2nd Jul 2018

Will you ever be able to pay it off in time to enjoy the savings?

FONT SIZE: A+ A-
Pay off solar sooner than you think
Leon Della Bosca

There’s little doubt that solar power is the way of the future. And with the cost of power steadily increasing – 63 per cent over the last decade – solar panels are becoming more prevalent atop many Australian houses.

The average cost of installing a solar system, including inverters, panels and batteries, can be between $4400 and up to $10,000 for a larger system and, over 25 years, could cost up to $20,000 to run. This leaves many to wonder whether they’ll ever pay it off in time to enjoy the savings.

However, recent analysis has revealed that solar panels can pay for themselves within six to 10 years, and that the average savings over 25 years could be as much as $94,273.

In Adelaide, residents could save up to $3771 per year on electricity over 25 years. In Sydney, you can look for annual savings of up to $3150; in Brisbane, it’s around $2683; and in Melbourne, around $1988. 



So, in Adelaide, a solar system could be paid off in six years. It would take seven years in Sydney, eight in Brisbane and nine in Melbourne.

While electricity prices soar, increased demand for solar systems is coming down. However, Australians are still reluctant to consider the solar option, with cost being the biggest deterrent.

“The overriding impression is that it’s really expensive,” said Finder Editor-in-Chief Angus Kidman.

“The technology is a lot more widespread now, it’s a lot cheaper, but I don’t think that part of it has sunk in for people.

“And while it can be very economically viable, it is a long-term commitment. It’s between six and 10 years, that does rather presume that you’re in a house and you’ll be living there for that long.”

New South Wales is leading the charge (pardon the pun) on solar installations, followed by Queensland and Victoria. Overall, solar installations are up 30 per cent on the previous year.

The price of panels has come down, as too, has storage, meaning those who had previously installed solar only to see the excess power going back to the grid can now store this energy for the long term at a lower cost.

And with peer-to-peer trading becoming an area of potential growth, you could soon sell your excess power to your neighbours at a better rate than selling to electricity retailers.

Read more at www.domain.com.au

Do you have a solar system? Does it work well for you? Would you recommend solar power to our members? Can you describe your system’s success or failure? Any other tips?


Related articles:





COMMENTS

To make a comment, please register or login
ronnieb
10th Jul 2018
6:14pm
There are so many ways the retailers are rippping customers off a book could be written about it. The so called 'Supply Charge' is not a bad place to start. Accounting for somewehre between 30 and 50% of the total bill it has nothing to do with your meter reading. It's simply a charge at a daily rate for "being connected ". No retailer has yet told me convincingly what this charge covers but i suspect it pays for their call centre. The consumption charge for peak power varies between 25 and 44c/kwhr and the promotional advertising usually talks about "we will give you a discount of x% off"but they never tell you what the charge rate is. Do the maths as they say. 40% off 44c/kwhr is a discount of 17.6c/kwhr giving a nett charge rate of about 26c/kwhr. So, duh. Why not sign up with a supplier who offers 25c/kwhr in the first place. You will also find that the "discount "cuts out eventually. And certainly doesn't apply if you go one minute over the bill pay by date. Also, if you happened to have solar installed years ago you might have been given a feedin rate of more than 30c/kwhr and still be getting something like that. But todays customers are now being told they will only receive 9.7c/kwhr and of course this is being fed back into the system during peak hours (when the sun is shining). So that means you are supplying power to the grid and being paid 9.7c/kwhr but if you use any power during the SAME TIMING (ie during peak hours) you could be paying anywhere between 27c and 44c/kwhr. The difference between 9.7 and 44 is 34.3c/kwhr which if you haven't signed up for a consumption discount will cost the average 2 person household somewhere north of $100+ per billingperiod. A minimum of $400 per year. Clearly many people don't understand how to argue against these levers the retailers have so they finish up paying huge excess amounts.
There are other factors that come into the discussion such as when you query your bill the retailer might say "you are charged this rate because of the way your meter is configured. " That usually catches customers out because not many people have any idea how their meter is "configured". To find out you have to have a technical discussion with the distributor (the next company up the line above the retailer.) Your meter is configured by the distributor depending on where you are located, whether you have input power (ie solar panels) or not , with or without battery and so on. It's way too complex for most retail users. And it doesn't need to be. If the distributors and retailers in particular were tied to more stringent system of charge out rates - ie a transparent costing system - there could be massive savings to the consumer. Several million customers either can't be bothered to object to the system or don't know how to approach it.
inquisitive
13th Jul 2018
4:08pm
Very correct Ronnieb, we r in an over 55 village and all units have 6 panels connected. We were told by supplier that this supplies a quarter of our needs, we use instead of feeding in. I think it is all a BIG HAVE, could use stronger language but am a lady, I think.

