How much does your solar panels cost on an quarterly amortised basis?. Because while SP is most often financed as a upfront capital cost, the only way to really know if you have made real savings is to amortise the capital cost such that it appears as a quarterly cost added on to the electric bill
For this you will need interest rate and nominal lifespan of solar panels
The only comparison that makes sense to me (as it is the only alternate option I would consider) is to compare amount of interest I would have saved on my mortgage if the capital cost of solar installation had been used to pay down my debt, against the difference in power bill costs. In my calculations, it will take me about 4 years to be ahead. I expect the panels to last the 25 years for which the product is warranted (product warranty, not performance warranty), and the inverter to last the 10 years for which it is warranted. So from years 5-25 I am well ahead.
When I chose to invest in solar panels and inverter, there were three options I considered. I had received a bonus payment from work and considered:
- Buying into Solar for my home
- Paying down the mortgage
- Renovations to the home
The previous year I chose the renovation option as there was some work that was getting desperate (rotted timber on rear steps/deck that was dangerous, floor tiles lifting etc.).
This year I decided to use the money for solar.
Next year I may finish the renovations (have some bath rooms that are getting desperate) or maybe just pay down debt. Not sure yet. At least now I can add the power cost savings to the amount available for next year's choice.
While an accountant may use a different method to determine spending criteria, I like to keep it simple. It works for my current situation. So far my power costs have dropped more than I expected. My initial calculations were based on a power cost reducaiton of around $2000 per year and so far it looks like I will significantly exceed that, bringing my break-even point closer.
Once I have a full 12 months of accurate usage data, I will run the numbers to see if battery storage will make financial sense yet. So far it does not look viable just yet, but as battery costs drop and as tariff options change, there will likely come a point where it does. I have the data now to be able to calculate how it will affect my costs on a daily basis, not just averages. I will be able to determine very accurately how my bill would be different if I had battery storage installed.