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Graph of the Day: Rooftop solar returns outstrip stocks, property

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Today’s Graph of the Day comes from leading Australian solar provider Energy Matters, which has released a table that compares the return on investment on rooftop solar in various state, and compares these with shares, property, gold, global fixed interest and fine art.

As the table shows, based on the assumptions made by Energy Matters, rooftop solar easily outperforms all other investment options, although the solar returns do vary from location to location.

The northern Queensland city of Townsville was rated the location with the highest return (21 per cent), courtesy of its hours of sunshine, the cost of solar PV, the local electricity rates, and the level of government support.

“Australians are constantly looking for the best place to invest their money, yet these figures show they’re overlooking one of the best around, and it’s right above their head,” co-founder Nick Brass said in a statement that accompanied the graph. “The upside to solar investment is its green credentials. For many clients, this is a strong secondary motivator.”

(Please click on graph to enlarge).

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  • Stan Hlegeris

    I reckon there’s a simpler way to look at this.

    Suppose you want to make an investment which will deliver to you an after-tax return of $2800 per year. One choice would be to buy 10,000 Telstra shares, at a cost of about $52,000 at today’s share price.

    Another way would be to install a 5 kilowatt PV system. Forget about Feed-In Tariffs and all that. Just focus on saving 30c or so on each kilowatt-hour you generate for yourself. This will deliver a reduction in your electricity bill of around $2800 per year. How much will it cost you buy such a PV system? Around $7,000.

    There might be a better investment choice than a PV system, but I don’t know what it is.

    • RobS

      I don’t see how that’s simpler than simply quoting the rate of return for each investment as they have done.

  • Addy42

    I am in the situation where I can export power to the grid for more than the price of off-peak power. I would like to be in the position to store grid supplied off-peak power to battery pack, to use during peak periods. Is this possible. I anticipate being in this position for a number of years.

    • Stan Hlegeris

      Addy–

      That would make great sense for the electricity suppliers, as you’ve committed the capital required to provide storage and deliver a load-levelling service.

      However, you’ll find that the retailers, generators, and regulators are all dead-set against you on this one. Collectively they have no idea of how to make the grid work in the future; for the moment all they know is that they hate sensible proposals such as yours.

      • Martin

        What does that mean “dead-set against it”? I don’t know of any jurisdiction in Australia where Addy’s idea would be illegal. And in outback WA Horizon Power actually often requires you to add battery storage if you want to connect a PV system to the grid.

    • Martin

      Yes, this is possible. But be aware that in most jurisdictions you are not allowed to feed back into the grid from your batteries. Otherwise, no problem. Whether it makes financial sense is another matter.