Note: This was written in 2016, but the general maths remains roughly the same. Panels are even more affordable, but exported power earns a bit less.
The Cost
I saw 1.5kW systems available for $2399, and they're even cheaper now.
The Savings
The Your Home guide says each kW of panels produces 1512kWh per year (here in Brisbane). For a 1.5kW system, that's 2268kWh in a year. So what's that worth?
Best case scenario:
Using the electricity yourself reduces the amount you have to buy.
Savings = 2268kWh x 25.586c/kWh = $580 (24.2% return)
Worst case scenario:
Feeding the electricity into the grid, at 8c/kWh
Payback = 2268kWh x 8c/kWh = $181 (7.6% return)
(Note: some providers offer less than 8c, so shop around for the best deal.
A 7 to 24% return on your money! As the Energy Matters report found, it's a better investment that property or shares.
That financial return is part of the reason why I encourage people to get solar panels. Of course the other part is that we can play a direct part in increasing the amount of renewable energy in our country.
A Note About Tax
If you're comparing this other investments, remember that bank interest (or share dividends) are taxable. So to get the same 7 to 24% from a bank account, the bank would have to offer 11 to 37% interest to be as good as the solar panels (if you're in the 34% tax bracket).
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PS. Obviously, I've based these calculations on the conditions in my location of Brisbane, Australia. Sunshine, electricity price and panel costs may vary from location to location.
PPS. Larger systems can also be more cost effective, as the price (per panel) is less.
