Most people think of a solar system as a way to save energy (at least energy drawn from the grid) and save money (which it certainly does). But few people think of their solar system as a revenue generating asset that will give you a higher rate of return than a high interest bank account.
Of course how much revenue your solar system generates depends on a number of factors, but it is an interesting exercise to work through an example of how much revenue a typical solar system generates over its lifetime.
Let's take a look at a solar array in Melbourne that might be considered expensive but is commonly installed. Our assumptions are as follows:
- Cost of system $12,500
- A 8.2 kW Fronius inverter
- 10.9 kW of Q-cell panels (133% solar array over-sizing as per CEC rules)
- Panels installed with 2/3 of panels facing north and 1/3 of panels facing west
- Roof pitch 20 degrees
- Average annual output 13,059 kWh
- System performance degrades by 0.54 % per year
- 5% maintenance costs per year (including inverter replacement every 10 years)
- 5% of the production is clipped
- 25 % energy generation is exported
- Average power price of 28 c/kWh
- Average FiT of 20 c/kWh (available from the better retailers)
- $60,300 total gross revenue over 25 years
Plugging in these very conservative numbers you get an astounding 5.6% interest rate yield on your investment, try getting more than 4.5% interest at a bank even with a high interest account!
This simple analysis shows that solar is a great investment option for home owners, at a time where banks offer little in the way of a return on your savings. No wonder pension funds from all over the world are descending on Australia to invest in solar. It would be great if all Aussie households (not just rich investors) could get access to a solar revenue stream, especially low income households, it would be a win for society and a win for the environment.