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by Jarrah Harburn on October 5, 2009

in Installation advice

Hi Adam,

Great to hear from you.

Okay, so really the comparison of a 1.5 and 2kW system comes down to a larger outlay for a larger system. But is it worth it? Let’s put aside the environmental and social aspects of this and examine in purely economic terms the pros and cons.

Read more about Solar Choice’s personalised solar system brokering service

The two aspects of the solar system that will benefit you financially are the savings you will make on your energy bills and the feed-in reward credit you are entitled to. In Victoria, the feed-in reward rate is set at (but not yet operating at) 60c a Kilowatt on a net (surplus) model.

Firstly, the savings. A 2kw system will generate approximately 9kW/h for you a day in Australia. 9kW/h x 15c (the market value of energy) = $1.35 a day off your bills.
Which equals $40.50 a month, and $121.50 a quarter. A 1.5kW system will generate $91.12 a quarter.

Savings Summary
1.5kW = $91.12 quarterly ($1822.50 over 5 years) off your bills
2kW = $121.50 quarterly ($2430.00 over 5 years) off your bills

Remember this is the worst case scenario, where all of the energy your system generates is used up by the usage of the house. We really need to get some feed-in reward happening, where some of the units are in surplus to requirements.

Secondly, the feed-in reward. This is where it gets complicated. The feed-in only rewards you for surplus energy, with a calculation made every half an hour at your meter box to record this. Depending on when and how much energy you are using during the day, you will get a different amount of surplus. The panels obviously only work during sunlight hours (being around 8 a day on a well placed system). If you are able to reduce the load of the house during these times, you will greatly increase your chances of getting a high feed-in reward rate. If you cannot, then it will not come into play as much, and this will make a difference on the revenue saved and earned by your panels.

Based on how many of these half hour periods you can put into surplus, and therefore increase your savings from 15c to 60c over an hour, the amount you generate can drastically change.

For example, in an ideal situation where there is NO load on the house at all, the savings summaries would look more like this:

Max feed-in summaries
1.5kW = $364.50 quarterly ($7290 over 5 years) as a credit
2kW = $486.00 quarterly ($9720 over 5 years) as a credit

Remember, the first summary for savings was not money you are earning, it is money you have not had to pay. The feed-in reward summary is for a credit however, so it is actual money the panels have earned you.

It will be a combination of the savings and feed-in credit will combine to make this decision economic for you and every property in Australia. To concentrate more explicitly on your question comparing 1.5kW and 2kW systems, it is more likely that you could get more of a proportion of that max feed-in summary with the larger system. This would be because if two houses with the same load, but one had a 1.5 and the other a 2kW, the 2kW equipped system would find more instances of surplus, and therefore more credit. The money generated increases exponentially as you take advantage of that inflated surplus rate, but as you can see yourself $2,500 is no small amount of money to consider.

These are my thoughts on the matter. I know I have not given you a clear answer of which system is better and if $2,500 is worth the increase. This is because, as I hope you can now understand, there is no definitive answer. My suggestion would be to take a wholistic approach to the install and attempt to reduce the load of the house right away and sustainably into the future. If your budget can stretch to the larger 2kW system, and you take these suggestions on board,then the benefits of doing so will be felt.

Regards,

Jarrah

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Jarrah Harburn

Solar Broker
Solar Choice Pty Ltd

www.solarchoice.net.au

Ph: 1300 78 72 73
Mob: 0422 691 303
Skype: SolarChoiceBroker

Level 3, 39 East Esplanade
Manly, NSW 2095
AUSTRALIA

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© 2009 Solar Choice Pty Ltd

Jarrah Harburn

Jarrah Harburn

Jarrah is the Director of Solar Choice’s UK subsidiary, Solar Selections. He has 3 years' experience in the UK solar industry following 2 years' experience with Solar Choice in Australia.
Jarrah Harburn

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