Is It Worth It for Me to Get Solar Panels?

I've had many sales people and door knockers recently offering to sell my solar power. I've done extensive research and believe it may not be cost effective considering the upfront cost is $6000 - $7500 for a basic system.

  • I am a single person household
  • My average daily power usage is only about 5Kw (compared to other people which is around 8Kw per day). This equates to about $300 per quarter.
  • I tend to maximise my power usage in the mornings or late at night when it is shoulder/offpeak, therefore avoiding peak times.
  • I don't have an aircon, swimming pool, or any other "hungry" appliances.

For me personally, my biggest expense is the daily supply charge which works out to be around $1 per day. To eliminate this cost, I would need to go completely "off the grid" which would require batteries. Battery technology is still exorbitantly expensive and not mainstream yet so that is not an option for me at the present. I would also need to pay for power during nightly consumption or on cloudy days when there is little to no sun.

The salesperson did admit that my power consumption is very low but was trying to sell to me how much "money I could make" by installing solar panels and generating & selling any excess power back to the grid. The main power companies are offering 17c per kilowatt to buy the excess power that I generate but would then sell it back to me at 30c per kilowatt (only when I require it). Furthermore, I don't anticipate that this feed-in tariff will stay nearly as high in the future due to mass production of solar generation by end consumers and surplus supply becoming the norm. Considering the feed-in tarrif was originally around 60c a few years ago, historically speaking it will likely be driven down further.

Some other concerns include wear & tear (cost of repairs after warranty), obsolesce of current technology in the near future, and the fact that if you were going to sell your house after less than 5 years you are probably not going to get your investment in solar back.

I think for bigger families with big power bills it makes sense but not for single person households. Any thoughts or recommendations?

Poll Options

  • 20
    Yes
  • 45
    No
  • 4
    Unsure

Comments

  • Probably not but you could see how much value it adds to your property if you were looking to sell in the next few years.

    • Hardly any. The biggest cost in Australia is price of land then build costs (infrastructure). If you put in a $2k oven today, you won't get the buyer paying $2k for the oven tomorrow.

      • Factoring in depreciation and other things I don't think it would add much value to a property.

        • Two things work against you:

          1. If you are a buyer how can you tell visually how long ago was the system installed
          2. How does the buyer perceived value of the panels

          Panels should last for 25 years. Inverters have 10 year warranties. So depreciation takes a long time.

  • upfront cost is $6000 - $7500 for a basic system.

    Can you 2x that in 12 months in savings?

  • Work out how long it will take you for a ROI and make your decision based on that.

    IMO it wouldn't be worth it financially to you, but if you want to do your bit for the environment you'll get a warm fuzzy feeling from installing panels.

    A recent survey conducted by Origin Energy revealed that 85% of Australians thought solar panels added value to property.

  • Why is it $6k-$7k?

    Our good quality entry level 6.4kw system was $3900.

    You are in Sydney. Check out https://captaingreen.com.au/. They will do 10.3kw for $5500. 6.6Kw will be <$4000.

    Get in quick because prices rise 7% on 01Jan 2021.

    Sign up your electricity with AGL or Origin. both give good feed-in rates

    • Agreed with this.
      If in Sydney a decent 6.2kw system can be had for $4000-$5000 including a ABB inverter. Feed in with AGL is 20cents per KW. Rough calculations of 20kw per day @ 365 day would net you $1400+ per year.

      Could be worthwhile if your roof is clear of any tree/shade and you're intending to stay there for a few years.

      • decent 6.2kw system can be had for 4-5kw

        Okaaaaay

        Awesome quick edit

      • I think AGL are down to 18c now on the Solar Saver plan.

        I don't know what our daily rate is (without looking it up) but we've gone from $1400-$1600/yr (yes, it's ridiculous for a 1.5 person household) down to constantly being in credit. Still use the AC(s) a lot, the oven daily, 3 loads of washing a week, etc.

        Payback was originally estimated at 3.5-4yrs but it looks like it will be <3 years.