They have full control and that is all their way ( suppliers). Only that the panels were already in place when we moved in, We wouldn't have paid to put them there if we had a choice.
Retired Knowall
16th Jul 2018
4:44pm
Interesting how half truths and lack of knowledge can can put forward as fact.
danielboonjp
12th Jul 2018
12:23pm
Disclaimer: I am in the solar industry; Two points ..
1. A standard 5 or 6 kilowatt system we install will pay for itself in 2.3 years
[commercial systems are about the same ]
2. Batteries are not yet cost-effective yet (the amortised cost needs to be less than what you pay for coal-fired electricity.
[batteries on commercial sites are not cost effective unless the business is on an on-demand billing system ]
Gammer
13th Jul 2018
12:34pm
I have 3kw system (12 panels) and am very happy with the savings I make. Of course, I use most power in the daytime and am only running my tv and a few table lamps (led globes) at night. I also use rechargeable batteries in my gadgets so can charge those in the daytime, too. Savings all round! And I am saving up for an electric car as I would be able to charge that from my solar panels also.
Love, love, my solar panels!!
Retired Knowall
16th Jul 2018
4:46pm
If you do the sums, right now a 5 kw system has an internal rate of return of over 18%. Try getting that from your bank.
johnp
13th Jul 2018
11:19am
Terrific info from Daniel and esp Ronnie.
Also my comments as follows

The retailers usually say discounts by way of a percentage which is misleading and deceptive as true per kwh or daily rates etc costs are then not disclosed.

Also separately but an important issue is as follows.

To get electricity to the users property, you only need certain important ongoing basic infrastructure works. That is generation, transmission and control. These days there are lots (100s) of retail companies and generation companies all with their multiples of Boards of Directors, CEOs, CxOs, upper managements, admin depts., I.T. depts., multiple billing systems, strategy, sales forces, call centres, marketing, advertising, commission agents, plush CBD offices etc. Those costs are enormous, make up a significant proportion of the bill and completely unnecessary.
bluebottle
13th Jul 2018
11:46am
I'd like to install solar, but our new duplex in Adelaide is south facing and most installers won't touch it - wouldn't be economically viable.
Chrion
13th Jul 2018
1:00pm
I notice in this article and various others that no mention is made of the western third of our nation. Does this mean there are no savings in WA,NT, or Tassie for having solar systems. As these articles are read Australia wide could you make them more inclusive.
Rosret
13th Jul 2018
1:16pm
In SA its almost essential and if Melbourne shuts down its coal mines and puts fans all over the country side people will have to get solar panels with battery backup just to guarantee continuous electricity supply.
Its interesting that my parents had a coal fired hot water heater installed in the 1950s as electricity supply was so unreliable. Here we are back again 60 years later.
I live opposite a retirement village. The locals all put together and the roofs were covered in solar panels. They benefited from the massive rebates. Yet they are being removed, broken in the storms and no longer in service. So does the initial payout pay in the long run? It was enough to make me doubt their future benefit. Although I do love my solar hot water service!
Theo1943
13th Jul 2018
3:11pm
Yes, me too. I had to check a map to if WA was still attached. I put 1.2kw of panels on my roof in 2009. Didn't take long to figure out that wasn't going to do much so, in 2012, I upgraded to 3kw. This made my investment $4800. With attentive management it has saved me $10,080 to date. I'm quite happy with this return. I'm not on scheme water so all my water usage is pumped electrically.
In the last 2 years the connection fee has doubled and this year a peak unit costs 57cents. My total bills since August 2012 come to $1300. And yes, I'm quite happy with that return.
maxchugg
16th Jul 2018
10:20am
Value is limited in Tasmania because most electricity is fed into the grid in summer for which you will be paid a pittance. But in winter when the output of the system is low, consumption is high, due to heating.
My 3 Kw system produced 4170 units in its first year, 2326 were used and 1844 sold back to the retailer.
The system was installed 10 years ago, cost around $10,000 and has produced a little better than 25,000 units, so I have recouped around $6,750 of my investment, plus a possible increase in the value of my house when it is sold.
In Tasmania, electricity is around 27 cents per unit, the feed-in tariff is about to fall from 27 cents to 5 cents.
I'm planning to build a new house next year. I will be spending more on insulation, particularly double glazing, unlikely to bother with solar panels again because I doubt that they will be viable when the feed-in tariff falls to 5 cents.
MICK
13th Jul 2018
1:41pm
Good article leon.
We have panels. Best thing we ever did. Just wish batteries were currently viable but that'll come in a few years........at which time coal will be DEAD and the government trolls will stop promoting it. Can't wait.

