PV owners can estimate just how quickly their PV system will pay-off.
The Alternative Technology Association (ATA) has crunched the numbers to estimate the pay-back time for solar photovoltaic systems in each state based on the available Small Technology Certificates (STCs) under the Federal Government’s Renewable Energy Target (RET). In most states if you have a grid-connected system, you may also be eligible for a feed-in tariff and get paid for the clean, green power you put back into the mains grid. When installing a grid-connect system ask your electricity retailer what feed-in tariff they offer as some are more generous than others. Alternatively, you can check out the ATA Feed-in Tariff Survey.
The modelling is based on a 1.5kW system that fully installed would cost $9000 before payment of STCs. There is no direct federal government rebate for installing a solar power system. Instead they qualify for STCs created through the Renewable Energy Target market. The amount of STCs your system qualifies for is dependent on its size and your location.
The ATA research was used in Choice magazine’s article on solar payback times.
ATA Solar PV Payback Model Assumptions & Descriptions:
STC price: $35
The new fixed $40 price for STCs from small renewable energy systems is the price that liable parties such as electricity retailers are mandated to purchase these certificates for. The actual price received by the end PV consumer will be slightly less than this and dependent upon market offering by PV installers and certificate traders.
STC multiplier:
ATA modelled payback times using both the current 5 times STC multiplier under the Federal Solar Credits scheme, as well as using the 4 times STC multiplier, which is set to come into effect on the 1st July 2011.
Electricity export rate:
● For net feed-in tariff jurisdictions (i.e. NT, QLD, SA, Tasmania, Victoria and WA), ATA modelled two scenarios assuming a household exports 50% and 75% of the total electricity generation from their solar PV system into the grid.
● For gross feed-in tariff jurisdictions (i.e. NSW and ACT), ATA modelled 100% export of the total electricity generation from their solar PV system into the grid.
● NSW – whilst the NSW feed-in tariff was announced to end in January 2011, the ATA modelled a scenario for NSW based on the latest feed-in tariff policy in that state – i.e. 26c / kWh (gross metered).
Table 1: Solar Photovoltaic Payback Period for a 1.5kW system
| State | FiT Rate (net/gross) |
Electricity Price (per kWh) |
Payback x 5 STCs (50% export) |
Payback x 5 STCs (75% export) |
Payback x 4 STCs (50% export) |
Payback x 4 STCs (75% export) |
| SA | 54c/kWh (net) | 21c/kWh | 6 years | 5 years | 8 years | 6 years |
| VIC | 66c/kWh (net) | 19c/kWh | 8 | 6 | 10 | 7 |
| WA | 47c/kWh (net) | 20.17c/kWh | 7 | 6 | 9 | 7 |
| NSW | 26c/kWh (gross) | 19c/kWh | 9 | N/A | 13 | N/A |
| QLD | 50c/kWh (net) | 21.35c/kWh | 4-6 | 3-5 | 6–8 | 5–7 |
| ACT | 45.7c/kWh (gross) | 15.59c/kWh | 5 | N/A | 7 | N/A |
| TAS | 20c/kWh (net) | 20c/kWh | +20 years | +20 years | +20 years | +20 years |
| NT | 45.76c/kWh (net) | 19.23c/kWh | 4 | 4 | 6 | 5 |
Other:
- The following Zones were used for the purpose of REC / STC calculation:
- NT: Zone 1 (Alice Springs)
- QLD: Zones 1 – 3
- SA: Zone 3
- Tasmania: Zone 4
- Victoria: Zone 4
- WA: Zone 3 (Perth)
- NSW: Zone 3 (Sydney)
- ACT: Zone 3
- System degradation rate: 0.5% per annum
- Inverter is replaced after 15 years at a cost of $1,350
- Annual increase in retail electricity price: 3%
- Discount rate: 6%
Tags: feed-in tariffs, photovoltaics, solar
This entry was posted on Tuesday, April 19th, 2011 at 3:29 pm