Since the withdrawal of NSW’s Solar Bonus Scheme, there has been much discussion about the benefits of Solar power in the state. Solar power in NSW, however, is attractive for the right household or business.
What are the benefits of a solar power in NSW?
The primary driver for taking up solar power in Australia is to save money related to electricity–whether the system owner/operator is using the system to reduce power bills, or fortunate enough to be signed up for a Solar Feed-in Tariff. The details as to why solar power is an attractive investment in NSW are outlined in the points below.
Federal government Solar Credits rebate scheme
In order to harness the environmental benefits of solar power–in particular its greenhouse gas abatement potential–the Australian Federal government has introduced a number of incentive mechanisms that make installing a solar PV system financially attractive. Most notable and most directly influential with regard to solar power and other forms of renewable energy is the Enhanced Renewable Energy Target (eRET). The eRET, as it currently stands, calls for 20% of Australia’s electricity generation to come from renewable sources by the year 2020, and lays out the framework by which progress towards this goal is to be monitored and accomplished.
For those interested in solar power, of particular interest is the eRET’s Solar Credits scheme. This provides what amounts to an up-front discount (in the form of STCs/RECs) on solar power system installations and solar systems anywhere in Australia. The amount by which a solar power system’s outlay will be reduced through the eRET depends on the solar system’s size and location–regions that receive more sunlight will be allotted a greater number of STCs.
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 at rates that are set to rise by as much as 19% in NSW by July 2012 and by as much as 37% nationally by 2014. Investing in a solar power system would be particularly advantageous for premises that consume the bulk of their electricity during daylight hours–namely, the majority of all businesses.
Solar power system owners are also able to sign up for Solar Buyback agreements with their electricity retailer and get paid a rate for each kilowatt-hour of solar power that they export to the grid. Following the Independent Pricing and Regulatory Tribunal’s (IPART) decision regarding the fate of NSW’s now defunct Solar Bonus Scheme, any “Solar Feed-in Tariff” or Solar Buyback agreement that exists is unsubsidised and voluntary. (Read about IPART’s determination.)
Therefore, in order to maximise the benefits of owning a solar power system in NSW, it is important to understand how to time electricity consumption. Read more: Is solar right for you in NSW? - Solar Feed-in Tariffs vs. Solar Buyback Schemes.
Decreasing cost of solar power = Smaller outlays
The cost of installing a solar PV system has fallen dramatically–as much as 70% in the past couple of years by some estimates–and is expected to continue on this trajectory for the foreseeable future. A report by the reputable consultancy firm McKinsley estimates that unsubsidised solar power will be cost-competitive with coal and nuclear power by the year 2020. In the meantime, the purpose of subsidies is to levelise the cost, making it affordable to the average customer.
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
As mentioned above, NSW does not currently have a state government-sponsored Solar Feed-in Tariff. The solar power system size best suited to your needs will therefore depend on your daytime electricity demand. Since any solar electricity exported to the grid will result in only a nominal per-kilowatt-hour credit (maximum 8c) to the owner’s electricity bill, it is imperative 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 5 or 10 kilowatts (kW), or upwards of 50kW, 100kW, or larger. Solar Choice has overseen the installation of a number of 30kW solar systems in NSW.
…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, 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 rise significantly in the near future, solar PV will become an increasingly attractive way to protect yourself against soaring power bills.
© 2012 Solar Choice Pty Ltd