        I don't understand the comments above unless none of them actually have solar.

        My next project that we are considering is at the 8 unit apartment complex (my place). 18kw of panels and a distributed system feeding the common areas and 8 residences. $33k

      • How many years until it pays for itself and pays for its own removal when it come time to upgrade. Not yours personally, I mean in general how long do you think it takes to pay off solar panels these days in Sydney.

        • How many years until it pays for itself and pays for its own removal when it come time to upgrade. Not yours personally, I mean in general how long do you think it takes to pay off solar panels these days in Sydney.

          I can't give a general answer as the costs (and quality) vary too much.

          You can get 6.6kw for $2200. I wouldn't buy this.

          We got what I call "entry level, good quality" 6.6kw $3900. Pay back is 2.5 years for us with 20c NFIT (AGL solar savers).

          The 1.5kw system on my old house in 2010(??) was $1500 and paid for itself in 18 months on 60c GFIT. It's still working fine but they did have the inverter repaired under warranty (thanks Origin Energy) in 2018.

          My calcs on a top of the line 6.6kw system with micro-inverters was giving a 6 year payback. We really aren't sure where we'll be living in 6 years so couldn't see the value in that investment for our situation.

          Why do you need a removal cost? Panels have 20+years warranty. Get an inverter from an established company with a 10 year warranty. For me, that's just over-thinking the situation.

          • @brad1-8tsi: I guess when it’s time to upgrade or replace the system you replace it with would probably offer to haul the old one away foe free.

          • @brad1-8tsi: Was your old inverter that Origin Energy replaced under warranty a Clenergy? My system was also installed around 2010 and I had two of those replaced under warranty; the second time it died I got the third degree about what I was doing that killed it! When the third one died (thanks to a possum) I went elsewhere for a different brand. The Clenergy inverters did not have a good reputation; apparently Origin Energy bought masses of the things and were constantly needing to replace.

            • @miwahni: It wasn't that.

              I haven't got the paperwork anymore but it sounded like a big brand but wasn't. Something like Sanyo but not. Sankyo maybe.

              They've gone out of business now so I appreciated Origin standing behind their product (as the law states they should)

    • Central Coast not Sydney, but I think the quotes I got were a rip off. They seem to be over charging. I will definitely do more research on companies and prices. Cheers.

    • Do you have a (near) ideal solar roof structure?

      I have an Federation house extended and with 2nd storey added. Panels have to go in many different parts of the roof includinh top and lower storey for 6.6kw (18 panels).

      I have been told I need 18 optimisers! which brings cost to ~$4800! :(

  • How is your hot water heated? How do you heat in winter?

    • All electric, nil gas. Winters are mild, don't use heating.

      • are you sure you use electricity for hot water? If so it's impossible to get that 5kwh per day because the amount of energy to keep your water tank warm (without even using it) will be higher than that. If you're on controlled load for hot water then you can accelerate savings by letting the tank warm up during solar hour.

  • NSW and QLD 6.66w system for $3k through One Big Switch
    https://welcome.shinehubsolar.com.au/2999-solar-panel-offer-...

    "Switch to solar with an amazing value on a premium quality solar system with a 25 year panel and 10 year inverter warranty.
    Comes with Longi 370W monocrystalline half-cut panels, a Kehua solar inverter with free energy monitoring, installation, GST, and rebates included."

    • That's pretty cheap for a full install. The salesman tried to scare me away from cheap installers who he labelled "cowboys" and that their inferior products and shoddy workmanship won't last the test of time for the homeowner who chooses to take a gamble with them. I guess it comes down to research and due diligence to find a reputable installer.

      • Use solarquotes.com.au to find an installer so you don't have to worry about installers that will disappear / go out of business before you notice something needing fixing

      • Of course a salesman of an expensive system will give lots of reasons not to buy a cheaper system.

        Personally I would not trust a place that has the overheads of cold calling sales people

  • IMWO if your home during the day and going to use a lot of power when the sun is out, it makes sense.. If not home to make the most of the sun - its not really worth it unless you go with a good battery bank

    as for adding value to your home, i feel the jury is still out on this one.

