How Solar Systems in Australia Can Make You Money: Solar Payback Period

Investing in solar energy is a sound financial decision, especially with ever-increasing prices of electricity and supportive government policies. Solar systems in Australia are being positively embraced by many home and business owners as a means of reducing energy costs in the future with iGreen Energy. One of the first questions most customers want answered is how long it will take to recoup the investment.

This blog will give you the good news about the solar payback period so you can make an informed decision.

The Solar Payback Period is Explained

The solar payback period is the time it will take for your energy savings to equal the upfront cost of buying a solar system. In simple terms, reaching this point means the generated electricity of your system is free, except for some maintenance.

When it comes to Australia, the average payback period is 3 to 6 years. This can change depending on system size, energy usage, location and government incentives. The good news is that most systems last 25 years, meaning your savings will be considerable years after this period.

Key Factors That Impact the Repayment Period for Solar Energy Systems

Size of the Solar Energy System in Relation to Energy Use

• Extensive systems cut down on the need to rely on the grid for electricity. Systems set up in homes or businesses with high energy usage during the day will have quicker payback periods as more of the generated electricity is consumed.

Cost of Electricity

• With high electricity tariffs, more savings are realized with each kilowatt-hour generated. With the high and rising prices of electricity, the worth of installing solar power systems is even higher.

Available Sunlight and Geographical Location

• There is no shortage of sunlight in Australia. However, there is still varying solar energy production based on the different regions in the country. Faster payback periods are recorded in areas with more solar energy.

Government Funding and Assistance

• Bringing down the installation costs with programs like Small-scale Technology Certificates (STCs) makes payback periods shorter.

A Comparison of Payback Periods: Residential vs Commercial Solar

Payback Periods for Residential Solar

The average homeowner with residential solar has a payback period of 3-5 years, depending on the usage of the household and the size of the system installed. Families that operate appliances when it is daylight will definitely be able to pay off the system in a shorter time period.
 

Payback Periods for Commercial Solar

In 2-4 years, businesses may pay off the system and stay even longer with some costs for the following reasons:

• Higher daytime usage of power

• Larger system size

• Tax and other depreciation benefits.

These reasons make commercial solar a very attractive option for warehouses, retail stores, and offices.

The Long-Term Benefits of Solar Savings

The benefits will continue to add up after the system has paid for itself. A system that has been properly designed and has a good lifespan will save the owner tens of thousands of dollars.

iGreen Fenergy will continue to hold benefits, including:

• Less future price unpredictability regarding electricity

• Improved property value

• Business operating costs will be cut, and therefore, energy estimating will become a thing of the past.

These reasons continue to increase the popularity of solar systems in Australia because they are increasingly viewed as long-term financial assets instead of costs.

Getting Your Solar Partner Right

While sunlight is one of the most important factors to consider for a quick payback period with solar, there are other factors such as system design, quality of components, and expertise of the installers.

The payback period can be made shorter by the experienced providers of iGreen Energy solar solutions Australia, as they understand how to optimise your system for performance, efficiency, and longevity.
 

Using a professional company to conduct an assessment can be a huge advantage because they understand how to factor in the slope of the roof, shading, and your goals for your energy consumption to determine if you want to be energy self-sufficient and if you want to add to your system in the future.

Mistakes That Can Cause a Longer

From the choices that most people make without being aware of it, we can cause our payback period to be delayed even longer

• Making choices based on system cost only

• Not considering an energy usage study

• Installing a system that is small or large

• Making poor choices for panel and inverter placement

By avoiding the mistakes mentioned above by iGreen Energy, you can determine how quickly you will start to see a return on your investment.

Frequently asked questions

1. What is the cost recovery duration for solar in Australia?

• Most systems take three to six years to recover costs. This time frame is based on usage alongside any financial incentives provided.
   

2. Does including a battery lead to a longer payback period?

• Batteries do lead to longer initial costs, which results in longer payback periods; however, they do offer more energy independence.
   

3. Is solar worth it if there are no incentives?

• Yes. Regardless of incentives, savings in the future make solar financially sound.
   

4. Does system maintenance influence payback?

• System maintenance contributes to savings by preservation of efficiency.
   

5. Is solar a viable option for small businesses?

• Yes, as long as the daytime energy usage is consistent.

Prepped to figure out your solar payback period and begin your savings?

Inquire now to start your journey towards smarter energy. Get in touch with iGreen Energy to get your personalized solar assessment and see how soon your investment can start providing you with actual returns.