Falling cost makes solar panels tempting

Last updated 05:00 08/05/2012

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Investors are tossing up whether to invest in state-owned electricity company floats or install solar panels kits in their homes, according to the micro-generation industry.

Brendan Winitana, chairman of the Sustainable Energy Association, said the cost of installing solar photovoltaic panels had dropped by close to 50 per cent over the past 18 months, as manufacturers liquidated stock in the face of lower subsidies in Europe.

The price drop meant the technology was increasingly being seen as a prudent investment, rather than a green initiative. "We have individuals coming to us and saying, 'give us the key reasons why we should invest in this technology, versus, say, dropping 10 grand into the Mighty River float', and whether they're going to get a better return."

According to the association, a 2.5 kilowatt solar pv system costs about $8000 to install but at current electricity prices saves an average $648 a year, generating a return of just over 8 per cent.

Larger systems could return about 9 per cent, Winitana said.

As well as households, companies were also increasingly looking to install solar panels on commercial buildings, for fiscal, rather than green reasons. "For commercial customers, the whole green thing is a driving factor, but it's not the main driving factor. It is about the saving, it is whether the decision stacks up from a commercial perspective."

The association's recent survey of its members predicted 170 per cent revenue growth over the next five years.

Ewan Gebbie, executive officer of the Energy Management Association, said its analysis showed that solar panels on roofs were certainly cost effective in areas such as Northland and Gisborne, where sunlight was strong and electricity tariffs were high.

Gebbie said if electricity costs continued to increase it would not be long before installations became standard in new buildings in most parts of the country.

"It's definitely coming into play; the tipping point is certainly getting close."

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- BusinessDay.co.nz


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