An overview of panels. You have the normal choice: cheap vs expensive / Chinese vs Chinese mad under license. The cheaper panels are likely to die around 10 years or before. A consideration but if you get your money back in that time then who cares. The main game should be to KILL KOAL! Renewables will win the day - when not if.
maxchugg
16th Jul 2018
10:52am
As usual, a very strange attitude from Mick. Don't burn coal in Australia where the amount of atmospheric pollution can be controlled, sell it to China and other overseas locations where, by magic it will produce no pollution, so no controls are necessary.
I have issued a challenge to Mick and others of the same persuasion, and will issue it again, not expecting an answer, because there isn't one:
If human activity on Earth is causing climate change/global warming, why are the polar icecaps on Mars also melting?
And as Mick has indicated that the trusts NASA, visit:
https://www.nasa.gov/vision/universe/watchtheskies/8aug_mars_melting.html
If human activity has caused global arming since the industrial revolution, why did the Arctic icecaps have no reaction to the massive amount of industrial activity of the kind most likely to affect the atmosphere in the periods before and during the past two world wars:
https://www.carbonbrief.org/guest-post-piecing-together-arctic-sea-ice-history-1850
Also, why do Mick and all the other worshippers at the church of Al Gore ignore evidence that in the future global cooling is more likely than ongoing global warming:
http://www.iflscience.com/environment/atlantic-entering-cool-phase-will-change-world-s-weather/
The trustworthiness of the promoters of the global warming scam was made clear by the leaked emails of the University of East Anglia after which we have seen one dud prediction after another - The Maldives were to be under water by 2000, followed by Tuvalu, both are still high and dry. Predicted endless droughts didn't eventuate, extensive flooding did. The polar icecaps were going to melt, currently they are growing.
The name change from global warming to climate change also tells a story. Unusual global warming has not happened, climate change is an ever present reality.
musicveg
16th Jul 2018
12:57pm
Interesting articles at the links you provided, but still it does not mean burning coal is a good thing because of the pollution it causes, it causes a lot more disease in people, especially children and the elderly. Along with car pollution of course. Whatever happens to the weather in the future I still think it is important that we look for non-polluting energy for the health of people, animals and the environment.
Retired Knowall
17th Jul 2018
2:57pm
Coal Fired Power will be with us for some time yet, possibly another 25 to 30 years. We have nothing at present that can provide the base load power Industry needs. Gas fired power stations are useful in providing peak demand supply, wind and solar are useful in complementing Gas. Our Govts, (Both persuasions) have been totally incompetent in planning for our future. The economic life of a Coal Fired Power Station is approx. 50 years, and these morons wait until the current power stations are about to close and use it as a political football to point score.
The Australian Public will argue the pros and cons of our Power Security for the next 10 years whilst the reliability of our power network deteriorates and gets more expensive.
Our only hope is that Battery storage becomes financially viable so we can go Off Grid, but, our Industries (Whats left of them) go Off Shore taking jobs with them.
maxchugg
18th Jul 2018
7:20pm
musicveg, it is agreed that mining and burning coal bring problems, but until a reliable,cost effective alternative is found, not using coal brings even greater problems.
