THE BIG QUESTIONS …
How much does rooftop solar SAVE?
How much does rooftop solar COST?
Sunshine, sea and solar …
a great Top End trifecta
Facts to know about solar savings and costs
The key point to remember when it comes to the costs and benefits of solar is that rooftop solar is now the WORLD’S CHEAPEST form of new electricity generation. This is great news for homeowners, businesses and institutions because it means that as more solar comes on line it will likely –
Eventually bring down prices for power from the grid as utilities scale solar comes on stream.
Let you MUCH LESS for your power if you install your own rooftop solar panels now.
Solar isn’t just cheaper – it brings other indirect savings in time, effort and money because it is also today’s most FLEXIBLE electricity source. Free energy from the sun can be captured from
A lightweight, fold-out portable solar panel array mounted on a construction site trailer,
A grid connected rooftop array on your house,
A large-scale commercial installation on a shopping center, school or factory, or
A utilities scale solar farm on hectares of land feeding enough electricity into the grid to power thousands of homes and businesses.
And installations can be located anywhere the sun shines – right where the power is needed. This can be a huge benefit in remote regions of the Northern Territory where more and more off-grid systems are now being installed – these systems don’t need an infrastructure of kilometers of expensive poles and wires. They are completely self-contained and operate independently.
Today’s low cost of solar is the result of technological advances and large-scale manufacturing cutting as much as 80% or more off the cost of solar panels and other components over the years since 2009.
And there are other big benefits for Territorians – we live in a part of Australia where the sun shines strongest and we enjoy some of Australia’s most generous Government incentives and concessions for switching to renewable solar.
So how much does rooftop solar really SAVE?
For Northern Territory homes
As a solar homeowner in the Northern Territory you can SAVE HEAPS … way more than our southern States cousins, who have every right to be jealous.
In fact rooftop solar systems installed by Country Solar NT over the years since 2010 is literally saving Northern Territory householders and businesses millions of dollars every year. For homeowners this is because the Territory now has Australia’s most generous Feed-in-Tariff regime – the scheme under which utility providers buy the surplus power your system generates to be fed into the grid for sale to other consumers.
In the jargon of the solar industry this is referred to as the “FIT” and in the Northern Territory the FIT is “1 for 1” meaning our electricity provider, Territory Power and Water, will pay you the SAME PRICE for any surplus power you FEED-IN to the grid as they charge for any base rate power they sell you.
And that’s a great deal because solar systems in the NT typically produce more kilowatt hours of electricity a day than equivalent systems anywhere else in Australia.
You use some or all of the FREE units of power from your system directly, saving the money you would have had to pay if that power had come from the grid. If there is more power than you can use, then the magic of the system we set up for you will pump it into the grid and you get an automatic credit from Power and Water.
When you draw from the grid at night, or at any other time the sun doesn’t shine, your accrued credit will be offset against your bill unit-for-unit, meaning a proportion of your power from the grid is also FREE.
The current base retail rate for domestic grid electricity in the NT is 29.95 cents a unit. As we have all come to learn, those cents really mount up.
But the fortunate people who have already installed a typical 6kW or 6.5kW rooftop solar system on a Darwin home are saving $2,500 or more a year.
That is a heck of a deal in anyone’s language. Spare a thought for the folks down South where feed-in tariffs typically range from as little as 7c to around 16c a unit. No wonder they feel a little peeved.
The roof of the Casuarina Square shopping centre – one of the Darwin’s largest commercial solar installations
Solar is SMART business for Territory commerce, industry, government, clubs and institutions
Businesses and organisations with bigger commercial rooftop solar systems can save tens of thousands of dollars a year. That’s why Country Solar NT is regularly being contracted to design and install commercial systems from 30kW to 800kW capacity.
Technical issues mean Territory businesses or industries are not permitted to feed-in power to the grid from bigger solar systems. But it doesn’t matter because they typically use all of the daylight power they produce anyway. They still achieve their big savings because using their own power means they are not paying day-time peak rates for grid electricity. Instead, with capital costs amortised over 20 years, they are getting their electricity for around 7c a unit – the grid base rate is over 30c.
Businesses also can enjoy on-going tax relief to further offset the cost of a solar system, much as they would for any other capital item. The tax law is complex and the amount of relief will depend on circumstances like your funding arrangements. Therefore a chat with your accountant should be part of your due diligence when considering a business solar installation.
Broadly, you can depreciate the cost your system (net of rebates) over 20 years and if you fund your purchase through borrowings then you can claim the interest payable as a deductible expense. Maintenance costs also are deductible. If you are registered for GST then you also will be entitled to GST Credits against the cost of your installation.