  • A couple things:
    * Going off-grid: It's not the batteries that are the issue its the special inverter that makes it too costly. Forget about trying to get rid of supply charge.
    * I have a 6.6kW, $6000 system with battery that looks like will provide $2000 benefit per year (feed-in tariffs and power that I didn't need to buy). So that's a return of 33 % p.a. and with very little risk assuming you have decent warranty period. You'll have to work out your own return based on your usage and location.

    • the cost of going offgrid is the cost of battery itself, lithium battery is still expensive due to manufacturing cost, unless scientist find a new way to further compacting energy storage, battery price will not decrease much overtime.

    • $6k with a battery? That's extremely cheap

  • $300 a quarter? No

    trying to sell to me how much "money I could make" by installing solar panels and generating & selling any excess power back to the grid

    You don't get that money back in cash. You get it back as credit.

    • You can request a cheque from the retailer but I wouldn't say it is a serious money making venture. If you need to make $40k a year you'll need a lot of panels and ability to connect to the grid.

    • That's incorrect. You can request payment of the credit into your bank account

  • 100% YES.

    I'm paying off my solar on a loan and the credit I receive per year is a lot more than my annual loan repayments…it's like getting free money in the hand (I do have a 15kw system though).

    It's a no brainer if you ask me.

  • Solar quotes tools

    If you are using 5kw a day. That is spread across the day between peak and off peak then payback might take a long time.

    Supply charge non negotiable
    5kw assuming it is evenly distributed and say 3Kw is used during daylight hours which solar is active you're saving $1 a day
    6Kw system production in Sydney say 25Kw per day Solar choice

    25kw x 366 = 9150 x 10c feed in = $915 per year + $365 saved per year.

    $6000 (would be price after STC but before any state rebates) = 4.7 years to break even

    There was a break down on why feed in is so low as only 1/3 of the cost of unit of electricity is cost of production the other 2/3 is distribution and retailing costs therefore Victoria's 10.2c is pretty close to the current environment.

    • Thanks for calculating the hard numbers for me. I'm not really a numbers person.
      In summary, it would take me about 5 years to break even ,so if I plan on living in this property for the next 5 years or longer it may well be worthwhile.
      I have much to think about…

  • If your power use is low, you could consider a smaller 3.5kw (or similar) system, perhaps get some better panels that might last for longer instead of a cheaper larger system.
    I have 5.25kw system and on sunny day often get 30kwh+. My power use is rarely above 10kwh so the excess basically pays for the supply charge plus a small credit.

    Victoria has rebate and no interest loan.
    So depending on your state, you could get a decent 3.5kw system for no upfront costs and small monthly repayments with no interest.

    But I guess cost v benefit would be marginal.

    • Never ever worth it to undersize a system. More solar more betterer. It’s that simple

    • Inverter would cost about the same.

      There is only 4 panels difference (assuming 300w panels) to get to 6.5kw and after STC the panels probably wouldn't cost that much to install.

  • Anyone heard of unified energy?

    • Yes, recommended by AGL. We just signed up with them this week. Waiting for them to start installing mid-Jan next year.

      • Any concerns there? Although they are recommended by AGL, they are still third party? I am interested at how their quotes are significantly cheaper than origin as an example.

  • In terms of shading, how much can you get away with before it wouldn't make sense to get solar?

    The parts of our roof that would be most likely to have the panels are probably partly shaded by some tall gumtree from say 2, 3 pm in winter, as well as having the hard shade of a chimney near one end.

    How do you determine how much energy you can get, or is it a guess into you actually install the system?

    • You can still get solar with shading but you need microinverters, so each panel can output individually. Slightly more expensive but still works. The installer should calculate for you the best location, in case it is better to face East or West for example where there is less shade so there is more overall sunlight on it through the year. The installer can work out the expected output of your system by looking at the roof shape and orientation on google maps satellite view. You don't have to just cross your fingers and see what you get after install.

