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Installing Solar Panels – Is It Worth the Cost?

We installed a 3.0Kw solar array in June 2011. Our power bills each quarter were between $750 to $900 and rising. We are a household of 4 and run a home office, pool pump and occasionally air-conditioning in winter for heating and in summer for cooling. The house had low voltage downlights throughout. We live in a sub-tropical location, so appliances for winter heating and summer cooling are needed only a few days per year. Our constantly rising electricity bills were becoming a real concern.

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The Australian federal government provides rebates for installation of PV (photo-voltaic) cells or solar panels for generating electricity. In our case, the rebate was worth about $4000.

  • In suburban areas, the solar panels feed electricity back into the main grid using an inverter which is connected to your electricity meter.
  • The electricity meter is changed to a “smart meter” which is also installed as part of the inverter. The “smart meter” measures the amount of electricity you use (bring in) as well as the amount of electricity your solar panels are putting out. As you use electricity during the day, the meter will subtract your electricity usage from the amount of electricity your panels are making.
  • If you generate more electricity than you are using, then your excess electricity is sold back to the electricity supplier for about double the amount that you buy it for. This system applies in Queensland, where you are paid on the nett amount of electricity produced.
  • It is through selling your excess electricity back to the supplier that real savings in your power bill can be made.

We use about 1 to 1.5kW of power each hour during the day. So installing a 1.5kW solar system would only just about cover our immediate power needs.

Given that the most savings are from selling power back to the grid, we needed to install a larger system. Our roof size meant that we could only accommodate a 1.5kw system on each roof face. We opted to install a total of 3kW over 2 roof areas using a special inverter that could take power from 2 different solar arrays.

Some considerations for locating the solar panels:

  1. Direction: Roof should face north or near to north to pick up the maximum sunlight. In our case each roof faced north-east and north-west and seems to work well.
  2. Roof slope: The panels, in Queensland, ideally should be at about 15 degrees from the horizontal to pick up winter sun and not get too hot in the summer sun.
  3. Overshadowing: Make sure the panels will not be overshadowed during their peak generating times from trees, other buildings, TV aerials etc. If a panel is overshadowed, even a small amount, that panel will not generate any electricity.
  4. Peak Generating Times: generally between 10:00am to about 3:00pm is the average peak generating time for the panels. The times will increase in summer from about 8:00am to about 4:00pm depending on roof orientation.

Apart from adding the solar panels, we also undertook some changes within the house:

  1. The pool pump was wired to an off-peak tariff saving 50%
  2. The washing machine, dryer and dishwasher were also added to the off-peak tariff saving 50%
  3. The off-peak tariff cuts electricity to these appliances between 6:00pm to 9:00pm each day
  4. We removed all our low-voltage lights and replaced with energy efficient fluoro downlights. The low-volt lights each drew about 50watts per hour. The new lights draw about 15watts, saving 70% on each light.

How much did this cost?

We invested $17,500 for all the electrical work including installation of the solar panels, new meters, new wiring for dishwasher, washing machine, dryer and pool pump. Given the government rebate of $4000 the total investment came to $13,500.

How much will we save?

We just received our first solar-boosted electricity account for the spring quarter. Our bill for this time last year was $750, and we used 51.7kWh of electricity.

The current bill is $360 for the equivalent period and we used 28.8kWh of electricity, a 55% saving.

Our greenhouse gas emissions went from 5 tonnes to 2.6 tonnes, a 48% saving.

When will I get my money back?

We will save at least $1600 a year off our electricity bills with the addition of solar panels and re-jigging of our appliances. Most people try and work out how long it will take to get their money back (8.5 year in our case).

However I believe this is the wrong question; a better question is: How much return will I get on my money? I have invested $13,700 and get a return of at least $1600 per year. This means my investment is returning me 11.7% in savings off my electricity bill. This is about double my mortgage interest rate, so I am still making money.

How long did it all take?

We used a local electrician trained in solar installations, who provided us with all the suggestions for reducing power, revised tariffs for our appliances and supply and install of the solar system. We firstly had to apply to electricity supplier to make sure they would accept us supplying power to them (2 weeks). The install, re-wiring for tariff change-over to appliances, solar installation took 2 days. The smart meter was installed 2 weeks later.

On a side note, our first electricity bill came with no mention of solar and an amount owing of $950. A quick call to our provider we realised that they had no idea we had installed the solar panels. Their accounting had not updated our details. They reworked the bill to it’s current $360 (a saving off the original bill of 62% or $590).

Our experience?

I don’t know why I waited so long to install the panels, and would advise anyone to make this as part of their long-term investment.

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