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

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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?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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46 Comments

Total Comments: 46
  1. 0
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    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.

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      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.

    • 0
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      Interesting how half truths and lack of knowledge can can put forward as fact.

  2. 0
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    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 ]

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      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!!

    • 0
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      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.

  3. 0
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    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.

  4. 0
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    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.

  5. 0
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    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.

    • 0
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      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!

    • 0
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      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.

    • 0
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      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.

  6. 0
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    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.

    • 0
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      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.
      asa.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.

    • 0
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      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.

    • 0
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      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.

    • 0
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      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.

  7. 0
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    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.

  8. 0
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    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.

  9. 0
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    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.

  10. 0
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    No mention of savings for a Perth retirees. We do belong to Australia you know!

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