20kwh per day – compare this with daily your electricity usage ( from your bill ) and see how this compares to your usage.

Under the current (pre June 30th scheme) in simple terms the typical payback period for a system is around 8 years, this equates to a potential 12.5% ROI. That’s a pretty good potential return for a safe investment, provided of course that you remain in the house for that period. The actual number may be less, but it’s still good compared to 3-5% in the bank.

Qbngeek – solar PV modules come with a warranty that guarantees >80% of rated output under standard test conditions after 20 or 25 years. If you buy from a reputable PV company, the solar PV modules should still be working fine after two decades in the sun. I’ve heard from a reliable source that there is some solar PV in the NT that has been in the sun for more than 30 years and it is still producing useful output. It is the inverter that can fail and need replacement eventually.
When you factor in the forecast electricity price increases for the ACT, purchasing PV before 30 June is a wise investment, if you have an unshaded, north facing roof.

drewbytes said :

The feed in tariff isn’t much chop now, but the systems have reduced in price considerably. The systems appear to be half the price of what I paid a couple of years ago, but I’m getting 42.5c per Kw which in my case means it’s generating about $3500 in solar credits a year, or about $55,000 over it’s lifespan after paying for itself.

So doing a little maths indicates you are counting on at least a 15 year lifespan. I have researched solar panels extensively as I plan to go completely of the power grid in the next few years and I can tell you that if you think that it generate anywhere near as much power at 15 years as it does now then you are dreaming. From what I have read and the people I have spoken to you should only account getting 50% of the original power generation at about 15 years. My intention is to gradually replace the panels between 10-15 years (5 panels per year)and then do the same starting at 10 years later.

Of course, my situation will be different as I will be relying on the panels to provide most my power needs (I also have a small windmill/turbine) so I don’t need to run the backup generator.

The real question is this:

“Should I sign up to an unsustainable ACT Government scheme that gets other people to subsidise high wealth/income people me, in the name of the pseudo science that is climate change?”

Comic_and_Gamer_Nerd12:42 pm 16 Jun 13

gazket said :

why not get solar now. I still have a little savings left I could throw towards a larger electricity bill. One of the most stupid government policy yet.

It’s up there with lets build another Arboretum that cost $70m a year to run.

Got panels put on a couple years back. Have not paid a electric bill since.
This makes me happy. It also warms my heart that despicable excuses for human beings like gazket get so outraged whenever its mentioned.

shauno said :

I’ve got a 6KW system and I think what this will do is encourage more people to go off the grid entirely we just need the battery prices to come down a bit.

Has any one found out why power prices in the ACT are so cheap anyway? Or should I say less expensive then every other state or territory. Queanbeyan has to pay 32c kw/hr we pay 19c or whatever it is.

Queanbeyan pays NSW prices, which includes costs of infrastructure to remote parts of the state. Canberra doesn’t, and so enjoys some of the cheapest power in the country.

why not get solar now. I still have a little savings left I could throw towards a larger electricity bill. One of the most stupid government policy yet.

It’s up there with lets build another Arboretum that cost $70m a year to run.

I’ve got a 6KW system and I think what this will do is encourage more people to go off the grid entirely we just need the battery prices to come down a bit.

Has any one found out why power prices in the ACT are so cheap anyway? Or should I say less expensive then every other state or territory. Queanbeyan has to pay 32c kw/hr we pay 19c or whatever it is.

Will the change to feed in price cause some people to be tempted to install unapproved systems that simply turn the older style meter backwards when generation exceeds demand on that property?

The feed in tariff isn’t much chop now, but the systems have reduced in price considerably. The systems appear to be half the price of what I paid a couple of years ago, but I’m getting 42.5c per Kw which in my case means it’s generating about $3500 in solar credits a year, or about $55,000 over it’s lifespan after paying for itself.

switch said :

wildturkeycanoe said :

Bank = $7k deposit @5%, return after 15 years = $14796. Didn’t have to lift a finger.
I’d feel a bit smug with this.

No argument, but where can you get 5% atm?

I currently get 5.15% on the account I use to set aside money each week to cover a casual worker in my household for sick leave, annual leave and public holidays. Admittedly, the base rate is 0.75%, but if I deposit at least $200 a month and make no more than one withdrawal a month, I get a bonus 4.4%. I’m sure I could get better if I shopped around and put some effort into managing the money, but I’m lazy and this is easy.

switch said :

wildturkeycanoe said :

Bank = $7k deposit @5%, return after 15 years = $14796. Didn’t have to lift a finger.
I’d feel a bit smug with this.

No argument, but where can you get 5% atm?

And, of course, then there is tax at the marginal tax rate on bank interest. So, solar panels maybe are not a particularly great return, but not necessarily a dud investment either.

wildturkeycanoe said :

Bank = $7k deposit @5%, return after 15 years = $14796. Didn’t have to lift a finger.
I’d feel a bit smug with this.

No argument, but where can you get 5% atm?

wildturkeycanoe2:54 pm 15 Jun 13

Looking at one of the calculators from the net, it appears it will take over 7 years to pay off the system you describe, with the Actewagl 1-1 buy back system. If you only get the 7.5c/kWh that the feed in tariff provides, it looks like more than 8 years. That’s an awful long time to see a return on an investment by which time will only have another 7 years tops before the inverter is due to pack it in.
Look at it this way:
Solar = $7k outlay, makes $0 profit for first 7 years, $7k profit after another 7 years. System needs upgrading. Have to stay in same house for that long, relies on tariffs staying the same and not declining.
Bank = $7k deposit @5%, return after 15 years = $14796. Didn’t have to lift a finger.
I’d feel a bit smug with this.

Hi FarrerGirl,

It would appear that you have already decided to get solar panels and are now asking “when” to get them. My response is related to your initial decision to get solar panels.

From a pure investment perspective solar panels are probably not the best place to put your money. If a significant part of your reasoning is because you want to feel all warm and fuzzy about protecting the environment then you are on to a good thing in terms of “doing your bit”.

If you put your money into a good blue chip company that pays good dividends such as one of the big banks or Telstra you will almost certainly do much better financially.

Take into account that your initial capital outlay with solar becomes pretty much worthless. Your initial capital outlay with a good blue chip company will more than likely continue to grow as you are also paid your dividends. There are also several tax breaks such as franking credits and deductions on borrowing costs such as interest.

Best option though is to work at paying any personal debt (mortgage) first.

I do have a feed in solar panel system on my roof which I’m happy with but I do concede that it is not the best investment that I had ever made.

gp said :

If you have a house, and can afford to buy the panels, do it straight away. We spent the same amount to buy our 3kW system and they have nearly paid for themselves after 3 years. Now they will return an ongoing financial return for the next 17 years.

And the Green Cloud of Smug feels so very nice.

I seem to remember reading that over in Spain the roof dudes financial returns have been cut/demolished, severly diminshing their ‘green cloud of smug’.

If you have a house, and can afford to buy the panels, do it straight away. We spent the same amount to buy our 3kW system and they have nearly paid for themselves after 3 years. Now they will return an ongoing financial return for the next 17 years.

And the Green Cloud of Smug feels so very nice.

Speaking of solar power – what happened to that “coldest house in Canberra” competition? Has a winner been announced?

The simple answer is yes – you will get more money for the energy you return to the grid from now until 1 July 2020.

http://www.solarchoice.net.au/blog/act-solar-feed-in-tariff-apply-by-30-june-2013/

No. Don’t make poor people (and me) subsidize your green cloud of smug.

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