This article was first published on 25 September 2020 and last updated on 6 April 2021 to include additional details.
The truth: purchasing a solar system upfront can be expensive, but there is a whole lot more to what a solar PV system brings. It is a common misconception that solar is a one-way investment with little returns, and while it is certainly not cheap to install solar panels, there are plenty of benefits that come with it. Let us dig into them in this article!
Did you know that the cost of solar globally has declined by 89% in the last 10 years, and is now the cheapest form of electricity generation? The Levelised Cost of Electricity (LCOE) is an industry measure for the lifetime costs of generating each unit of electricity through different generation sources. In the last few years, the LCOE for solar has also fallen below that of natural gas, Singapore’s main energy generation source.
The same is true for Singapore, with the costs of installation of solar panels gradually decreasing each year with more and more efficient technology as well as lower costs. The Solar Energy Research Institute of Singapore (SERIS) forecasts the cost of solar to decline another 33% from 2020 to 2030. That said, with the current maturity of solar technology, there is no better time to start switching to solar and saving money on your electricity bills.
Attractive Cost Savings and a Long Term Investment
Installing solar can significantly reduce or even eliminate your electricity bills. A majority of landed homeowners in Singapore experience about $200-250 of savings on their monthly electricity bills from installing solar, while also benefiting from now having to pay for the ever-rising electricity costs.
While the upfront cost of installing solar on landed properties in Singapore is between $15,000 to $30,000, the average solar homeowner pays off their solar investment in around 6 to 8 years, with the remaining 20 years of the solar panel’s lifespan basically generating free electricity! This works out to be an annual return of between 10-20%, which proves out to be a better investment than the Straits Times Index (STI) at an average yield of 4.6%!
Psst… did you know that you can also profit from solar? We know of some homeowners who end up generating even more solar than they can consume, and after netting off their water and waste removal charges, SP Group pays them for the excess solar energy they have injected back into the grid! Take a look below!
If you are curious to find out what this cost savings can look like for your roof, you can check out our online solar calculator which will provide you with an instant estimate on your potential cost savings and recommended solar installation size, simply with your property address and an estimate of your current electricity bills. Check it out here.
Solar Panels Come with Warranties
Apart from the upfront cost of solar, one other cost component you may want to take into consideration is the maintenance of the solar system, especially since your solar panels generally last you 20 to 30 years. Fret not, in Singapore, any reputable solar installer will be using solar panels with a 20 to 25 year warranty, which provides you with a guaranteed assurance against any failure or manufacturing defect. The typical inverters also come with a 5 to 10 year warranty period. However, since these equipment are built to weather harsh storms, a majority of homeowners do not need to replace them during the warranty period.
On top that, if you’re worried about the installation process and any damages incurred, most solar installers in Singapore also provide customers with a 1 to 3 year free workmanship coverage, which will cover any roof damages, leakages or electrical issues incurred during or after the installation process.