Financial Benefits of Investing in Solar Energy
Solar energy is radiation generated by the sun. Solar power is what we create when we convert that energy into electricity. As a renewable energy source, solar power poses countless benefits to the environment. Using solar power lowers your carbon footprint. Less carbon in the atmosphere means a cleaner environment and gets the ball rolling in reversing the effects of climate change.
But how does investing in solar energy benefit you directly? Can installing a solar energy system on your home actually save you money?
Solar Power Systems for Your Home
Grid Connect Solar Power
Solar power systems are either connected to the mains electricity grid (grid connect) or stand-alone installations (off-grid). Almost all urban residential properties and businesses using solar power remain connected to the grid. That's because a grid-connected system will never lose power (unless there's a power out). Any time the solar power system fails to generate enough juice to power your home, mains electricity kicks in to plug the gap.
Off-Grid Solar Power
If a solar power system is off-grid, solar panels must generate 100% of the electricity used in the home. Solar panels cannot draw energy from the sun at night, so excess energy captured during the day is stored in a deep cycle battery bank. Off-grid systems are common in rural parts of Australia. Access to the mains grid in these areas is either impossible or too expensive for ordinary Australians to afford. But once an off-grid system is up and running it functions as your own personal power station. You'll never pay an electricity bill again!
Both types of solar power system save you money in several ways.
1) Solar Power Lowers Electricity Bills
Australia’s wholesale energy prices almost doubled between 2015 and 2017 and remain among the highest in the world. Calculating the amount of money you’ll save on your energy bill depends on factors like energy consumption; the rate of inflation; energy wholesale prices; average daily sunlight and the initial cost of investment. Most solar power systems promise a return on your investment within 3 to 5 years. After that, every kW of power you generate is a kW saved on your energy bill.
2) Solar Systems are a Long-Term Investment
If you’re able to cover the cost of your solar power system without borrowing, you’ll see a return on your investment within a few years. But that return is not static or temporary. The life-span of a 5 kW residential solar power system is 25 years. Considering the cost of wholesale energy is likely to rise in coming years, you could save tens of thousands of dollars in the long-term.
3) A Solar Power System Generates Income
Solar power systems can actually generate income. Using a grid connect system, any time your solar panels capture more energy than you can use you can export that energy back to the main grid. Your energy retailer will then pay you a “feed-in tariff” when you contribute to the local network. Solar panel owners can earn cash money or a credit to their energy bill every time they produce excess energy. Bonus!
4) Government Incentives Save You Money
Out of necessity, the whole world is looking for alternatives to the burning of non-renewable fossil fuels. To meet the energy needs of the nation, the Australian government has made Renewable Energy Targets (RETs) to increase the use of solar power across the country. Recently, a major investment came from The Department of Resources, Energy and Tourism. This government body committed $1.5 billion to create four large-scale solar power plants in Australia.
The government also rewards individuals who invest in solar technology. The Federal Government awards small-scale technology certificates (STCs) to any household that invests in a solar power system. You receive one STC for every megawatt hour renewable energy your system generates and the value comes off the initial cost of your system. You can even claim your potential STCs for the next 13 years upfront. But installation must be carried out by a Clean Energy Council accredited installer.
Solar power offers financial and environmental benefits that are difficult to quantify. What's clear is that renewable energy is the future and investing now can only lead to great things.