Solar PV owner Dr Rodney Bell explains why a battery backup on your grid-connect system can be an advantage.
Recent newspaper articles inferring that solar photovoltaic (PV) systems are not an economic proposition made me look again at the economics of grid-connected PV systems. I am a strong supporter of solar power systems, especially after seeing the results from my own system over the last five years.
Fortuitously my system has battery backup and is easily configured so that I will always get at least the current rate that the energy retailer charges for the electricity generated, irrespective of what they do with the feed-in tariff.
Further explanation
Without government rebates my costing for a nominal 2kW system is around $12,000. This is broken down into $6000 for panels (ten 200W panels), $2800 for an inverter/charger at Jaycar, $1500 for 10kWh capacity ex-Telstra gel battery pack, $400 for two 60 amp solar regulators and $1300 for installation. Such a system will generate 3285 kWh per year in the Sydney area. My nominal 3kW system produced 5091 kWh in the last 12 months so I have tried not to give over-optimistic figures.
The beauty of having a battery backup system is the flexibility of either selling the generated power to the grid or else storing it and using it yourself. This means that if you missed out on some of the generous feed-in tariffs offered in different states, you will at least be always guaranteed the current peak rate charged for electricity. From July 2011 it was 25c/ kWh or 35c/kWh if measured on a time of use meter, according to NSW figures.
Assuming that $12,000 was paid for the system (unlikely as the Federal Government Solar Credits Scheme would bring down the price) the return could be as much as 6.8% pa. This calculation uses the 25c rate: 3285kWh x 0.25c = $821.25.
A more serious investor would put in a system with double the number of solar panels and use a larger capacity inverter/charger such as one from Xantrex or Selectronics, resulting in an outlay of $22,000 and a return on investment of 7.5%. These returns, with their guarantees (the return will only increase over the next 10 years as electricity prices increase) make PV solar systems, particularly ones with battery backup, a very sound investment. Take into account the current Solar Credits Scheme then $3000 can be deducted from the capital outlay for the 2kW system lifting the return to 9.1% pa. The return on a 4kW system jumps to 10.3%.
Solar credits
Note that there is no tax on returns from these investments so, depending on your tax level, a normal investment return in the order of 15% could obtain the same monetary return. On the other hand, if you are a part-aged pensioner, as my wife and I are, and own your own house, then your part-aged pension could increase because the investment becomes part of the family home, which is a non-assessable asset. This will increase the effective return by a couple of percentage points, making a possible return on investment of over 10%.
Read the full article in ReNew 118This entry was posted on Monday, December 12th, 2011 at 10:54 am