Any problem, real or imagined, which can be linked to the burning of coal, however tenuous the link, will be declared to be proof of the harm caused by burning coal. But the deaths of pensioners who die because they could not afford to adequately heat their homes passes unreported.
floss
13th Jul 2018
1:48pm
Be very careful there has been a strong push to have the feed in tariff cut in half and the Feds and power providers are most interested in this proposal.
lynndi
13th Jul 2018
1:49pm
We installed a 3 kw system 2 years ago on a lowset villa. We have 14 panels facing north and it cost $3400 after rebates. We have paid the system off in this time. We constantly look for the best deals , ring AGL and they match the competition. We get 20c feed in and our largest bill has been $90. That's because AGL charge $1 a day connection fee. I'd recommend it to any one . We have researched batteries but they are not cost effective taking over 10 years to pay off. Our bills were close to $500 before solar.
curlysue
13th Jul 2018
1:53pm
I also would like to see Tassie included in relation to information regarding all aspects and stories that you cover. We feel rather left on the shelf down here regarding power bills as there is no competition. Only the one electricity provider - same with gas. Could you please include us with your findings so we could make a decision about going solar - ie is it worth it? Many thanks.
Bella54
13th Jul 2018
2:53pm
No mention of savings for a Perth retirees. We do belong to Australia you know!
johnp
13th Jul 2018
3:06pm
I believe most of the information here applies for anywhere in Australia. In other words not exclusive to just some states
Retired Knowall
17th Jul 2018
2:59pm
I worked in WA for some 5 years about 6 years ago and I noticed the Sun shine was just as bright as NSW, funny that.
jonboy
13th Jul 2018
3:51pm
The biggest reason Power Bills have shtrocketed is, and as pointed out by others, was the stupid decision to allow anyone to sell power!!
As a result we now have hundreds of extra HIGH paid CEO's and staff all offering cheap deals for an overpriced initial product.
The $1 a day for the CHinese pole owners doesnt help!!
Nika
13th Jul 2018
4:42pm
Liberals sold all our utilities except water, my worry is that will be next.
Nika
13th Jul 2018
4:40pm
I paid $14,600 after rebates for a 4kw system in 2011 and it paid for itself in full as of December last year. It took longer than expected because of the massive price rises but from now on free power till the 44c rebate finishes in 2028, best decision ever. When we sell and move back to the city I will do it again but hopefully batteries will be cheaper by then.
Melfunction
13th Jul 2018
6:16pm
There is a strong rumour that the Chinese government has recently cancelled a mega billion project for solar PV. This has left the Chinese manufacturers with massive unsold stock and production capacity which will be unloaded in the rest of the world. Good for us maybe in the short term but then these manufacturers will be trying to recoup their losses by other means - such as inferior quality and not honouring warranties, etc.
Comments?
danielboonjp
13th Jul 2018
8:37pm
CurleySue,
Tasmanians can have solar but makes sure the panels face true north and have an inclination of 48 degrees to maximise generation
musicveg
14th Jul 2018
1:51am
Great to hear some positive feedback from those already doing solar. I rent but have heard of a plan to get renters using solar by paying their normal bill amount which pays for the rental of solar and your electricity. Not sure how it will bring my bill down though if it happens. Has anyone heard of this idea actually happening or going to happen?
Retired Knowall
17th Jul 2018
3:07pm
