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Blog Post Friday 19 October 2018

Can Solar Panel Save You Money Over the Long-term?

Can Solar Panel Save You Money Over the Long-term?

If you generate your own energy, you probably wouldn't think twice about running the air conditioner all day during sweltering summers and turning up the thermostat in winter. Solar systems seem like an attractive proposition for these reasons. And depending on your usage, installation costs and where you live they can save you money.

Solar panels: how they help you save money

Solar panels will usually help you save money on energy costs as long as you live in the same house for long enough to recoup the installation costs through savings on your power bill .

Is it worth it? Factors to consider

How much you'll save with solar panels depends on a range of factors. Explore these when deciding whether or not it's worth it.

Energy consumption

A quick look at your bill tells you how much electricity your household consumes. If you're an energy-intensive household, you might need to install a system with at least 5kW capacity, which would generate 18kW/h to 25kW/h, depending on where you live and the sunlight available.

Usage patterns

The power generated by your solar system is always used before you start drawing on the grid for power. So if you consume most of your power when your panel is supplying all your power needs, you aren't drawing on the grid and paying for your electricity during these hours. If you use less than what you generate, this is fed back to the grid and you get a credit on your bill according to the applicable feed-in tariff.

Feed-in tariff

Feed-in tariffs will vary depending on your retailer and your state or territory. A base rate might be 8 cents per kWh, but reputable retailers can offer great deals like 12 cents or even 16 cents per kWh.

The size of your system and how much you feed back

The larger the system, the more energy you'll generate and the more money you'll likely save over time. However, the larger the system, the bigger your initial outlay. If you install a system that's too large, you end up feeding a lot of your power back into the grid. With feed-in tariffs likely to continue to drop, you could end up selling power for less than you're buying it from the grid. Assess your household's power needs when deciding on the size so you have a decent payback period and return on investment.

Where you live

As a continent, Australia has the highest solar radiation per square metre in the world, so we Aussies have a generous supply of solar power at our fingertips. However, regional differences do exist. For example, in Queensland the same system is likely yield more solar power than one installed in a less sunny region such as Victoria or Tasmania.

Electricity prices

How much you're paying for electricity from the grid will obviously affect how much your solar system helps you save. The higher electricity prices are, the more you'll save by drawing on your solar panels.

Upfront cost of installation

The cost of installing your solar system is another factor to consider when working out whether or not it's worth it. Note you might be eligible for a government subsidy in the form of small-scale technology certificates under the Small-scale Renewable Energy Scheme. This can help reduce the cost of your solar panel system. Other rebates might be available.

The verdict?

Getting a solar panel system installed at your house will likely help you save money over the long run, as long as you live in the home long enough to recoup the costs. However, it could be worth it even if you do end up renting out or selling your home. The key things to consider when deciding whether or not it's worth it are your consumption habits and patterns, where you live, and feed-in tariffs.