Why Paying for Electricity is Dead Money

 

Paying for electricity is dead money

Every year, an average Australian family of 4 spends as much as $2,365 on their electricity bills.

Some spend even more, especially if they have big energy consumption items like a swimming pool or air conditioning.

And, if they have electric heating, their power bill will be higher than those with gas heating.

Given that electricity prices have gone up 100% or more in the last 7-8 years AND they are predicted to keep going up – possibly another 40% (plus) in the next 10 years, it’s pretty safe to assume we won’t see the end of exorbitant price rises for power anytime soon!

Here’s the average increases in electricity prices for householders from 2007-08 to 2013-2014 (7 years).

Note: These figures do not include rises in the 2014-15 & 2015-16 Financial Years so the real figures are higher than those listed below.

Average increases in household electricity prices 2007-08 to 2013-14
Sources: Lynne Chester & ABC Fact Check

So, ask yourself this:

If you could put that $2,365 a year into a savings account, how much money would you have in 10 years time?

Well, if my basic maths skills are up to scratch, it’s going to be at least $23,650 + interest.

So, what does all this have to do with Solar power?

Well, here’s the thing. At the moment, if you are paying $2,365 a year to your energy retailer, that is totally DEAD money. The only thing you get from it is light, cooking, operating tv/computer/phones, etc.

After 10 years, you would have paid $23,650 to the power company and gotten NO financial benefit at all from it! Actually, it would be worse, because – as mentioned above – power prices are predicted to rise approx. 40% over the next 10 years.

However, if you were to invest in a solar power system, you could pay it off in full with savings on your power bill in potentially 3-5 years, and after this, every dollar you save on your power bill could be put into the above savings account and be earning interest for you for years to come.

Note: A good quality set of solar panels are likely to last 20-25 years, so you should keep seeing savings from them for many years to come.

Now, just to clarify, you are not going to take your power bill to zero with a standard solar power system. Under normal circumstances, you might cut your power bill by somewhere between $700 to $1500 per year (depending on the size of your system and the amount of grid power you can offset to solar power), so that’s the amount you could be saving, rather than the full $2365.

However, there’s not too many other options where you can grow your savings nest egg by $700 – $1500/year AND also provide yourself with a large chunk of free electricity during day time.

You could invest in property, but let’s be honest, $700 – $1500/year won’t get you far. And you could buy shares, but the chances of them appreciating significantly in value EVERY year without fail is hit and miss.

Solar power is that rare option that is a win-win for you, almost any way you consider it.

And, as the price of electricity continues to rise, the return on investment for solar continues to improve. If you can offset grid power purchase with solar power, it doesn’t matter what the power costs per kWh if you don’t have to pay for it. Even if power prices got to $1.00 per kWh (mostly at 24c or higher now), you wouldn’t have to pay for the power your solar system generates and you use, hence the increase in ROI!

So, What’s Involved In Getting Solar?

So, if you don’t yet has solar, why not find out whether the numbers work out in your favour by getting 3 free quotes from local installers.

Our service will connect you with 3 local installers who can prepare no-obligation quotes for you to install solar power on your home.

Just complete the simple form below and get your quotes started.

Also, the price of solar has dropped approx 80% in the last 5 years, while electricity keeps going up. It’s a LOT more affordable now than at any time in the past!

 

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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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