Hi Russell, and other commenters

Russell your question has received a lot of great answers. If I can add one more hopefully useful view and share our lessons from the Zero Energy House. At the zero energy house we assessed the solar on the basis of savings vs increased mortgage cost.

For Solar water heating:

A solar hot water system of around 4m2 (2 x 2m2 panels) might generate around 2200kWh of hot water per annum, at $0.22/kWh this is a saving on your power bill of $485/a. At $7360 it would cost around $575/a to repay the additional mortgage a repayment over the same period as the system life of 25 years, at 6%/a interest. Where energy prices go up at 3% per annum you have saved more money than your repayments (including interest) after 8 years. The obvious risk is that the interest rate goes up. The nice thing about an agreed repayment plan with Nova perhaps, or though it is a little hard to see how your power bill will less when you are saving much less than $123/month.

For Photovoltaic:

A typical 4kWp system would probably generate 5,000kWh/a, and might cost around $12,000, at the same mortgage terms as above the repayment cost is around $940/a. Assuming you manage to use 25% of the energy generated directly in the house, and export the rest you would avoid paying $264 for imported energy and be paid $446 for exported energy, a saving of $910/a, (assuming an export tariff of $0.17kWh and import price of $0.22/kWh). Where energy prices go up at 3% per annum you have saved more money than your repayments (including interest) after 2 years. There are 2 obvious risks here, 1) interest rates go up, 2) export price goes down.

There are of course a few other questions to consider including:
- The quality and longevity of the system components and installation
- The energy tariffs you are currently on and how it changes over time
- If you sell your house are the buyers willing to pay you more as a result of the solar hot water system to allow you to recover the invested money if this hasn’t already been recovered from the savings
- How long will there be 4 people using hot water, as reduce hot water usage, will reduce your savings.
- Are there other technologies to consider such as hot water heat pumps, and could these be combined with one of the technologies above

I’ll leave you to work out if these figures apply to you, and draw your own conclusions. Do drop us an email via the Zero Energy House if you want to discuss more, or wanted to drop in for a coffee some time.