However, if you benefit from a Large-scale Renewable Energy Target “rebate” on the cost of your installation then this will be treated as income and will be taxable. Likewise, for any payments or credits you receive for electricity you sell.
These rules do not apply for residential solar systems – generally there are no depreciation or expense write offs for solar householders and they are not required to declare rebates through the Small-scale Technology Certificates scheme or feed-in tariff credits as income. The exception is investment properties where the treatment will be similar to the rules applying for business.
Go solar NOW or Wait and see?
This is a common question from people thinking about going solar. If it is top of mind for you then you can check out the pros and cons in this BLOG page article:
“Why you should be moving your business to solar electricity right NOW”
So how much is rooftop solar really going to COST?
For Northern Territory householders
Every rooftop solar installation will be different depending on your location, your roof angles, your needs, shading and so on. At Country Solar NT we will design a system to suit your circumstances.
As result the actual cost of rooftop solar installations vary according to requirements, the selected components, your location and the power output you need.
But as a rule of thumb Northern Territory householders can expect to pay around $1,700 to $2,200 per kilowatt for a quality rooftop solar array using Tier 1 components.
This estimate INCLUDES connection and metering fees payable to NT Water and Power and fees to local authorities for building approvals and is AFTER the Government sponsored incentives for new installations have been deducted.
If you receive quotes for less in the Northern Territory, then you need to have a close look at the quality of the components being offered, the reputation of the manufacturers and the warranty support.
And you should be particularly wary if you are offered a “standard” price without a proper assessment of your situation and needs – rooftop solar is emphatically not an industry where one size fits all.
Inferior products are simply unlikely to go the distance and are a very bad choice for a long term investment that should be delivering you hassle-free benefits for 20 to 30 years.
Like most other goods and services, rooftop solar costs more in the Northern Territory than in the Southern States. This is due in part to the extra expenses we face in remote and sparsely settled regions, but is mainly due to the need for much more robust installations to cope with cyclones and other challenging climatic conditions.
But this is offset by the generous concessions available to solar energy users and the extra savings generated when your rooftop array provides free power for those air conditioners and clothes dryers that run so hard over our long, hot and wet summers.
Under up-dated rules introduced by the Power and Water Authority most typical Northern Territory home solar installations are bigger – typically 6 or 6.5kW compared with a previous limit of 4.5kW.
Homes with 3-phase electricity (usually to power air conditioners) can install a system of up to 9 kW capacity.
It’s in your interests to install the biggest system you can afford – many customers who installed smaller systems under the previous rules are now returning to have them expanded. They have seen the benefits of the savings on their power bills and would like more!
Still unsure about going solar?
Check out this Blog report which explains issues you should be taking into account
“Why NT householders should be moving fast to lock in solar benefits while they still can”
The COST of solar for businesses
Rooftop solar makes real financial sense for businesses, industries and institutions because most of them mainly operate during the day – the time when the sun shines longest and strongest.
The benefits of scale also mean commercial solar installations also typically cost less per kW than residential solar.
Like residential solar, what you pay will vary according to the size of the installation, the location, the situation and the selected components. It also can be influenced by special safety requirements – for example on a dangerous site like an oil and gas depot.
Broadly, expect to pay from $1,400 to $1,900 per kW (after incentives) for a routine commercial solar installation in Darwin and more for solar in a remote location.
But remind yourself that with this level of investment amortised over 20 years you will be paying around 7c a unit for your electricity compared with a base rate of around 30c off the grid and more in peak periods. Your 7c price will not increase and you can expect your system to have a life of 25 or 30 years.
As with domestic solar, these prices are higher than in Southern States due to the harsh climatic conditions, remoteness and the need to cyclone proof installations in the Top End.
Like householders, Territory businesses have the benefit of generous government incentives and concessions. But they also get the benefit of on-going TAX BREAKS not available to householders.
Because they mainly operate when the sun is shining, businesses also can get MAXIMUM savings from directly USING all the FREE electricity their system produces instead of paying high “peak” rates for power from the grid. And this continues day after day over the years ahead, with minimal maintenance costs being the only outlay they need to pay.
The savings can be great – for example as much as $2,000 a month for a modest 30kW system, meaning very rapid payback periods. For bigger businesses with bigger installations, the savings run into tens of thousands of dollars a year.
This is why more and more businesses and institutions like schools, universities and clubs are going solar – it really is a no brainer!