In 2014, the Australian Bureau of Statistics reported that 1 in 5 Australian households were using some form of solar power, whether that be in the form of solar heating or solar rooftop panels. With increasing concerns about climate change and the cost of electricity sky-rocketing, it makes sense that households would be turning towards more renewable sources of energy.
Solar energy is one of the most affordable kinds of renewable energies, and therefore one of the most popular. But how does it work? How much will it cost you, and how much will it save you? And, most importantly, will it add to the value of your property?
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Rooftop solar panels convert energy from the sun into electricity, so you are effectively able to generate your own power. They work best when facing north, and during the times of the year when the sun shines brightest. While this does mean they don’t work at night - so you’ll need to revert to using ordinary electricity - they will work wonderfully for you during the summer months, when you’ve got the air-conditioner and all the fans going during the hottest part of the day, therefore saving you loads off your electricity bill.
Once installed, rooftop solar panels require little maintenance. They have no moving parts and, if correctly installed, are typically quite reliable. Depending on the quality of the system and on the installation itself, you can expect your solar rooftop panels to last for between 20 to 30 years.
The cost of your installation will depend on the how much wattage you’re hoping to generate, and therefore the size of the system. Fortunately, installation prices have dropped significantly over the last few years. Once upon a time, it could cost you $10,000 to install a 1kw system, but now a 3kw system - a good size for the average home - can cost you between $3,400 - $5,600, while a slightly larger 5kw system can cost between $4,900 - $8,000.
While this may seem like a lot, consider how long they last, and how much you’ll likely save on electricity bills after they’re installed.
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Of course, how much you’ll save on power will depend on your usage, where you live and how much you’re being charged.
On average, Australian households use around 6000kW of electricity per year, that's between 16 and 18kW a day. If you’re a family living in Bondi Junction, for example, and 60% of your 16kW usage is between the hours of 9am and 5pm, a 2.5kW solar panel system could potentially save you up to $730 on your power bill annually. Over 5 years you could save $3,650. By the 6th year you likely would have recouped the amount you spent to install the system, and by the 10th year you could’ve saved more than $10,000 on your electricity bills.
Many lenders will allow you to get cash out from your home loan to cover the cost of installing solar panels. Though you'll have a longer loan period or higher repayments, the money you’ll save on electricity bills should help. As always, we recommend you speak to a Home Loan Specialist before making any decisions.
Additionally, some state and territory governments do offer incentives to households that install renewable energy systems like solar rooftop panels. In Australia, rebates come in the form of small-scale technology certificates, which may be redeemed to help refinance the cost of installing the renewable energy system. How much these STCs may be redeemed for depends on supply and demand, which fluctuates on a daily basis, but you can generally expect to get about $30 - $40 per certificate.
Certain states also offer feed-in tariffs to people whose systems produce a surplus of power that is returned to the grid, though these are becoming less common.
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The short answer is yes.
A recent survey conducted by Origin Energy revealed that 85% of Australians thought solar panels added value to property. With electricity prices only increasing, people are naturally looking for ways to save money on the bills. Having a solar panel system installed is one such way to save.
The size of the installation will influence how much value is added. Generally, the more panels installed, the greater the increase on the property’s value. Some estimates put the increased value from a 5kw installation at approximately $29,000.
More and more people are turning towards renewable sources of energy, and solar power stands out among the rest. Not only is it a clean source of energy, it’s also quite affordable, and will ultimately save you (or your tenants) money in the long run. If you’re looking for something to give you an edge on the property market, whether you’re an investor or you’re looking to increase the value of your own property, or you’re simply hoping to save on your electricity bills, solar panels may prove to be a good investment.
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