Why leasing your solar power system makes sense
One of the barriers to installing a solar power system is the upfront cost.
But rather than coming up with a large sum of money, there is now a more affordable way to join the one million Australians with their own solar photovoltaic roof system.
It's quite simple - you lease your solar power system and pay it off over a number of years.
Australians have spent around $8 billion on solar systems and over the years solar panel prices have come down to a quarter of what they once were.
"Basically, with the price of panels reducing so deeply over recent years, it is now possible to go solar with no upfront cost through a leasing arrangement that can deliver upfront cash flow savings for homes and businesses from day one," explains Mara Bun, chief executive officer of Green Cross Australia, an environmental NGO with that helps people adapt to a changing climate.
Green Cross, with around 300,000 followers, has launched a campaign called Every Rooftop to promote solar leasing with solar company Ingenero.
For every solar system leased through everyrooftop.org.au, the environmental group receives a commission of around $100 to $200, depending on its kilowatt size, to support its environmental education program.
In many instances, you can save money leasing if your combined leasing payments and night-time connection to the grid are lower than your current power bills.
For example, Ingenero presents the case of Peter who installs a five-kilowatt solar system on a sunny north-facing roof in Wagga Wagga.
It will cut Peter's power bills substantially.
Even after the lease payments of $1838 in the first year, Peter saves $2316 on his power bill and will be $478 better off. This is because Peter's power bill before solar would be $6312pa and after solar it will be $3996. Over 12 years, the life of the lease, Peter will save $10,811, assuming the average grid power rate is around 31.9c per kilowatt and rising 5%pa.
One of the advantages of leasing is that consumers will know what they are going to pay for day-time power, regardless of energy price rises, which have been steep.
In Sydney, for example, prices have risen by 140% over the eight years since 2005, the sharpest rise of any major city (London had the next highest, up 95%.).
"Taking up the Energy Access solar lease has allowed us to lock in a percentage of our costs for the next 10 years," says Pat Shields, owner of Wagga Wagga-based Shields Painting and Decorating. Ingenero also takes care of the maintenance and repairs of the solar system for the life of the lease.
It is important to remember that the efficiency of your solar power system depends on where you live in Australia and your orientation of your roof to the sun.
For example, a solar system on a sunny north-facing roof is going to generate more power - and make the leasing deal more rewarding - than one on a south-facing, partly shaded roof in one of the less sunny states.
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