The Australian dollar’s slide is continuing – with implications for those still considering purchasing solar power systems. It’s a decision that may not want to be put off for much longer.
The AUD fell sharply against the greenback yesterday after the Reserve Bank cut interest rates to a fresh record low of 2.25 per cent. At one point yesterday, it was trading as low as 76.52 cents. Live mid-market rates at around 6am this morning had the dollar at 77.89 US cents.
But any sort of sustained recovery is uncertain, with the Reserve Bank wanting to see the dollar lower generally and quite prepared to “jawbone” to get it there.
In April 2013, the dollar was worth as much as USD 105 cents; but it hasn’t seen parity since late May 2013.
Components such as solar power panels and inverters have been dropping in price as a result of fierce competition and more efficient manufacturing processes over the years, but currency exchange issues are really starting to eat into those reductions. While most solar goods are produced in China, trade is usually in US dollars.
Margins on solar components are often very slim and with little wiggle room available; a difference of just a few percent can add hundreds to the final cost of installing a solar power system. Every time the Aussie dollar drops by 5c, it can increase the cost of installing a system by more than 10%; assuming no reductions in the base price of components. This is more likely to occur as new stock of solar components is received by Australian solar companies.
It’s not all gloom and doom though. If prices should rise, solar will still be within reach of many Australian households thanks to zero-deposit payment plans.
According to national provider Energy Matters, the company’s Save As You Go initiative enables eligible households to have solar installed at zero up-front cost (assuming the meter doesn’t need changing) and depending on the installation scenario, the savings can be greater than the repayments. After the payment period, the electricity generated is essentially free.
Companies wanting to go solar can also get ahead of the ailing Aussie dollar through commercial solar leasing and PPA’s.
