Residential home owners and business owners are still flocking to solar even without feed-in tariffs.
With the latest drop in interest rates, along with expensive prices for electricity, solar is a very attractive investment. Even though there are very limited feed-in tariffs, solar may be anywhere between 15 – 22% on its investment depending on your method of payment and energy tariffs.
For example, a 3kW solar system worth $5,800 will save the average family approximately $1,100 per year in electricity that needs to be purchased from the energy retailer. That is a return of about 19%. This looks very attractive in comparison to the average term deposit rate of approximately 3% which the banks are offering.
Furthermore, home owners now have the opportunity to redraw from their home loans at rates as low as 4.75% to invest in solar for their house. This provides them with a return up to 22%.
“It is seriously a no-brainer if you can use the banks money at 4.75% and solar could make returns of 20%” said John Horan, Director of Horan & Bird.
“Get advice from your accountant, but business owners can also claim the interest which makes the returns even greater”.
Landlords are also installing solar on their investment properties to attract tenants.
It is important to know that although the solar panels come with a 25 year warranty, they still require maintenance and cleaning. Even after taking the required regular maintenance into consideration, the return on investment for solar remains extremely attractive. Over 1.3 Million homes in Australia are now benefitting.
Important information: These calculations are estimations only and you should consult with your accountant or financial advisor for advice.