It's called Peer to Peer trading. Provided you have a smart meter and you have "Friend" that has Solar, there are parts of Australia (Vic & WA) that have systems in place that allow Both Parties to register and trade in the excess power produced by the Solar system. Instead of the excess power that is fed into the grid being credited to the power company and the Solar provider receiving 11 cents Per KWH, the rate can be negotiated between you and the Solar Friend.
Fair Dinkum
14th Jul 2018
9:10am
I had solar panels installed a 5kw system 7 years ago since then I have not had to pay for power and I have a large credit with the power supplier I will have recouped the installation fee of
$ 21000 plus the $300 compulsory 5 year check of the system in about 8 years
Fair Dinkum
14th Jul 2018
9:14am
Forgot to add that I am located in the ACT
johnp
14th Jul 2018
9:45am
$21K seems way over the top to me. Our 5KW system was about a third of that. Or do you have batteries included ?
World Prophet
14th Jul 2018
2:51pm
We paid $ 17k for a 5kW system in October 2010, when the NSW rebate was 60c/kWhr. Systems today are much cheaper, but the feed in rate is much lower, and we paid for our system before the tariff ended and had a nice credit to boot. Today our power bills are quite low (our daily use of about 25 kWhrs is reduced to about 9 kWhrs by having the system) and whilst batteries are an option, at this stage they are not viable as the payback is far too long. All in all it was a good decision.
Chris B T
14th Jul 2018
10:02am
The electricity supplier charges GST when selling to consumer on top of all charges.
When the consumer sells back the excess Solar Powered Electricity, AGL charges the consumer GST for buying Back the Electricity.
The 10.6c Kilo watt tarrif is really only 9.54c.
Using this method you are paying GST, when buying and selling Electricity.
danielboonjp
15th Jul 2018
8:36am
Bluebottle.
If your roof faces south, the opposite must face north.
If you are able, look on Google Earth for your address, the top of the screen is magnetic north.
I am new to YourLifeChoices, so don't know privacy issues etc, otherwise, I would ask your physical address and view it on NearMap, a pay for use site with recent photos and an ability to check shading issues 'year round'
bluebottle
15th Jul 2018
10:08am
Yes, Daniel, my neighbour's roof (other half of duplex) faces north, but that's not much use to me is it ?
Suze
15th Jul 2018
11:21am
Blubottle
Perhaps there is some way you and your neighbour could share the solar panels ???
bluebottle
15th Jul 2018
11:33am
Suze - she's a young single fly in fly out worker who's only home 2 weeks out of 4 so power bills probably aren't a concern.
Don't know how you would organise a share; what happens when the other half sells or changes their mind ?
Kathleen
16th Jul 2018
1:17am
We have solar and in summer we paid nothing for electricity. It is something that everyone should do for the environment. In less than a year we have generated a total of 5211.77 kWh and avoided 3.6 t of CO2! We have German not Chinese panels.
MD
17th Jul 2018
1:27pm
Right, bright sparks, try looking at a balanced view in 'The Conversation - Policy overload'
a part extract from which reads:-
"As solar penetration increased, and network costs rose to cover this, it became increasingly attractive for households to install solar panels. In Queensland, the initial cost forecast for the solar bonus scheme was A$15 million. Actual payments were more than 20 times that in 2014-15, at A$319 million. And the environmental benefits weren’t big enough to justify that cost, as other policies have reduced emissions at a lower cost. The large-scale renewable energy target reduced emissions for A$32 per tonne, while household solar panels reduced emissions at a cost of more than A$175 per tonne.

