Interested in installing solar cells on your roof?

Some points to consider...

Technological progress

The technology has a way to go.  Advances are being made all the time, and as the market expands the products get cheaper.  But it is still an expensive way to make electricity compared with fossil fuels and wind power.  It likely will be cheaper than coal one day, sooner if a carbon price is introduced, but it's not there yet.  So please don't go into this expecting to make or save a lot of money.  However, if we all waited until the technology were perfect it would develop much more slowly.

Both state and federal governments therefore rightly subsidise the technology, as described below, to help it during these early stages. 

Renewable Energy Certificates (RECs)

To promote solar power, the Federal Government grants RECs based on the electricity your system is likely to generate.  Electricity companies have to buy RECs to meet minimum percentages of renewable energy mandated by the government.  So you can sell your RECs (the price varies with supply and demand) to offset the cost of your system.  But please bear in mind that by doing so you are allowing an electricity company to emit more greenhouse gases.

Typically, the RECs might amount to 10% of your system cost.  You may be eligible for a 'five times' REC multiplier.  The multiplier is set to reduce each year, starting with a drop to 4x in July 2011.

Suppliers and installers promoting their services assume you will sign the RECs over to them, so the price they quote will normally be already discounted on the basis of the maximum multiplier.

For more information see http://www.energymatters.com.au/carbon-trading/recs/index.php

Feed-in tariff

Feed-in tariffs allow you to sell the electricity your system makes into the grid.  There are two types, gross and nett.  A gross tariff pays you the feed-in rate for all the electricity your system makes, and charges you at the standard rate for all that you use.  So if the feed-in rate is higher than the standard rate you still make money even if you use all that you make.  With a nett tariff, what you make you use free of charge, but you will only be paid for the excess you feed into the grid.

The NSW Government had a generous 60c/kWh gross feed-in tariff, but it proved so popular that the funding ran out early and it was cut to 20c/kWh.  With the rising price of electricity (mostly to pay for upgrade of aging infrastructure) that's comparable with the standard rate, so it became effectively a nett tariff.

For further information see http://www.energymatters.com.au/government-rebates/feedintariff.php

Suppliers and Installers

 

A list of accredited designers and installers can be found here:  http://www.cleanenergycouncil.org.au/cec/accreditation/Solar-PV-accreditation.html

Some groups provide discounts by doing bulk purchases.  See http://www.energycoop.com.au/content/index.php

How big a system?

Since the economics are hugely affected by the government subsidies, the thresholds in those drive the choice of system size.  Within that, larger systems will generally be more cost-effective.  You'll never be self-sufficient since it won't generate electricity at night.  Sufficient batteries would be very expensive, and may even be disallowed by the conditions of the subsidy.

For each kW of installed system, a Sydneysider can expect 5.1kWh per day averaged over a year.   Average Sydney household consumption is 14kWh/day.

Planning permission

Your council will have requirements for the installation of a solar photovoltaic system on your rooftop.

In the Leichhardt municipality Solar PV panels are covered under the Development Control Plan 35 - Exempt and Complying Development. If all the requirements are met you do not need to put in a Development Application. If, however, the house is within a heritage conservation area, which much of the Balmain peninsula is, then you may need to put in a DA. The heritage areas can be seen on this link.

http://www.leichhardt.nsw.gov.au/Plans-and-Development-Control.html.

Call Leichhardt Council for more information: 9367 9222

See also http://www.energymatters.com.au/index.php?main_page=news_article&article_id=849

Suitable sites

Obviously the roof needs to be more-or-less north-facing.  The ideal orientation depends on daily weather patterns, e.g. drier air in the morning. 

In Sydney, the ideal tilt angle is 24 degrees.  Most roofs are close enough to this not to need any additional framework.

Shading must be avoided.  Uneven shading costs a disproportionate amount of power and can damage the system.

For more information see http://www.yourhome.gov.au/technical/fs67.html

The Economics

With no rebates (RECs), a 2kW system will set you back about $15000.  Generating 10kWh/day at 20c/kWh it will be worth $730/year.  So it will pay for itself in 21 years, which might well exceed the life of the system. 

OK, it's not quite that simple.  Electricity prices will increase, on the other hand you could have invested the $15000 and earnt interest.  If we guess that electricity will go up 7% p.a. and the bank pays 3% p.a. after tax, the break even time drops to around 16 years.

Throw in $5000 of rebate (or equivalent drop in price) and it pays for itself in a bit over 11 years.