Solar, Does It Save You Money Or Make You Money?

 

Solar Panels Return on Investment

The Confusion Between Making Money & Saving Money with Solar And The Hidden Savings Not Shown On Your Electricity Bill

Making money and saving money is the most common misunderstanding when it comes to whether “Solar Is Worth It” or “If You Will Be Financially Better Off With Solar”. In the past 10 years the solar industry has changed with the advancement in technology, system prices dropping, as well as Government rebates and financial assistance being available to assist with the up-front costs of purchasing and installing solar.

These changes have not only made installing solar for the average Australian home, more accessible but have altered the general public’s reasoning for installing solar from “Making Money to Saving Money”.

Making Money With Solar

Back in 2010 when installing a solar system was not as common or accessible as it is today, the price of a system and installation was approximately 80% more than today’s costs. Due to this extortionate pricing the only way to incentivise Australians to install a solar system at their property was to lower the return on investment period by providing a high return in solar credits (also known as Feed-in Tariff returns) for any of the unused energy a solar system generated. This unused energy when fed into the grid was and is re-sold through energy retailers.

Solar Panels Saving

At the time of high credit returns households were receiving Feed-in Tariff rates as high as 40-60c for every kWh of solar electricity exported, which would then appear as credit on the household’s electricity bill.

These high rates put less pressure on households trying to maximise on the energy generated during the day, as the return for unused energy was so high, meaning you could make money in credit, even if your electricity bills and reliance on the grid were not reducing.

Today’s Feed-in Tariff rates have lowered significantly and range from as little as 0-23c, however even with these lowered rates installing a solar system has become more of a beneficial investment than ever, due to the amount of money to be saved through reducing your electricity bills.

Saving Money with Solar

As mentioned prior solar system prices have plummeted by around 80% since the days of high feed-in tariff rates, meaning you can purchase and install a much larger system, which will generate a more substantial amount of energy, for a much lower and affordable upfront cost.

Furthermore, the Federal Government rebate is available across Australia and can provide rebates up to $4,176* for a residential sized solar system (additional rebates and financial assistance is available in some states).

So now that we’ve established that installing a solar system is an affordable purchase lets discuss how it is an investment for your future savings.

Solar Cell System Diagram Australia

In basic terms by having a solar system installed at your property you are able to generate your own electricity, therefore reducing the amount of electricity you purchase from the grid, resulting in lowered electricity bills. By making use of this energy during the day, instead of allowing it to be exported to the grid for a low feed-in tariff return, you can see up to an 80% reduction on electricity bills and possible savings of over $1500 per year.

Depending on the size system installed and your energy habits, these savings could see you having a return on investment in as little as 3-5 years, meaning further savings go straight into your pocket…or holiday fund!

See our case study page to hear about Australians who have reaped the benefits of reduced bills.

Hidden Savings Not Shown On Your Electricity Bill

It’s important to note that while your electricity bill will display the feed-in tariff return, it does not display the amount of money you’ve saved by using your solar system. 

Surprisingly enough energy retailers don’t want to tell you how much money you’re saving by using them less. In most cases you should be able to compare your pre-installation and post installation bills to estimate your savings, however you can also track your energy generated with a smart meter or some solar providers will be able to provide you with a smartphone app to assist with daily tracking and usage.

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Beginners Guide to Solar Power

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Includes detailed explanations and diagrams of the various types of solar systems and their parts, solar battery storage systems, Government incentives, expected ROI periods, finance, energy saving tips and more!

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Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.
 

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