Cheaper solar putting power through the roof

PRICES of solar energy systems and battery storage are falling, and have sparked a fresh wave of investment in renewable energy in households.

It’s not only homeowners who benefit – property investors and tenants can share in solar savings.

Latest figures show that a solar system that cost more than $20,000 earlier this decade now sells for around $5000, and battery prices also have dropped sharply.

Installations rose 30 per cent last year and record capacity is again expected this year as solar use spikes after a quiet five-year period that followed axing of generous government feed-in tariffs.

“You are looking at around $1000 per kilowatt of capacity now – you can get a 5kW system for $5000,” said Origin Energy’s group manager of business, solar and energy solutions, Lyn Bowring.

“The biggest barrier for people going solar is the perception that it is too expensive,” she said.

Energy companies are offering incentives such as flexible ownership options and zero-interest loans to get people to sign up to solar. They also pay money to households that export power back to the grid, but this varies between states and is nowhere near as much as the 40c60c per kilowatt hour paid by some governments early this decade.

Ms Bowring said battery systems had “changed the game” by giving people the ability to collect energy during the day that powers at night.

“Cost is an issue at the moment for a lot of people. Having said that, the costs already have come down quite significantly. You will see that follow the same kind of curve that solar systems did.”

About 1.8 million households now have solar panels and many are upgrading to larger systems for a fraction of the price they previously paid. “A lot of people installed 1.5kW for the price they could buy 5kW now,” Ms Bowring said.

Falling prices have made solar systems more appealing to both landlords and tenants. BMT Tax Depreciation chief executive officer Bradley Beer said forward-thinking investments such as solar systems increased an investment property’s attractiveness and generated tax deductions.

“Solar investments can reduce the environmental impact of a rental property while enhancing the appeal of a property due to the prospect of reduced energy bills,” he said.

“Rising energy costs in many markets may see more and more investors upgrading their properties with solar. The associated depreciation deductions and the increase in rental yields may further the case for a solar investment.

“A solar power system that cost $5500 …can attract a first year deduction of around $550 or 10 per cent of the cost price.”