How did I not know solar panels can make me money in NSW?

[Fresh Bread]

I'll spare you the roundabout way I came to this conclusion, here's the short(er) version.

We are building a second dwelling under the NSW SEPP and putting a large (5.94kw) solar array on the roof. We'll be moving in and renting out the primary dwelling. I had previously thought we'd get a battery and be self sufficient for power and do our bit for increasing the % of renewables in Australia.

However, I've since realised that it's not all that great embodied energy wise to get a battery PLUS (and the reason I am posting this) I can sell unused power for 21c / kwh, not 8c! In fact, if I buy a new system through Origin they will give me 25c/kwh for the first 2 years.

Since we are low power users we will end up with credit on our power bill of about $400 a year or more. That gives me an annual return on the capital outlay of $400/$6500 or 6%, excluding the value of the PV power I will use myself. That's a similar rate to money I loan out to green projects on Ratesetter, doh.

How did I not know about these feed-in tariffs?? It's called Solarboost and it's with Origin but I presume there are others offering similar (to make up their renewable quota?). I know FITs used to be high via government subsidy, but then that got stopped...

In the primary dwelling we only have a 1.5kw system so moving to the 21c contract would only save $40 a year. So I don't feel *too* bad about not knowing about it already. But still, I've never seen ANY reporting or ads for this special rate/ contract.

So if you have a north or west facing roof and can fit 5kw of power (we are actually getting 5.94kw for that price), I would look into this. I will definitely whack another 5kw on the main house should we ever move back in, or possibly even do it before for environmental reasons.

[marty998]

I love this. Well done for figuring out!

Sometimes I think they deliberately make it complex so no one can take advantage of it.

[lollylegs]

thanks for posting this, will have to look into it. We are low users also and last time we got a quote the calculated it would take us 8 years for it to pay for itself so we decided to wait a while but this sounds like its worth finding out about.

[Fresh Bread]

thanks for posting this, will have to look into it. We are low users also and last time we got a quote the calculated it would take us 8 years for it to pay for itself so we decided to wait a while but this sounds like its worth finding out about.

So it would still be a long pay off period of 8.5yrs for us, including the value of the free power. But the fact that we'll actually get a credit, be paid, is a game changer. I think we might be at some sort of tipping point. 

I'll have to look into it but I can only think that there is demand for renewable power from big players since they have to provide for people that ticked the 100% renewables box.

[Little Aussie Battler]

I haven’t given this much thought, but don’t you also have to factor in depreciation on the panels/equipment?

And how is the ‘return’ treated for tax purposes? The portion that neutralises what would otherwise be your standard bill should be quite favourable, and it offsets a post-tax expense. Is the rebate above that paid as cash and subject to tax?

[Fresh Bread]

I haven’t given this much thought, but don’t you also have to factor in depreciation on the panels/equipment?

And how is the ‘return’ treated for tax purposes? The portion that neutralises what would otherwise be your standard bill should be quite favourable, and it offsets a post-tax expense. Is the rebate above that paid as cash and subject to tax?

Yes I think all your points are correct. I'm hoping my panels last 25yrs or more so what if I do:

6500/25yrs = $260
So I need to take that off the income before I work out the return, yes?
$400-260= $140
$140/6500 = 2%

Not great if you're comparing to Vanguard or similar.

However if I add back in my $x a year of free power (I'd have to look it up but it's a few hundred $), we are probably back at a decent return of 6-7%. [Edit: just looked it up and it's somewhere around $260-280 so I'm back at 6%. Please say kindly if my maths are wrong!]


ETA: I don't know the answer about the tax. If I ask my accountant he'll probably just say, I'm sorry I didn't quite hear the question, let's move on.

[Fresh Bread]

I should just add that I am all about spending what I need to to do the right thing environment wise so the finances on installing PV don't have to be comparable to proper investments. I was just posting because it seems like it is a way way better investment to make than it used to be, because of these FITs I had absolutely no idea about.

[Kyle Schuant]

Bear in mind that in many cases, if you have a grid-connected solar system, you move onto variable pricing. So the electricity you use 4pm on a 40C weekend may cost you more than the electricity you use at 1am on a 15C night.

This does not apply to all deals, look closely at yours and question them suspiciously.

[Fresh Bread]

Bear in mind that in many cases, if you have a grid-connected solar system, you move onto variable pricing. So the electricity you use 4pm on a 40C weekend may cost you more than the electricity you use at 1am on a 15C night.

This does not apply to all deals, look closely at yours and question them suspiciously.

Good point. I currently have solar yet have a flat rate. I was expecting to have time of day charging but it didn't happen. I'll look at the solar boost deal again to double check.

[Fresh Bread]

Bear in mind that in many cases, if you have a grid-connected solar system, you move onto variable pricing. So the electricity you use 4pm on a 40C weekend may cost you more than the electricity you use at 1am on a 15C night.

This does not apply to all deals, look closely at yours and question them suspiciously.

Good point. I currently have solar yet have a flat rate. I was expecting to have time of day charging but it didn't happen. I'll look at the solar boost deal again to double check.

So I had a look at the Solar Optimiser, which has the 21c FIT. My search gave me 3 Solar Optimiser options - 2 had time of use rates, one said it had time of use rates but they were all the same (29.52c). I can't say I understand why there are three Solar Optimiser plans for my postcode. 

The plan with the 25c FIT is called Solar Boost Plus and I can't find any publicly available pricing plan.

[Fresh Bread]

Here's a handy website that has all the FITs by state:

https://wattever.com.au/retailer-solar-feed-in-tariffs-by-state-and-territory/

Currently in NSW, Origin have the best FIT at 21c and Enova are second with 16c. However their daily use fee is 168c a day and the 16c FIT is capped at 6kw output. Then your FIT drops to 9c.

I will check with Origin about a cap. That would change the numbers obviously.

[Kyle Schuant]

It's as bad as fucking mobile phone plans here.