Solar Power: A Lucrative Investment

5th Jul 18

Written by James Doyle

Safe investments tend to have modest rewards, while high-risk investments tend to be the most lucrative. However, solar power systems are an exception, since they are safe investments with very high rewards. This is especially true in Australia, where abundant sunshine makes photovoltaic arrays very productive, and high kilowatt-hour prices translate into increased savings once you produce your own electricity.

General Outlook for Solar Power in Australia

The installed cost of solar photovoltaic systems has been decreasing rapidly in recent years, thanks to innovation and large-scale manufacturing. Australia also has the advantage of being relatively close to China, where leading solar panel manufacturers have their main operations, and this proximity reduces the shipping costs of solar equipment. It is now possible to install a fully operational commercial solar system in Australia for less than AU$1,700 per watt, and when you subtract government subsidies the price can go below AU$1,000 per watt.

On the other hand, Australians are faced with ever-increasing electricity prices, and some consumers have seen their power bills double in less than a decade. However, for homes and businesses with solar power systems, the savings increase along with kilowatt-hour prices; some households pay over 40 cents/kWh, but that is also how much they can save with solar generation.

  • A 5-kW solar power system can easily produce over 7,000 kWh per year, thanks to the abundant sunshine in Australia.
  • These 7,000 kWh translate into yearly savings of AU$2,800 for households subject to the highest kWh prices.
  • You are looking at a payback period of 2-3 years, and a yearly return on investment of over 40 percent.

This is a very simplified analysis, but it gives you a general idea of what you can expect after deploying a rooftop solar system. Now, let’s discuss why solar power can be considered a safe investment.

Why Solar Power is a Low-Risk Investment

Solar photovoltaic systems work with sunlight, which is guaranteed to be available – the sun has around 5 billion years of life left, according to astrophysicists. The same cannot be said of generation systems that use fossil fuels, since their energy inputs are non-renewable and subject to volatile prices. In a few words, solar power systems work with an input that is free and abundant.

Photovoltaic panels and their complementary equipment are also very durable, and covered by solid warranties if you use equipment from leading manufacturers.

  • If you use top-quality solar panels you can expect a 10-year warranty against manufacturing defects, and a 25-year warranty that applies if solar panel productivity drops below a specified value (varies by product and manufacturer).
  • Solar inverters and batteries tend to have a shorter service life than the modules themselves, typically rated for 10 years, but by then the installation will have already returned its upfront cost more than three times!

Commercial solar systems are affordable, while offering a short payback period and a huge return on investment. In addition, the long warranties that cover solar equipment ensure your installation will last for many years after the payback period.

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