![\"Energy](\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/07\/free-battery.jpg\")
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Energy Australia — the country’s third largest electricity retailer — is offering to install a solar and battery system for no money upfront, provided…<\/p>\n
They call this the ‘Solar Home Bundle’ and before I go any further, I’ll point out that “no money up front” is very different from “no money at all”. \u00a0You will pay for the solar system and battery over 7 years through your electricity bills.<\/p>\n
It doesn’t look like a good deal to me, and I’ll explain why.\u00a0 But it’s not an obviously disastrous deal and may appeal to some.\u00a0 If you want to go for it, knock yourself out.\u00a0 All I ask is you go with your eyes open and fully aware that you are potentially locking yourself into paying electricity prices well above market rates for more time than it took Leo Tolstoy to write War and Peace.<\/p>\n
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My great aunt was reading this book when it was struck by a piece of Nazi shrapnel.\u00a0 Luckily, she wasn’t hurt because no one gets through War and Peace.<\/p><\/div>\n
Information on the deal is on the official EnergyAustralia Solar Home Bundle page<\/a>.\u00a0 Note that to get all the available information, you will have to follow links to other pages, such as the Terms & Conditions document and\u00a0the Systems Contract document<\/a>.<\/p>\n If your application for the Solar Home Bundle is accepted, Energy Australia will install a rooftop solar system and a battery for no immediate cost.\u00a0 Instead, you’ll pay for it every month for seven years.<\/p>\n It’s different from the usual “buy now, pay later<\/a>” arrangement because, instead of paying a fixed amount each month, what you pay is based on how much electricity you use.\u00a0 You will need to pay 30 cents per kilowatt-hour for that electricity.\u00a0 The price is the same whether the electricity comes from the solar panels, the battery, or the grid and is fixed for 7 years.\u00a0 There is also a 94 cent per day supply charge, which is not fixed and can increase1<\/a><\/sup>.<\/p>\n Because there are retailer plans that will supply grid electricity for considerably less than this right now and potentially much less in the near future, I’m expecting you’ll be at a significant financial disadvantage for the full seven years if you take up Energy Australia’s Solar Home Bundle.<\/p>\n EnergyAustralia isn’t offering their Solar Home Bundle to just anyone in NSW, but it is available to most people that meet their criteria.\u00a0 By entering addresses from across the state…<\/p>\n …I found it’s available in most towns and cities, including Wagga Wagga, Narrandera, and Broken Hill.\u00a0 But some rural locations, such as Mildura, Moree, and Lightning Ridge miss out.<\/p>\n Update 3:00pm 18th July 2022: <\/strong> At some point in the past few days — possibly after this article went live this morning — EnergyAustralia severely cut back on the number of locations where this deal is available.\u00a0 Rural locations such as Wagga Wagga, Narrandera and Broken Hill are out and there is only limited coverage in places such as Sydney.\u00a0 Eligibility appears to vary within suburbs, so the only way you can know is to enter your address on their site and hope they’ve got it right this time.<\/em><\/p>\n On top of living in the right place, you also have to meet a heap of eligibility criteria, such as not already having solar panels and being able to work outside an iron lung.\u00a0 Energy Australia spells them out here:<\/p>\n On top of these conditions, Energy Australia will only offer the deal to people they consider creditworthy.<\/p>\n One of the criteria above is your home must consume a minimum of 16 kilowatt-hours of electricity per day.\u00a0 Note they actually mean an average<\/strong> of at least 16 kilowatt-hours a day.\u00a0 While this is more than the typical home consumes, plenty of households consume this much or more.\u00a0 The 16-kilowatt-hour minimum does not apply to electricity consumed by hot water systems or other devices on controlled loads.\u00a0 EnergyAustralia will check your consumption habits.<\/p>\n There’s nothing to stop you from reducing your electricity consumption after you get the Solar Home Bundle, but large reductions probably aren’t a realistic option for most homes.<\/p>\n When I said I wanted a solar system and entered a variety of locations on the EA website, I was told they would install a 5.67 kilowatt solar power system.\u00a0 Obviously, there must be room on your roof for a system that size, but there’s room for that much on most residential roofs.\u00a0 Here’s a screenshot of what Energy Australia said I’d get, taken directly from the horse’s website:<\/p>\n Note the “System Value” figure of $14,820 is not its value to you.\u00a0 That’s its value to EnergyAustralia.\u00a0 It’s how much you have to pay if you get the Solar Home Bundle and then immediately say, “Nah, I don’t want to be part of this deal anymore.”\u00a0 It declines over time in proportion to how much of the 7-year period is left.<\/p>\n The 5.67 kilowatt solar system you get with the bundle is smaller than what I recommend for anyone with enough roof space.\u00a0 Generally, I suggest around 6.6 kilowatts<\/a> as a minimum, but if it’s not difficult to install more then I recommend more.<\/p>\n More solar panel capacity is always good. Unless, of course, you are passing the current through your goolies like this chap.<\/p><\/div>\n This is because the extra capacity normally more than pays for itself, and it future-proofs the home against increases in electricity consumption, which will happen if and when an electric car<\/a> is bought.