Return on Investment for Sydney Solar Systems

91% of the analysed households would not
recover the real cost of the solar system

ReturnOnInvestmentAgainstSolarSystemSize

Optimum Solar System Size

For every household there is an optimum solar system size that maximises the financial return they receive from the installation of a solar system. The optimum size depends on the:

  • Amount of electricity the household uses during daylight hours
  • Cost of electricity and
  • Cost of the solar system.

Installing a solar system larger or smaller than the optimum size reduces the long term financial benefits the household receives.


roi

Optimum Solar System Size for typical Sydney households

Most households do not have access to the detailed information required to calculate the optimum solar system size. Their decision to install a solar system is based on an assumption that annual savings from the installation of a solar system will recover the cost of the system. The analysis reveals that this is no longer the case.

Measurements from 300 Sydney households were used to calculate the optimum solar system size. Plotting the long term Return on Investment for each of the 300 households showed only 9% recover the real cost of the solar system


Discussion

Several factors contributed to the lower than expected number of households benefiting from the installation of a solar system:

  • Introduction of Retail competition has resulted in lower electricity prices
  • The average cost of solar systems has risen
  • The analysis uses actual solar system outputs (which are 10% lower than the theoretical values)

 

Download Full Article

Comments or Questions?

The author is happy to receive comments or questions about this article. He can be contacted here

Citation

Copyright of this article remains with Dr Martin Gill. All references to this article should include the authorís name and website www.drmartingill.com.au