Thinking of getting solar panels? You’re not alone: a quarter of Australian homes already have rooftop solar, and that number is rapidly growing. It’s recognised as a great investment both financially and for our energy future – win-win! For an initial upfront investment, you can save hundreds on your power bill for decades to come, and research estimates that over 90% of households with rooftop solar think they made the right financial choice.
Of course, any decision involving thousands of dollars upfront is something that you want to spend some time thinking about. And it’s hard in today’s time-pressed world to find that time, so the team at energy comparison website Econnex have done the hard yards for you to explain what you need to know about solar panels in 2021.
This article covers a few topics, so feel free to skip ahead if something catches your eye:
- What kind of solar panel system is right for me? How much money can I save with solar panels?
- How do solar feed-in tariffs work?
- Solar power, for a sustainable energy future
What sort of solar system is appropriate for me??
There are some initial decisions you need to make when deciding what kind of solar panel system to install; but don’t worry, it’s not as technical as it sounds. It’s pretty simple.
The main decision you’ll be making is whether your solar panel system should be on-grid, off-grid, hybrid, or battery-ready.
Grid-connected solar panel systems
Most of Australia’s solar panel systems are connected to the national electricity grid. These systems use up the power your solar panels collect first and then switch to grid electricity. They don’t provide solar power after dark; they’ll also only work on limited capacity on overcast days, because of the lack of sunshine. However, with a grid-connected system, you can sell power back to the grid.
Off-grid systems
These systems are completely disconnected from the national electricity grid; no power bill, just the power of the sun. They’re particularly popular in remote locations because they can work everywhere that the sun shines no matter how isolated. But they won’t collect solar power after dark; they require backup batteries to store solar power during the day. That provides power to keep the lights on and your fridge running at night.
Hybrid solar systems
These are grid-connected systems that include a back-up battery system that stores surplus solar power. This means you won’t rely on the grid at night and can feed more power back to the grid.
Battery-ready systems
Hybrid solar systems are more expensive to install. You may not be certain you want to make that initial commitment, but don’t want to rule it out either. Battery-ready systems mean that your solar panel system is equipped with a hybrid inverter allowing battery installation in the future.
So, which solar panel system is right for you? This depends on a few factors. Your average suburban household is unlikely to consider off-grid. But it could be perfect for your retired parents’ rural farm. The next big question is: battery or no battery? This depends on when you use power. Is your family is at work or school during weekdays? You’re probably not using most of the solar power your panels collect. But when you all get home around 3-5, you’re still on peak times; having access to stored solar power reduces your grid power consumption.
This can be a great cost-saver for larger families. For single-person households or couples without children, not so much. Battery prices are falling year on year; for now, it makes financial sense for most households to get a grid-connected system and add a battery in the future. It’s not surprising that grid-connected systems power so many Australian homes!
How much can I save with solar panels?
A lot! Canstar Blue Research surveyed 1,500 households with solar panels nationwide. They found their power bills averaged $348 less per year than households without solar. How much you can save depends on a few factors; mostly, it’s where you’re living, because power costs vary from state to state. The next factor is your payback period, which varies depending on how much you paid for your solar panels.
Finally, it depends on whether you’re getting the best feed-in tariff available; different energy providers will offer different solar feed-in tariffs. So shop around to make sure that when you’re selling power back to the grid, you’re getting the best deal. (More on that from Econnex, on their Best Solar Feed-In Tariff, feature highlighting offers from 20+ energy providers.)
Want to know more about average per-state payback periods? Mosey over to consumer watchdog CHOICE’s feature on solar panel payback times.
How do solar feed-in tariffs work?
Most electricity providers will offer solar feed-in tariffs (FiTs), meaning you can sell solar power back to the grid. In exchange, you get a credit on your power bill. Your rooftop becomes a tiny power station, supplying power to the national grid. At the same time, you’re reducing Australia’s reliance on fossil fuels, helping our switch to renewable energy – win-win!
The Solar FiT credit you’ll receive varies depending on:
- Type of solar power system
- The minimum amount set by your state/territory government
- Whether your retailer offers a boost in addition to that minimum feed-in tariff
As we’ve mentioned, to be eligible for FiTs, your system needs to be connected to the grid. (It can’t feed power back to the grid otherwise!) Once your solar system is installed and signed off, contact your electricity provider. They’ll ask you to fill out a solar connection form and submit documents evidencing your system was installed by a licensed professional. Your meter may need to be upgraded or reconfigured to measure how much solar you’re exporting. Finally, you’ll need to sign up for an electricity plan that offers solar feed-in tariffs.
There are several types of solar feed-in tariffs, which Econnex covers in detail here. The most important thing to know for now is that you can generally choose from flat rate or time-varying; the latter usually involves peak, off-peak, and shoulder periods. You’ll receive the highest FiT if you’re exporting during peak times; for example, with a solar battery, storing daytime surplus solar power and exporting it in peak-hour evenings makes financial sense. (However, solar batteries can be expensive, so this may not be reason enough to get a battery.)
When comparing FiTs, there are a few things to think about. FiTs vary with every retailer, state, and distribution network. Electricity providers may offer a higher FiT in exchange for increased electricity rates and lower discounts. So a higher FiT may not lead to a better deal for you; it depends on when you’re using your grid electricity, your usage rates, supply rates, discounts, and contract periods.
Solar power, for a sustainable energy future
Going solar sure feels good when you open your bill and see how much cheaper it is. But that’s not all; it feels good knowing you’re powering a better tomorrow. You’re reducing your carbon footprint, feeding surplus power back to the grid, and helping others to reduce theirs! Currently, Australia only harnesses about 5% of our solar capacity. There’s a reason they call us the sunburnt country: we have a lot of sunshine. And the more we harness that renewable resource, the better for our energy future.
Currently, a quarter of Aussie homes have rooftop solar. But if every rooftop in Australia went solar and exported to the grid, we could generate 22x more solar power; that’s more than the annual grid power consumption for the whole country.
Solar is a game-changer, and every rooftop makes a difference. With solar, you’ll save money for what matters the most to you, and save the planet too. The future is bright!