The Government grant for solar installation will be reduced by 20% in July 2011 (an approximate reduction of $1200). This reduction in government support will mean that solar will become more expensive to install after 1 July 2011. The rebates will continue to decrease until 2015 when rebates will no longer be offered, as the Government believes solar prices will have decreased enough to be affordable.
To make your life easier in deciding what system is suitable for you and in fact whether you feel it is a worthwhile investment, we have created a solar calculator that takes into account your changing electricity consumption or production and the financing costs of installing. We have built the solar calculator so you can estimate what you think will be the increase in the cost of electricity into the future. The higher you think electricity prices will increase the more you will benefit by installing solar.
The current solar credit scheme applies to the first 1.5 kilowatts of capacity installed for systems connected to a main electricity grid. The current system uses a multiplier of 5 to the renewable energy credits (REC’s) for the first 1.5 kW of power generated and a multiplier of 1 for any power generated greater than 1.5kW. After the 1st of July, the initial multiplier will be reduced to 4 and as such will cause all systems to increase in cost by approximately $1200.
When purchasing a solar system the solar installer generally buys the solar credits from you and they sell them through a clearinghouse, established by the office of renewable energy. The purchase price offered to you accounts for this subsidy and assumes a certain rate they can sell the REC’s for. Therefore, if the rebate provided via the solar credit scheme reduces, the purchase price will increase proportionally.
On an ongoing basis you will either reduce your household consumption of electricity, or you may feed power into the grid from your house and be reimbursed for this from the state’s “Feed in Tariff” (FIT). The feed in tariff is a premium which reimburses you for any solar energy that goes back into the grid. In Queensland, the feed in tariff is 44 cents per KW up to 10KW of panels. Some electricity suppliers will pay you your standard rate (approximately 16 cents) on top of this (you will need to check with your supplier to see if this is the case). Interestingly, you get paid far more for electricity you feed into the grid than what you are likely to pay when consuming it, 44cent to approximately 19c per kw for consumption. All of these variables can be changed in our solar calculator to meet your specific requirements.
In the end, the decision to install will be affected by your opinion on increasing electricity prices and will largely depend on your energy usage and purchase price. The one sure thing is that after 1 July the cost of installing solar will increase. So if, after using the solar calculator you think solar is worthwhile you might want to act fairly quickly to be sure your system can be installed before the cut-off date.
If you are considering financing, we can refer you to a lender to discuss your specific requirements and who can make recommendations appropriate to your circumstances. We can also conduct a debt review to determine if incorporating the cost into your home loan is an appropriate option.
If you would like to obtain a quote or receive advice from a reputable solar specialist please contact Jason Meiklejohn from ICE Solair on 0414 184 794 or email on email@example.com . While Mango Wealth Creation does not take any responsibility for your dealings with ICE Solair, having a couple of our clients and myself experience his service we are more than happy to recommend their service.
Click here to access our solar calculator
Please note our solar calculator has been built based on our knowledge and does not include all the factors to take into account in the decision to purchase a solar power system. It is intended as a guide only and you should not rely on this in your decision or not to purchase a system. Mango Wealth Creation do not warrant its use and is not responsible for any use of the tool or reliance on it.