Solar provides a range of benefits for the environment but is it worth it financially to install solar? We are going to explore the financial feasibility of installing solar panels on your home in 2020.
Solar power allows you to generate your own electricity by harnessing power from the sun. In Australia, we have one of the harshest climates in the world with plenty of glorious sunshine.Â
To understand if solar is worth it in 2020, we must first understand a few things:
The cost of solar depends on the size of the system, where the system is located, site specific variables such as the type of roof it is being installed, and the quality of the components being installed.Â
At Teho we suggest you install high quality gear to ensure you get the most out your solar investment.Â
On average we anticipate a good quality solar system to cost around one thousand dollars per kilowatt of solar installed. The average system being installed in Australian in 2020 is a 6.6kW system.Â
To make things simple, we expect solar to cost six thousand dollars for a 6.6kW solar system installed in 2020.Â
Saving money with solar comes from two key channels:
The largest benefit of solar is to consume as much energy from the solar system. Solar power generates energy when the sun is out and shining which is obviously during the day. This energy you create will be first consumed by the home. For every kilowatt hour of solar you consume it is a kilowatt hour you don’t spend on power from the grid.Â
While the sun is out shining, it can be difficult for homeowners to consume all of the solar power they are generating. Businesses have a better chance of consuming all the power that is generated because most businesses operate during the day.
Excess power that isn’t consumed by the premises will be exported to the grid. This export in kilowatt hours will be credited back to your energy bill from your energy retailers. In some scenarios you can even get your solar installation to be cash flow positive.Â
The cost of electricity varies tremendously depending on your location. What is consistent, is how expensive it is!Â
With some of the highest power prices in the world Australian electricity from the grid will cost you a lot with very little in return. You will always be renting electricity rather than owning it.Â
The cost of energy in NSW is around twenty five cents per kilowatt while SA can be paying as high as forty cents per kilowatt.Â
The credit on your power bill from solar you have exported to the grid again varies on the location of the property. The average solar feed in tariff is around ten cents per kilowatt for power exported to the grid.Â
Much like the last few points, this depends on where the system is installed, what aspect the solar is installed and other site-specific variables.Â
The average solar system will produce four times its name plate. For example, a 6.6kW solar system installed in 2020 will generate 26 kilowatt hours per day.Â
While most families are not home during the day, we anticipate the average home can consume 30% of the electricity generated from the system with the excess sent to the grid.Â
Consider this.Â
A 6.6kW system generating 26kWh’s per day. The home uses 30% of the solar power saving 25 c/kW (7.8kWh’s per day x 25c/kW) = $1.95 saving per day.Â
70% exported back into the grid (18.2kWh’s per day x 10c/kW) = $1.82 saving per day.Â
The total annual saving of a 6.6kW solar system is approximately $1,376 per year.Â
The average return of investment is 4.7 years!Â
