What is the expected Return On Investment (ROI) time-frame?

Okay so you’ve heard solar can save you big bucks and it’s a great investment. But how long is it going to be before you’ve pocketed enough savings to have covered the costs of buying your Solar PV System?

Here’s a hypothetical example:

Considering the average household’s energy usage, sunlight hours in Australia, current rates for electricity and Feed in Tariffs, a home with a 6kW system could be looking at annual savings on energy bills of up to 80%.

This would make a typical Solar PV System’s ROI 2-5 years. For States that offer additional incentives on top of the Federal Government Small-scale Renewable Energy Scheme (SRES), it could be even less.

Payback periods for solar systems can vary from household to household and there are a few factors that will impact your ROI.

 

Factors That Could Affect Your ROI

  • Location & Panel Direction

    The more sun your solar panels receive means the more energy it will generate. If your home is located where daylight hours or sunny days are plentiful then your ROI will be lower than someone whose household is not.

    Solar Panel Positioning and Roof Direction
    The position and direction of your solar panels can affect how much sunlight they’ll receive and therefore how much energy is generated for your use. First off, avoid having your Solar Panels installed where it could get shaded throughout the day. E.g. near large trees.

    Find out the ideal orientation for your panels here

  • Changes To Government Subsidies

    If the Federal Government Small-scale Renewable Energy Scheme (SRES) is eliminated, the cost of Solar PV Systems will rise and therefore the ROI timeframe will increase.

    If the State, you live in has or introduces a new subsidy, rebate or incentive that you can combine with the current Federal Government  SRES then your ROI will be lower than someone residing in a State that does not have this additional subsidy or rebate.

  • Your Energy Habits

    To maximise your potential solar savings those installing solar will need to adjust their energy habits and shift the majority of their energy usage to during daylight hours, whilst the solar panels are generating energy. Find some handy tips to help you adjust your habits here.

  • Finance

    If you’re paying for the Solar PV System on finance, the interest of this finance could increase the ROI timeframe. You’ll want to work out how much extra time this is going to add, to ensure finance is the best option.

    TIP: Green Loans offer low-interest rates as low as 6.9% pa, meaning you could pay off your interest and payments with your solar savings.

  • Work Out Your Predicted ROI

    Check out our Solar Savings Calculator! It’ll help you determine the estimated payback period and financial returns from investing in solar, plus it will also estimate what your bills will be after installing your system.

 
Start speaking to installers and work out your estimated payback period. Receive 3 Obligation FREE Quotes!

Where in your solar journey are you?

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Beginners Guide to Solar Power

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Become an expert and better understand the ins and outs of solar power and solar PV systems for your property.

Includes detailed explanations and diagrams of the various types of solar systems and their parts, solar battery storage systems, Government incentives, expected ROI periods, finance, energy saving tips and more!

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Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.