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Why Should I Consider Buying a Photovoltaic System in Canberra?
Reduce your carbon emissions
Feel less guilty for being part of the planet's problems
Insulate your household against rising energy costs
Earn an income from Canberra's generous Feed-in Tariff
Is a Photovoltaic System a Good Financial Investment?
Canberra's Feed-in Tariff turns an awful financial investment into a reasonable financial investment. Few hard-nosed businessmen are likely to rush out and buy photovoltaic panels for their house but other factors improve their appeal. People wanting to do something tangible about climate change might consider a photovoltaic system. Before jumping into a photovoltaic system, consider these other more cost effective options first:
Install solar hot water (reduce household electrical consumption by nearly a third)
Install home insulation (ceiling batts, double glazing, curtains with pelmets, external window awnings, underfloor insulation, wall insulation etc)
Switch to an energy efficient pool pump (it makes a huge difference and costs very little. Check out this one: Hurlcon P300)
Install a heat pump in place of a conventional electric heater
Subscribe to a Green Energy program through your local electricity supplier. The small premium you pay directly funds grid-connected renewable energy
Replace your halogen down lights. Halogen lighting looks great but is wildly inefficient, producing enough waste heat to cause house fires (really)
Each of these options represent smaller investments than a photovoltaic system, while also realising a better carbon-reduction return on investment. By tackling these items first, your consumption of electricity will be minimised. Any investment in solar power will offset a larger fraction of your remaining electricity bill.
How Does a Photovoltaic System Work?
Ordinary sunlight shines on special panels that generate electricity (magic isn't it?). There are no moving parts and virtually no maintenance. A device called an "inverter" converts direct current (DC) into alternating current (AC) and also adjusts the voltage to suit the grid. An electrical meter measures how much electricity is contributed to the grid.
What Are the Risks When Buying a Photovoltaic System?
For a complete list of risk considerations, please refer to the separate section on this website entitled RISK.
How Much Electricity Can I Make?
In Canberra, the size of your system is primarily limited by the availability of suitable space on your roof. While your budget is important, the Feed-in Tariff will help with loan repayments, and takes some of the pressure off the financials - see the next FAQ, "How Much Will a Photovoltaic System Cost?". A suitable space is one that faces the sun for at least part of the day. Shade from structures such as buildings or trees must be limited. Roofs that face North are ideal. Roofs that face North-East or North-West are also fine. For example, my roof faces seventy degrees away from North and is still viable.
How Much will a Photovoltaic System Cost?
Live-in home owners in Canberra typically qualify for the Feed-in Tariff. The Feed-in Tariff is a generous scheme that pays above-market rates to households for any electricity produced (regardless of household consumption). The financial return is proportional to the size of the system, so the correct questions to ask are:
How large a system can I fit on my roof (maximum of 10Kw)?
How big an appetite do I have for financial risk? Buying a photovoltaic system costs a lot of money. You may need a loan. If you do, interest rates are likely to fluctuate over the term of the loan. This exposes you to financial risk. There are other risks. See them all here in the separate RISK section
Will I get Rich?
No.
Will I become wealthy?
No.
Will I Break Even?
I am pretty confident of that. If you can pay cash, you'll be fine. For the rest of us, the Feed-in Tariff may service the loan, but is unlikely to turn much profit until the loan is paid off. I extended my mortgage to buy the system. This was the cheapest way for me to buy the panels. If you can pay for some of it in cash and the rest as a loan, you can reduce your exposure to financial risk. See the next section entitled Metering and Billing for more on financials. Before you do, you may be interested to review the real world return I have experienced first hand. Check out this link:
Metering and Billing
When a household invests in a photovoltaic system, it ends up with two electrical meters; the original meter it always had, and a new meter to measure electricity generated. The two meters are unrelated and work independently. The important thing to understand is that the household will continue to draw all its energy from the grid, all the time. At no time does the photovoltaic system directly supply the household. It supplies the grid. The new meter measures this contribution to the grid and the household is paid in full for that contribution at the Feed-in Tariff rate.
For this reason, the standing arrangements for the supply of electricity to your household will continue uninterrupted. If you presently pay $2,000 per annum for your electricity, you will continue to be charged this amount. As electricity prices go up, so will this bill. However, you will also be earning an income from your photovoltaic system. At the time of writing this, the rate is about four times the going rate for grid-supplied electricity. So in our example, a photovoltaic system that makes as much electricity as the household uses would earn $8,000, but be charged $2,000 for grid-supplied energy, netting $6,000. In many cases, this profit would be used to service a loan.
The other good news is that over time, your investment will improve because at some point the loan will be paid off. At that time you have no liability yet you'll have an ongoing income stream. Quality photovoltaic panels last around forty years. Inverters do not last as long. Good inverters last between 10 and 20 years before needing repairs or replacement
Won't a Grid-Connected Photovoltaic System Endanger Linesmen When They Perform Maintenance?
No: they've thought of that. The inverter can detect when the grid loses power (for any reason, including maintenance). An automatic circuit within the inverter cuts the connection to the grid until the grid has power again. This protects linesmen against accidental electrocution from a photovoltaic system. When grid supply resumes, the inverter reconnects to the grid.
When the grid is down, so is your supply of electricity. When the grid is down, you won't be able to earn any income, regardless of how beautiful and sunny the day is.
Isn't the Feed in Tariff Unfair to Poor People?
The ACT Government's Feed-in Tariff pays a premium rate to households that invest in photovoltaic systems and wind turbines. This stimulates private investment in alternative energy sources without waiting for government funding (i.e. the tax payer). The premium is funded by a small increase in the cost of grid-supplied electricity to all customers, even poor people. Not all households are able to prioritise investments in alternative energy and so are disadvantaged, however all households are effected by global warming.
Some households can and do invest in alternative energy, despite exposure to financial risk over many years. These investors are rewarded with a premium price for their energy. This premium helps to repay the loan used to buy the system.
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