With the government set to announce its feed in tariff rate for solar power post premium and transitional incentives, many are fore seeing a cloudy day on the horizon for the solar PV market in Victoria. The tariff (expected to be within 8c to 16c per kilowatt hour exported)will be paid via the owners electricity retailer (Origin, AGL, Diamond Energy etc,)and within limitations set by the electricity distributors (United, SPAustnet, Jemmena etc,).
Ultimately a result of this will see the recouping of the initial investment for a solar power extending , but it’s not as bad as some may think.
Already peak rate kWh are cresting 35c post the Carbon Tax introduction, and with the surety that future electricity prices will only scale upwards if we remain tied to a brown coal infrastructure, solar power is still returning a positive and sustainable investment option for financially wary investors.
For example, and this is entirely speculative on price and based on a 5kW PV system costing in the range of $9,750-$13,000 and considering the following:
- If peak electricity purchase rates are .35c and buy back tariff is set at .10c per kWh
- Assuming peak electricity price increases 5% a year
- If the house hold consumes 16kWh per 24 hours and exports 66% of the 3.8 Sunlight hour solar PV exposure that solar output is based on in Melbourne
- If the daily service charge from the retailer is .75c per day
The payback period is between 8-11 years and considering most panel and inverter warranties include 10 year manufacture warranty (optional with some inverters) and 25 year efficiency warranties, you are still making savings of $1-2 thousand per annum whilst protected by various manufacturer and installer warranties.
Given that a system should still happily produce power for another 14-17 years (although at up to 20% less output due to system degradation which varies from component to component) after it has paid for itself, solar power is certainly a serious economical consideration for those wanting to have more control over their financial futures without being dictated to by an exponential increase in utility supply costs.