Solar Panels – Will The Sun Save You Money?
With electricity prices threatening to sky-rocket, many people are turning to solar electricity and solar PV panel systems in the hope of saving money. But before you rush out and get solar panels installed on your roof, you first have to ask yourself if this solution is as financially attractive as it seems.
The Solar Panel Solution
The consumption of electricity on average is entirely different across each of the states, with Queensland, for example, being one of the highest consumers, using more than the national average. Electricity use in an average Australian home is estimated at about 18 kilowatt hours per day, which is relatively high compared to the rest of the world. But with all the solar power radiating over this ‘sunburnt country’, how much energy will solar panels really produce for you?
Image by Abi Skipp
Solar Power Production Levels
The amount your solar photovoltaic (PV) panel system produces depends largely on where you live and how big your system is. Obviously, the larger the system, the more you’ll generate but you’ll have to pay more upfront, regardless of each state government’s bonus scheme. In saying that, a one kilowatt system can be expected to produce around 20% of an average Australian household’s power consumption. A standard 1.5 kW system can generate nearly 2500kWh of electricity per year, the equivalent of nearly 1/3 the average annual electricity consumption of a household.
How Much Do Solar Panels Cost?
Before any solar credit rebates are taken into consideration, a one kilowatt system used to set you back around $10,000 and a 2kW system about $20,000. When the rebates were introduced, the same systems, fully installed, cost around $6,000 for a 1kW and $12,000 for a 2kW system and this depended on where you lived and value of the solar credits at that time. Now, however, prices have fallen significantly as more attention is directed towards solar panels. A 1kW system may cost less than $3,000, and many energy companies are also providing interest-free repayment deals.
What’s The Financial Benefit?
To make money, your system will need to be hooked up to a feed-in tariff scheme. Each state has a different scheme and price per kWh. This is the tricky part. Queensland, South Australia and Victoria have net feed-in tariffs meaning that home owners will only get paid for the electricity they export to the grid minus the power they consume during the time of production. So if you’re a stay-at-home parent, work from home, are a pensioner, or use a lot of electricity for other reasons, you will be at a disadvantage. The other states and territories, including N.S.W., have a gross feed-in-tariff. Every kWh that is produced is sent to the electricity grid at the time of production and your payment is based on that.
Things to Consider Before Installing a PV Solar Panel System
Ask yourself these questions:
- What are your total upfront cost for the panels and installation?
- Are you within the income means test threshold to be eligible for a rebate?
- Is your roof facing north to catch direct sunlight?
- Do you live in a state that offers gross or net metering?
- What system size can you afford?
Taking into consideration that electricity prices are more than likely to rise in the future, the installation of solar PV panels may be a viable option for individuals living in those states with a gross feed-in tariff, but less so for those with a net feed-in tariff.
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