How Solar Power Can Save You Money
Updated: Aug 1, 2019
Adding solar panels to homes has been increasingly popular over recent years, which is a testament to how solar panels save energy. Several Australian states incentivise using natural resources as a way to limit the environmental impact of power and the strain on the electricity grid.
While it’s tough to become totally unreliant on the grid, adding a sizeable solar panel system to your home is a step in the right direction.
On top of that, solar panels present the opportunity for a considerable amount of savings. In this piece, we take a look at how much you could potentially save over time and how it might take to recoup your initial investment.
Solar Panels Are Decreasing in Price
Solar panels are currently at an all-time low price, which means there’s no better time to transition to solar than right now. This increased affordability means you may even be able to opt for a better quality system, leading to more savings on your electricity bill. How solar panels save energy depends somewhat on the solar system you choose.
The upfront cost of a 5 kWh solar panel system sits around $5,000 for 20 panels. You can purchase a battery and store power for later as well, but this can cost $5,000 – $10,000 extra depending on the model you choose.
While this seems like a lot of money, you might be surprised to learn how quickly you can recoup your investment.
Saving Money with Solar
Australia is in one of the best locations in the world when it comes to solar power. We have access to some of the highest solar radiation levels on the planet, which allows us to harness the power of the sun and save money on energy.
How much you’ll save on energy bills depends on your location, how much energy you use, and the size of your system. Still, your savings could approach or exceed $1,000 a year, especially when you consider feed-in tariffs (more on this below).
When it’s all said and done, it can take you about five years to recoup your initial investment of a 5 kWh solar panel system with no battery. Adding a battery can add another five years, but many think it’s worth it to decrease their reliance on the grid further.
Your system should last upwards of 20 years, saving you a similar amount of money the whole time. That means that you can enjoy 10 to 15 or more years of energy savings after you’ve received your initial investment.
How Solar Panels Save Energy and Money: Feed-In Tariffs
The solar feed-in tariff offers cost-saving opportunities for those who choose to go solar.
A feed-in tariff is simple to understand. Your solar panels generate energy, but you aren’t always using as much energy as your panels create. You could be away from home or only be using low-power appliances for a few hours.
When this happens, your panels will feed the excess energy back to the grid. You are paid a rate of cents per kilowatt hour for the energy you feed back to the grid. The amount you receive as compensation will vary depending on your location and energy supplier.
Since most households with solar panels still rely on the electricity grid for some energy, your retailer usually displays the solar feed-in tariff as a discount on your next bill.
States like Victoria have a minimum feed-in tariff rate (9.9c/kWh in Victoria), while others leave it up to the energy supplier to decide. Contact your energy retailer or compare electricity plans to see how much you could save with a solar feed-in tariff.
Increasing the Value of Your Home
The solar panel money-saving opportunities don’t start and end with your energy bill. You could also see a partial return on investment if you sell your home. Buyers who understand how solar panels save energy and money may be more interested in a home with solar panels already in place.
A solar panel system probably wouldn’t create enough value to recoup your investment when you sell, but the increased value can pay for a chunk of the initial cost.
When you combine this with your energy savings and feed-in tariff amount, it’s hard to imagine that most households won’t come out ahead.
Solar panels have a lengthy shelf life as well, which means you can still find value if you don’t plan on selling in the near future. Your solar panels can still be an attractive selling point if you ever decide to move.
Moving Towards Solar
Installing solar panels has been a popular money-saving move for a lot of Australian households. The savings speak for themselves, and the prospect of earning your money back in five years or less is an attractive one.
Of course, much of your savings will depend on which energy supplier you have and what rates they charge.