In most states, premium feed-in tariffs and rooftop solar subsidies are funded through higher bills for all consumers. Everyone pays the costs, yet only those with panels receive the benefits. That means the costs fall disproportionately on lower-income households and those who rent rather than own their home."

Probably not a good idea to mention SA as the shining example of bright ideas, their light bulb moment has had an irksome regularity of dropping offline and the bunnies that live there are paying for the privilege. Wind farms all the answer eh ? One good (windmill) turn deserves another... but it needs more than just the wind that blows outa the pollies posteriors.
danielboonjp
17th Jul 2018
1:35pm
Kathleen, please name the panels.

The reason I ask is, I drive BMW (have done for over thirty years), because of German technology HOWEVER,

When we buy a product in Australia, it may say 'made from local and imported products'

All solar panels are made from Chinese made wafers, the panels might be made outside China, but the wafers are made in China
danielboonjp
17th Jul 2018
1:54pm
MD
Cherry picking data is like a cheap shot.
You're drawing a long-bow on everything and displaying your ignorance bigtime (any relation to Frydenberg?)
The Conversation is a vehicle for vested interests to promote their agenda/s

It's what you leave out that is more glaring; like the billions in rebates, subsidies and tax avoidance of coal mining, the emissions of coal mining and air-quality, the incidence of fugitive methane gasses ... which has no cost attached to it, despite the impacts.

In Qld, all retailers pay 18 cents per kWh - to the Qld government - to on-sell to the consumer
The solar panel system owner has paid for their system, they may be able to earn a feed-in tariff (say) 10.6 cents, so they immediately disadvantaged by earning 7.4 cents a kWh.

A 5 kW system costs $3115 less because of the federal government rebate; however, if they exported all that power in four years, they would earned $135 less than the coal-fired power earned
danielboonjp
17th Jul 2018
3:17pm
MICK
all panel manufacturers have a 80% performance warranty at 25 years on Tier One panels (bad luck if you bought from Eurosolar).

maxxchugg ... proficient in cut and paste and little else
MD
17th Jul 2018
7:48pm
Oh I bow to your erudite blather daniekboonjp although you probably lost me at the first decimal point. So what exactly are you saying - that a gen system that served us well for decades is now considered passe', dirty, costly and polluting, shouldn't have been subsidized ? Hindsight is a wonderful thing indeed but too little too late to shut the gate once the horse has bolted. As regards, "drawing a long bow on everything" perhaps you'd be kind enough to explain in a tad more detail, that by bestowing the benefit of your wisdom I may thus be enlightened. I didn't leave anything out, the bulk of my offering was extract from 'The Conversation'. The aim of my post was to contribute some small degree of balance to the lopsided spiel of t'others. Obviously to preen your ego you've taken it upon yourself to bamboozle me with your blather eh?

"The Conversation is a vehicle for vested interests to promote their agenda/s" - says you. What are you basing your facts on to justify that claim ?

You're splitting hairs sunshine with your attempt to baffle me with figures - and succeeded. Bloody good thing you aren't responsible for drafting our power bills, they're already confusing enough.
vincent
17th Jul 2018
7:53pm
danielboonjp. You mean german wafers assembled in china. cost of production became too high in Europe. Installation of solar has become far more sophisticated too with inverter technology plus the panels are far more effective than the earlier ones. Having said that on my bushblock there are still some good old VMC panels from the mid nineties still performing strong. Will install a new system on my place, not on the house but the shed. The cost has come down so far that it is still viable, apart from the fact that power outtages are a way of life in the country. When battery technology develops and you will be able to sell your excess power on the spotmarket, wow that will change things. My old lead acid batteries were not that bad either but take a bit more maintenance, It remains to be seen if the lithium ion batteries will last the distance. Ask the tradies with their powertools, Convential batteries easily 10yrs plus. In my RV they are over 10yrs only ever charged on solar and working 24/7.
The whole electricity supply chain is one unholy mess.
It starts with the supply itself and the manipulation of the spotmarket to maximize profits, nothing to do with demand or availability of power. Just plain greed and this cost is passed on to the retailer and you.
Coupled with a retail system that is not transparent and there you have it.
Confusion all around and the customer is dudded again.
Forget about all the rants in this thread about global warming etc, just do your sums and if solar stacks up on its own. Just do it, it makes sense financially and if it makes you feel better then that is a bonus.


Join YOURLifeChoices, it’s free

  • Receive our daily enewsletter
  • Enter competitions
  • Comment on articles