  • Not sure where you're located but 30c kWh is very high. Go to energymadeeasy.gov.au and find a cheaper company. I'm paying 18c including GST in Brisbane. Your bill should be about $200 a quarter including supply, not $300. This will also change the solar equation.

  • I just got a 6.6KW system installed in oct in dubbo for $4400. check out http://solarquotes.com.au/ for a better price over door knockers

    it's easy to look at it and say it's only $300 a quarter, but the roi on that above price is ~3.6 years. if you're planning on living in that place for anything longer than that then it's a no brainer

  • If it’s your house and you don’t plan on moving, then yes.

  • +2 votes

    You might be better with a small system for quicker ROI. Think about the supply charge as 'battery backup rental' and you can see it makes sense financially compared to buying your own battery.
    Take advantage of the high feed in tariff in your state before it's too late. Speaking from WA which now has a 3c feed in tariff, I have paid the price for my procrastination and probably increased my pay back period by a year as a result.
    It's totally worth it for us though, in the 8 days since our 6.6kW system was installed our self-consumption is about $6 per day with only $1.50 (5kWh) imported per 24h, plus another $1 per day supply charge. Export is about 18kWh at 3c and 2kWh at 10c under Synergy's recent changes so doesn't even cover the supply charge on a perfect sunny day.

    • I like the way you think about the supply charge :)
      A paltry 3 cents FIT is rubbish. I guess the long term projection in most states will be lower FIT due to oversupply. Similar to interest rates i.e. too much money floating around.
      Another factor in my favour is the solar rebate offer which will time diminish over the next 10 years if you don't get on board with solar now.
      I'm glad it's working well for you.
      Spending a few grand on solar installation is still a hell of a lot better than "investing" that money on a car.

      • Absolutely WA has too much solar. Bottom line is that they don't have to buy any excess generation at all. SA can even turn off your exports if it is destabilising the grid.
        I think the price of a system is as low as its going to get, all-time low was October 2019 then they started fractionally rising.

        If batteries get cheaper there may be a way to game the FIT by changing to a time of use tariff, charging the battery from solar in the day for free, discharge it to the grid at a high FIT rate and recharge again at the lowest rate in the night. 2 charge cycles per 24h voids the battery warranty unfortunately. The maths definitely doesn't work at the moment but batteries will be cheaper in the future in the form of recycled used EV batteries.

  • The govt are now legislating they be able to "turn off" your solar generation… effectively cutting you off your own electricity… and any potential extra revenue that I am sure was an enticing factor.

    The outlay just does not add up.

    What I would invest in is a Power Bank… where you draw in the Off Peak electricity to charge the battery, then use this battery to run the house during shoulder and peak periods.

    • That doesn't make sense, batteries can barely pay for themselves before they are out of warranty so it doesn't make sense to get one on its own. Have you done the sums to see what you can save? And what is the evidence for the government being able to remotely switch off your solar?

    • That seems unconstitutional. Why would they do that? Considering most of the power generation is in the hands of consumers (private ownership) and companies, the govt should keep their greedy hands off it.

  • $6000-$7000 is not a "basic system" my friend. You can get a solar system for as little as $2000 after STC rebates these days.

    If you want to actually get technical about it, use the advanced calculator here and see if you actually would end up earning money. If you wanted to get even more technical, make your own spreadsheet, then check average generation for your area and solar array size. Then it's just a formula of (Daily Generation kWh - (Daily Usage kWh *0.5)) * FiT = earning per day. If that value is greater than ((Daily Usage kWh * 0.5) * Usage Rate) + Access Charge then you will be earning money. The reason I've multiplied Daily Usage kWh by 0.5 in both formulas there, is that you will find you only use about 50% of your kWh usage in the middle of the day while generating power. You will also likely find that your hot water system is usually on a controlled load tariff circuit which Solar will not help with at all.

  • If you have electric hot water might be worth looking at a heat pump to save 50-75% of your power costs