The Economics of Rooftop Solar 8.11


solar roofs

My fellow climate activist Andrew Gunner has gone through the financial aspects of installing rooftop solar on his suburban home. His calculations produced some astounding results – that even at the low feed in tariff of 6.4 cents and feeding all the energy back into the grid they were profitable. His calculations went through several upgrades and eventually this proposition was revised downwards to about break even. So unless you are absent from your dwelling during daylight hours every day of the week and use little of your rooftop power you will be ahead. Andrew noted:

“Here is a step by step guide to help you work out whether getting photovoltaic solar panels for your house is good financially.  You can do the calculations with a hand calculator.”

His final calculations take account of all the costs of installation, maintenance, depreciation, current and future electricity prices, inflation and opportunity costs. His conclusion is that if you use 22% of the energy from your rooftop and export the rest at 6.4 cents per Kilowatt hour your return on your investment will be 8.5% and far better than bank interest. Most of us would try to improve on the 22% base by bringing flexible energy tasks, such as washing clothes, into the sunlight hours.

To back up his in-depth calculations Andrew has provided an excel spreadsheet where you can enter your own data and modify his assumptions to suit your own circumstances. He does note that if you are paying off a mortgage – about one third of Australian households – that this repayment may be preferable to installing solar. For further details go to Andrew’s blog a site worth visiting regularly