Financial Considerations in Solar System Installations

Rooftop solar system cost

According to National Geographic, Earth receives enough sunlight in one hour to produce power for each human for one year. Also, the infrastructure that we have now is enough for us to save a lot by bearing a one time solar installation cost. Around 3.4 million solar PV systems have been installed in Australia till December 2022. Solar PV installations have grown because solar system price can be reduced through green loans, STCs, PPAs or power purchase agreements, and rebates provided by the government. 

A rooftop solar system can recover its cost in three to four years and can save $10,000 to $30,000 in its lifetime excluding solar maintenance cost. Additionally, any extra energy generated can be supplied back to the grid and earn money. Therefore, it is high time to become self-reliant in energy. 

How much does a Rooftop solar system cost in 2023

“Coal and Petrol may come and go; but the sun will go on forever”

An article published in the Business Standard claimed that we will run out of petrol and natural gas in around 55 years. Using renewable solar energy kills two birds with one stone; it reduces your carbon footprint and saves a lot of money. Perth is recognized as one of the leading solar cities in Australia as it daily receives approximately 5.8 hours of “peak sunlight” per square meter. The amount of energy required by households varies depending on the size of the family, the frequency and type of appliance usage. For instance, a 3-person household generally consumes around 20-25 kWh of energy per day. 

Upfront Cost – Installation Cost

Installing a solar system requires an initial investment. You’ll need to consider the cost of solar panels, inverters, mounting equipment, wiring, and installation labor. The upfront cost can vary depending on the size and complexity of the system. There are many clean energy council approved solar installers in Australia which provides solar packages.

Solar installation cost in Perth for a 6.6 kW solar panel system would in-between $5000 to $6000. This price is after the STC rebate deduction. These rebates have significantly contributed to the increase in solar installation in Perth in 2023.

Save Money on Your Power Bill

If you can recover your solar system price in two years and your rooftop solar PV system will help you in earning money, why will you not install one! This can happen by a simple arrangement called Solar Net Metering System

The Solar Net Metering system enables households and businesses to simultaneously use solar power while remaining connected to the traditional electrical grid. By connecting their solar panel system to the grid, owners can supply solar power to others and receive credits. In Australia, excess energy generated by solar panels is credited at the retail electricity rate. It means consumers pay the difference between their net energy consumption and surplus solar power production. 

There are two types of Solar Net Metering agreements in Australia: Solar Net Metering and Gross Net Metering. Solar Net Metering measures solar power consumed within the home, with only the unused or excess solar electricity exported to the grid. Gross Net Metering exports all solar electricity generated to the grid. 

With enough sunlight falling on Australia, large solar systems can produce significant amounts of solar power for both Net and Gross Metering. Therefore, people with large rooftops can certainly benefit from it by paying solar installation cost just once. 

Return of Investment of a residential rooftop solar system

The payback period for a solar PV system is the time it takes to recover the initial investment from the savings generated by the solar system. Return on Investment (ROI) refers to the effective returns expected throughout the life of the solar system. The quicker your monthly savings from solar power, the shorter your payback period and the higher your ROI. Commercial and industrial consumers usually expect a payback period of 3-5 years, while residential consumers may expect it in 5-7 years. After paying back the initial cost, the energy generated by the system for the next 18-22 years is practically free.

One important and lucrative aspect of investing in solar is that the returns are guaranteed. Unlike other market investments with associated risks, solar investment provides assured returns as solar systems are likely to generate electricity as long as the sun exists.

Property Value after installing a rooftop solar system

Installing a solar system can increase the value of your property. Studies have shown that homes with solar panels tend to sell faster and at a higher price compared to similar properties without solar installations. This can be an important financial benefit if you plan to sell your property in the future.

How much maintenance is required?

Other than paying a solar installation cost, you may also have to bear the solar maintenance cost which is not high. This can be done annually with the help of PV monitoring platforms. They offer a range of features including:

  • calculations and analysis
  • reports of key performance indicators
  • financial calculations
  • errors and alarms
  • maintenance ticket tracking
  • interface with utility or larger system
  • curation of updated project documents

The platforms analyze data by comparing it with neighboring systems or a computer model based on PV system description and environmental conditions. They provide reports on availability and performance ratio and can calculate cost savings based on time-of-day and seasonal variation in utility rates. 

They can also raise alarms for abnormal conditions and faults, allow users to issue maintenance tickets to fix the issue, report required information to the utility company, and curate updated project documents. The financial calculations can include the value of lost production of solar energy due to downtime or reduced output. These features help solar operators and retailers identify problems, address them promptly, and optimize system performance, leading to increased efficiency and cost savings.

What is the maintenance cost of rooftop solar system in Western Australia

Experts suggest having an annual maintenance service for your rooftop solar PV system to ensure its optimum health. The solar maintenance cost for a 6.6kW system with 16 panels typically ranges from $150 to $200 annualy. Repairs for any major damage or malfunction found during the maintenance service can cost extra if not covered by any warranty or guarantee. Reduced output is a simple way to chalk out an underperforming solar panel system, as damage or signs of deterioration cannot be noticed by a layman. However, one of the symptoms may be significantly reduced power production. 

If your home’s electricity usage is unchanged but you have been purchasing more energy from the grid after installing a solar system, it may be high time to seek assistance from a local Perth solar technician. It is recommended to schedule an annual maintenance inspection to detect any damage, decreased output, or malfunction resulting from animals, age of the system or weather. 

For how many years solar power production is guaranteed

The solar installer offers a production guarantee (PG) to assure the homeowner that the installed solar system will generate a specific amount of energy during a specified duration, as the name suggests. Typically, these guarantees last for 10-to-30 years since solar panels are generally considered a long-term investment. The guarantees usually decrease over time, with a pledge to deliver 90% of the promised production amount at 10 years and 80% at 20 years.

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