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Saving money with solar power

Solar Panel Installation

Thinking of installing a solar panel system? Already have rooftop solar and want to make the most of it? More than a quarter of Aussie homes have rooftop solar, and that number is growing every year. After all, it makes financial sense! We get plenty of sunshine, grid electricity is expensive, and government rebates make solar installation pretty affordable. Power bills are one of the biggest cost-of-living expenses in Australia; minimising reliance on the grid means more money in your pocket. Not only that, but you can ever export solar back to the grid and reduce your bill further! Exciting, right?

So, how much money you can save on your power bill with solar? The answer is, it depends, but generally quite a lot. On average, power bills are about $350/year cheaper for households with solar. Over a few years, you’ll have paid off your solar system. After that, other than occasional repair/maintenance costs, it’s pure profit. Imagine having an extra $350 to spend on Chrissie presents for your kids every year! There’s also the bonus that it’s way better for the future of the planet they’re growing upon. The initial investment is pretty affordable when you take a longer view; with low-interest rates on term deposits, and temperamental share-markets, investing in solar is a low-risk, high-return choice.

So, how do you make the most of your solar investment? Here are some great tips from the experts at the energy comparison website Econnex, where you can compare the best solar feed-in tariffs. They cover 20+ major electricity retailers in ACT, NSW, SA, VIC, and QLD.

Without further ado, here’s what you need to know about saving money with solar power.

How longspun does it take for solar panels to return for themselves?

The solar panel payback period varies quite a bit from state to state. Some factors include:

  • How expensive is your grid electricity 
  • How much your panels cost to install
  • Whether you live somewhere sunny.

The good news is, solar panels will pay for themselves in several years, no matter where you live. But to get specific, on average, a 5kW system that exports 50% will pay itself back in:

  • 2-3 years in Adelaide
  • 3-4 years in Perth
  • 4 years in Brisbane and Sydney
  • 4-5 years in Canberra
  • 5 years in Melbourne and Hobart
  • 5-6 years in Darwin

If you haven’t already installed solar, a key takeaway is to shop around and get a few quotes. Not all solar installers are the same! Make sure that you go with a licensed installer; also, check their reviews as well to ensure that they have a reputation for quality installation and customer service.

Solar storage batteries – are they worth it?

According to chartered electrical engineer Finn Peacock of Solarquotes, not yet. A solar panel system will take on average about 5 years to pay for itself; however, a back-up battery system costing $15,000 to install will take about 15 years to pay back. With only a 10-year industry-standard warranty, there’s a good chance that repair and replacement costs lead to no payback.

Peacock highlights that some people are putting off getting solar power until batteries get cheaper. But in the meanwhile, they’re losing hundreds of dollars a year by relying on grid power. It won’t be long until battery systems come down in price; when they make financial sense, you can add them to an existing system using a method called AC coupling. So it’s better to go solar now and retrofit later.

Solar rebate vs solar feed-in tariffs – what’s the difference?

Solar rebates are payments from the government to encourage you to install solar power, making it more affordable than ever. Your solar installer will take care of this part for you (yay!)

Solar feed-in tariffs (FiTs) are the credit your electricity provider gives you for feeding solar power back into the grid.

What kind of solar feed-in tariff is best for me?

If you do have a solar battery, you could consider a time-varying FiT with peak, off-peak, and shoulder times. You can store surplus power during the day and export it during peak periods at night for a higher FiT. On the other hand, solar batteries are expensive, so this can probably wait for now. For most grid-connected customers, a single-rate FiT will do nicely; while you’re out and about during the sunshiny hours, your solar power system will export your surplus. In the evening, you’ll get home and use power from the grid.

Should I choose the electricity provider with the highest FiT?

You might think that the highest feed-in tariffs will mean the most savings. It’s not always that simple, unfortunately. Check the “fine print” – does getting a higher FiT mean you have to give something else up? Will you be charged higher rates for grid electricity? Will you lose discounts? Are you required to buy your solar panels through that electricity provider?

As a rule of thumb, even with solar panels, most of us still rely heavily on grid electricity. If you’ve got a time-of-use plan with your electricity provider, your bill shows when you’re using your power the most. For many of us, the sunniest hours aren’t when we’re using power; we’ll export power during the day while we’re out, and use (considerably more expensive) grid power during the evening. Be careful that getting a higher FiT doesn’t mean your additional spending on grid power ends up costing you more. 

How many solar panels do I need?

Because solar panels are so affordable nowadays, the answer to this is basically “how many can I afford?” Also, “how many can my roof fit?” It’s costly and hard to add extra panels later; so usually, maximising your solar system means lower bills for you. Regardless of how much energy you consume, solar pays for itself and more. What you don’t use, you can just export. Also, the power you’re exporting is helping the electricity grid harness the power of the sun; if every Aussie rooftop had solar panels, we’d produce enough power to be 100% renewable. So go on, fill that roof!

How can I reduce my reliance on the grid?

If you’re home during our sunshiny days, you can increase your solar savings by using most energy during daylight. This might seem counterintuitive if you’re on a time-of-use plan and accustomed to avoiding peak-time prices on your grid electricity, but having solar panels means no more waiting till 10 pm to run the dishwasher off-peak.

You’ve probably already figured out that solar doesn’t work at night-time. That’s right because there’s no sun. Working 9-5? Most of the power you use will be during times when your solar panels are getting less power. So feed your daytime power to the grid, and wait till shoulder/off-peak times to do laundry (or that Xbox marathon). But if you’re working from home, or pick up the kids at 3 pm, use solar power during daytime hours. That way, you’ll minimise grid use during times when it’s not so sunny.

There’s a caveat, though. What if you use more power during daylight hours than your solar system can keep up with? You’ll end up defaulting back to (expensive!) grid electricity. Moderation in all things, although if you’ve got that roof full of panels then you’ll probably be alright!

Staggering your power consumption helps, too, especially if you haven’t got a battery. If you use your dishwasher, washing machine, and dryer all at once, you may drain too much solar. In that case, you can find yourself inadvertently switching to the grid. But if you do them one after another, you’ll likely be fine.

With these handy tips, you can maximise the value of your investment in solar panels. With hundreds of dollars saved every year, harnessing the renewable energy of the sun, there’s no need to wait! And if you’re looking for the best electricity retailer for you as a solar customer, it’s never been so easy. Forget about calling up a dozen call centres to wait on hold and wasting time talking to salespeople! Just head to Econnex for an easy electricity plan comparison at a glance. The power’s in your hands.

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