With todays announcement by the WA Labor Party that it will introduce a feed in tariff of $0.60 for renewable energy has prompted me to revisit solar power on this blog.
Last time we looked at it I obviously wasn’t very clear, as I was shouted down by a commenter I had never previously seen or seen since, so I will attempt to be very clear this time.
Here is the scenario, you buy a 1kw solar power system from Alinta Assist, my place of work. This system is put on your roof, and connected to the power grid, allowing you to export excess power. You get a new meter, which registers power out as well as power in on an hourly basis.
What this means is that during the day, whilst your solar system is generating power, and your home usage is probably low, you have an excess of power, at the system sends that out to the power grid, and the meter records that. In the evening however, your system is generating no power, so you are importing it at a cost of $0.12 per kilowatt hour.
Here is why the new scheme would be fantastic;
Previously, the feed in rate was the same as the buy rate, $0.12, giving very little advantage to you unless you buy a system capable of covering all your needs, an average of 17kwh in Australia. A 1kw system only generates about 5kwh a day….
So you have put a 1 kw system up on your roof.
It is now generate 5kwh a day. You are using 17kwh a day, but most of those are used in the evening, when you have the tv, washer, dish washer, dryer, oven, microwave, stereo, air con etc etc. all cranked up.
during the day, lets say you use 3kw of the 5 you have generated, which is basically your fridge and a few other bits and pieces.
This leaves 2kw, you now get paid out at $0.60, a total of $1.20.
You have already got 3kw at $0.00, this leaves 12kwh a day.
These you buy at $0.1267, totaling $1.52 a day.
Do you see what has happened?
You now are paying just $0.32 a day for electricity instead of $2.15, a saving of $1.83 per day.
This adds up to $667 per year.
The likely cost of installing a 1kw system is around the $4,000 mark after the $8,000 rebate, meaning your payback period based on current electricity costs is 6 years.
Without this tariff it would be more like 15 to 20, big difference.
Now lets add the fact that power is likely to increase 30% in the next 18 months, this takes the kwh price to $0.165, or $1020 per year at 17kwh a day.
You savings then are closer to $900 per year, bringing your payback period to just over 4 years.
Does this all make sense?
Not only is solar power prevent 0.936kg of carbon dioxide per kwh from going into the atmosphere, is will also return you a big dollar saving in the not too distant future if this policy becomes a reality. SA already do it, QLD and ACT are on the ball too, it is fantastic to see WA starting to come out of the dark ages.
UPDATE: The policy announcement is now out, and is of course not quite as good as it first sounded, and somewhat embelished. Go Here to see it in full.
The main points to consider are that my figures are alot more accurate than their claims, unless the intend on writing cheques for power generated instead of using it as a feed in tariff. If they use a standard meter and payment system, you only get paid for excess sent to the grid, not every watt, as some of those watts don’t exit your home, they are used….the figures they have released work though if they just write you a cheque for 5kwh a day for 2 years….
Also they have a very conservatively low price for a system, and i would suggest you would struggle to find someone installing one for $10,000 less rebate, at least one where the parts aren’t cheap crappy Chinese parts. We use Sunpower panels which have the highest efficiency and best warranties on the market….
The other point is that they only pay the $0.60 until you have recovered the install cost, so it will be interesting to see exactly how this pans out, in reality they might as well just be giving a top up to the federal rebate…