Solar power is still a great investment in NSW even in the absence a feed-in tariff incentive in the state. The fact that solar PV system prices have been declining combined with the fact that retail electricity rates have risen significantly in recent years means that solar panels can now serve as a cost-effective, rooftop ‘power plant’ for NSW homes and businesses. This article takes a look at the benefits of solar power and how to best take advantage of them.
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What are the benefits of a solar power in NSW?
The main reason that NSW homes and businesses opt to go solar is to save money on their power bills. Since the closure of NSW’s Solar Bonus Scheme to new applicants, new solar system owners stand to benefit most from having a system by endeavouring to consume as much of the solar power that they produce as possible. By doing so, system owners can reduce the amount of electricity that they have to purchase from their electricity retailer/utility. This is referred to as ‘net metering’ and is the new, accepted reality when it comes to solar power.
Federal discount for solar PV system installation in NSW
The federal government’s Renewable Energy Target (RET) is now the primary mechanism for the subsidisation of small-scale rooftop solar in Australia. In effect, the federal government, through the RET, subsidises the installation of any solar PV system up to 100 kilowatts (kW) in capacity. Exactly how much this federal discount works out to be depends on a few factors, including the location of the installation (sunnier regions will receive a larger discount) and the market price of the tradable certificates (small-scale technology certificates or STCs) that constitute the subsidy. Generally speaking, in NSW this discount is in the region of $0.70/W off the full cost of an installation. This means a discount of around $3,500 off a 5kW solar system, or $2,100 off a 3kW solar system.
Attractive return on investment (ROI) for solar power in NSW
In NSW, where there is currently no Solar Feed-in Tariff in place, a solar power system can provide its owner savings on electricity bills by reducing the need to purchase power from the electrical grid. Investing in a solar power system would be particularly advantageous for those who consume the bulk of their electricity during daylight hours.
Solar power system owners may also sign up for Solar Buyback agreements with their electricity retailer and get paid a set rate for each kilowatt-hour (kWh) of excess solar power that they export to the grid. The current buyback rates on offer from electricity retailers in NSW can be viewed & compared on the federal government’s EnergyMadeEasy website.
Solar power is a low-maintenance investment
Solar systems–unless they are perched on solar trackers–generally have no moving parts and require very little in the way of maintenance or inputs once they are installed and functioning.
Tax benefits for businesses with solar power systems
ABN holders may be able to claim depreciation and GST credit on system production.
Typical solar system size in NSW
The solar power system size best suited to your needs will depend on your daytime electricity demand. Since any solar electricity exported to the grid will result in only a nominal per-kilowatt-hour credit (only about 7c/kWh maximum) to the owner’s electricity bill, it is key to select a system size whose production will not exceed electricity demand. Depending on the home or business, the best system size may be as small as 1.5kW or 10kW, or upwards of 50kW or 100kW.
…and how much power will my solar power system produce?
Each solar power system has its own nameplate capacity. Real solar system output relative to this figure will ultimately depend on the quality of the components (are they functioning to specification?), the weather, and shading. Most postcodes in NSW fall into REC Zone 3 (read about REC Zones), but there are also a number in sunnier REC Zone 2. Depending on the location, system owners can expect between about 3.5 and 4 hours of “peak sunlight” daily, averaged across the year. In such conditions, a 5kW solar system would produce between 17.5 and 20 kilowatt-hours (kWh) on an average sunny day. Assuming an electricity rate of 20c (a fairly low estimate these days), self-consumption of all this power would result in a power bill savings of $3.50 and $4 per day. With electricity rates set to continue rising significantly in the medium to long-term future, solar PV will become an increasingly effective way for system owners to protect themselves against soaring power bills.
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