Installing a solar hot water system is one of the most efficient and cost effectiveinitiatives a householder can undertake to make an existing home more sustainable.
The Australian Greenhouse Office is offering households a $1000 rebate to reduce thecost of a solar hot water system providing:
1. They are changing from an electric storage hot water system (which are the mostemissions intensive); and
2. Their combined family taxable income is less than $100,000 a year
The rebate applies to an existing principal place of residence and is available to bothhomeowners and renters.
The average savings in CO2 emissions per year as a result of switching to solar from anelectric storage hot water system is two to four tonnes.
The average savings in electricity costs is between $300 and $700 per year depending onthe climate and the number of people in the household.
The average solar hot water system lasts for 13 years (some even last for 20 years).There are approximately 70,000 new hot water systems sold each year but only a smallpercentage are solar.
Even though electric hot water systems have a lower upfront cost, the long term benefitsof a solar system will outweigh the initial outlay. A household may have to replace twoelectric systems over the life of one solar system and there are lower yearly electricitycosts with a solar system.
As well as the $1000 rebate from the Australian Greenhouse Office, there are furtherincentives to install a solar hot water system when an electric storage system is ready tobe replaced.
Nearly all solar systems on the market come with a certain number of Renewable EnergyCertificates (RECs). RECs are assigned by the Office of the Renewable Energy Regulatoras part of the Mandatory Renewable Energy Target. The certificates are tradable and canbe used to provide a discount on the up front cost of a solar hot water system.
The numbers of RECs that come with a solar hot water system depend on its size andwhere in Australia it is installed. Each solar system sold in Australia usually comes with20 to 40 RECS… that equates to an extra discount of $600 to $1200 on top of the $1000dollar rebate.
Because switching from an electric storage hot water system to a solar hot water systemis the simplest and most effective single measure to make a house more greenhousefriendly, most state and territory governments have their own incentives to encouragehouseholds to install a solar hot water system. In NSW, for example, switching to solarhot water attracts a rebate in the order of $600 to $800 depending on the type of systemchosen.
Why switch? - A real life example from Sydney…
Replacement of an existing electric storage hot water system:
Costs
• Retail cost of a new solar hot water system: 250 litre tank (suitable for a three tofour person household): $3928
• Installation cost: $1400
Total: $5328
Offset by Rebates and RECS
• Australian Greenhouse Office rebate: $1000
• NSW Government rebate: $600,
• Value of RECs attached to the system (bought back by the retailer in the form ofan upfront discount): $728
Net Cost: $ 3000
Electricity saved over the life of the system ($400 a year for 13 years): $5200
Net benefit to owner is $2200 over the lifetime of the system. Any future increases in the cost of electricity will only increase the benefits.
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