GENERATING your own electricity from the sun is not as profitable as it once was, and it’s fair to question whether buying solar panels today is worth the cost.
The generous government incentives that were offered five years ago have all but disappeared, but solar panel prices also have plummeted, and battery storage technology — still new and expensive — promises to shake up solar again in the coming decade.
Energy experts say your financial benefits from solar now depend on how you consume electricity.
When state governments were paying feed-in tariffs of more than 40c per kilowatt hour on energy you sent back to the grid, it was best to use your appliances at night and export power during the day. Now, when new solar systems only receive retailer payments of about 6-10c per kWh, it’s best to use your solar power during in the day.
“It’s always going to depend on the individual,” says Laura Crowden, spokeswoman for energy comparison service iSelect.
The price of a large 5kW system cost more than $20,000 four years ago but today is less than $8000, while smaller 2kW systems now cost around $4000.
A report by consumer group Choice says before installing solar you should get multiple quotes to ensure you’re getting a good deal.
“Assess what energy you currently use and the system capacity you need and can afford,” it says.
“If you can’t afford the upfront costs, consider solar leasing and power purchasing agreements.”
The time it takes for solar panel purchase to pay for itself varies between states and system sizes, but is generally between four and eight years, so it’s cost-effective for people who stick around.
Research by iSelect found that most households with solar panels believe it reduces their annual energy bills by about half. “Queenslanders and South Australians are saving more off their electricity bills than other states,” Crowden says. This is partially due to their previous high feed-in tariffs and because these states get more sunlight.
Crowden says there is a lot of consumer confusion about solar. “Some of the most confused are people who have bought or rented a home that has existing solar panels on it,” she says. Existing feed-in tariffs usually stay with the system, although this may vary so it’s wise to check your state government’s website.
“A lot of people forget that even if you have got solar, you still need to be on a good value plan. Very few households get all their power from solar energy so a proportion will have to come off the grid,” Crowden says.