I'll double check my figures and the fine print relating to the state and federal government rebates before placing an order, but it appears that the ROI on buying a heat pump is very attractive - but only due to the government rebates available. It's very nice that I can help save the planet (supposedly) by reducing our greenhouse emissions AND save money by doing so, but I'm not sure that this rebate program is the most effective use of taxpayer funds to reduce CO2 emissions.
The other government rebate available is $8,000 towards a $13,000 roof-top solar polar grid-feed system. I'm not sure that our house is suitable for such a system, due to the large tree in our front yard casting significant shadow on part of the roof. Also, even with the rebate such a purchase doesn't make a whole lot of financial sense - it would only generate enough power to satisfy around 1/4 of our electricity use (1/3 if I go ahead and install a heat pump water heater). The annual saving on our electricity bill would therefore be around $250pa after paying out $4000 for the system. A 6.25% ROI wouldn't be too bad, but after deducting depreciation of around 4%pa (the system has a 25-year expected working life) it really isn't a very appealing investment. In addition, I suspect that the storage batteries used by the system won't last anything like 25 years before requiring expensive replacement. This is another government rebate that I suspect is rather wasteful. Photovoltaic technology is advancing rapidly, so I expect the cost of solar power generation systems such as this will plummet in coming years. If that turns out to be the case, the money spent on subsidising household solar power systems now would fund many more such systems if deferred for a few years. In fact, within a decade such systems may be cost-effective even without any government subsidy.
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