<\/p>\n The panels used by Energy Australia in the Solar Home Bundle will be one of two possibilities:<\/p>\n These are both reliable panels from manufacturers we can recommend<\/a>, but they are low-cost solar panels.\u00a0 You won’t be receiving high-end panels with the bundle.<\/p>\n The battery system is a 10.1 kilowatt-hour Alpha ESS<\/a> SMILE 5.\u00a0 Its usable capacity is 9.7 kilowatt-hours.\u00a0 The solar inverter is part of the battery system, which makes it an “all-in-one” that doesn’t require a separate inverter.\u00a0 This is one of the lowest-cost all-in-one battery systems<\/a> available.<\/p>\n The JA solar MBB solar panels have a 12-year product warranty.\u00a0 The only Trina panels matching EA’s description are Trina Vertex panels and they have a 15-year product warranty.\u00a0 But note, you don’t get to pick which panels are used, so you can’t choose the one with the longer warranty.<\/p>\n Both panels have a 25-year performance warranty.<\/p>\n The batteries of the 10.1 kilowatt-hour Alpha ESS system have a 10-year warranty, but the rest of the system only has five years warranty.\u00a0 This means — according to the battery systems warranties — if you own the battery system and the hybrid inverter part breaks down after 5 years, you won’t be able to use the batteries unless you pay out of pocket for the hybrid inverter to be repaired or replaced.<\/p>\n When the solar power system and battery become your property, either when the seven years are over, or you pay to end the deal early, any remaining warranty will be transferred to you.\u00a0 Note this means, apart from its batteries, the Alpha ESS SMILE5 won’t be in warranty if you buy your way out after five years.<\/p>\n Energy Australia says they will make every effort to have the warranties transferred over, but doesn’t guarantee it.\u00a0 This is because it’s possible for the manufacturers to disappear and take their warranty support with them.<\/p>\n I think Australian Consumer Law may have something to say about that, but I’m not a lawyer.<\/p>\n As the solar system and battery belong to EnergyAustralia for seven years, they are responsible for repairs and maintenance within that period.\u00a0 Once ownership is transferred, it’s all up to the owner.<\/p>\n The Alpha-ESS SMILE5 should be able to provide backup power, but no mention is made of this in any Home Solar Bundle documents.<\/p>\n Before getting the Solar Home Bundle, I recommend confirming with Energy Australia that your battery will be able to provide backup power during a blackout.<\/p>\n Despite having a solar system and battery installed, for the seven years of the deal, you won’t get:<\/p>\n In addition, you won’t be able to change to a cheaper electricity plan for seven years.\u00a0 Right now, there are plans available that charge much less than the 30 cents per kilowatt-hour the Home Solar Bundle charges.\u00a0 For example, AGL’s Residential Flexible Saver is 22.24 cents per kilowatt-hour.<\/p>\n I’ve searched different areas, and it always says the charge per kilowatt-hour is 30 cents.<\/p><\/div>\n There is a supply charge of 94 cents per day, which is not fixed and can increase.<\/p>\n The 30.02 cents households pay with the solar home bundle is 7.78 cents more than the 22.24 cents AGL is currently offering.\u00a0 While not an extreme difference, it does add up.\u00a0 For a home that consumes an average of 20 kilowatt-hours per day it will result in the home paying $568 a year more.\u00a0 That comes to $3,976 over 7 years.\u00a0 Even if a home averages only 16 kilowatt-hours of electricity consumption per day — the minimum the plan allows2<\/a><\/sup> — then the extra amount that will have to be paid is:<\/p>\n However, even if you only consume the minimum amount, I expect the extra amount you’ll need to pay for electricity will be more than this because I’m expecting electricity prices to fall.<\/p>\n Electricity prices are currently high, and — provided we avoid a major economic slowdown — I expect they’ll remain high next financial year.\u00a0 Depending on how long current high wholesale electricity prices<\/a> last, they could rise even higher next year.<\/p>\n But after that, I expect a large drop from their current high levels.\u00a0 It’s impossible to know for certain, but I would not be surprised if electricity prices over the next 7 years average 4 cents or more lower than they are now.\u00a0 This would mean those with the Solar Home Bundle would pay an average of around 12 cents more per kilowatt-hour for 7 years.<\/p>\n You can exit the Solar Home Bundle deal any time you want — provided you fork over money to Energy Australia.\u00a0 The amount is $14,820 when it’s first installed and steadily declines by $5.80 a day until it’s $0 after 7 years.\u00a0 Here’s the exit charge after each full year has passed:<\/p>\n After seven years the deal ends, and ownership of the system transfers to you, whether you want it to or not.\u00a0 But I think you’d have to be kind of nutty not to want the deal to end, because — apart from (hopefully) backup power — it gives no benefit.<\/p>\n You must pay the exit fee to EnergyAustralia if you sell your home before the seven years.\u00a0 This means getting the Solar Home Bundle is a bad idea unless you are confident you’ll stay where you are for seven years.\u00a0 Of course, seven years is a long time, and people’s situations change, so you should consider this risk before committing.<\/p>\n While the 7-year deal is in place, the household can’t use any concessions for electricity.\u00a0 This means if you have a concession or think you’ll become eligible for one due to age or reduced income, it makes the deal worse for you.\u00a0 This is a bit of a problem because older people are more likely to be confident they’re not going to move for a long period, but are more likely to become eligible for energy concessions.<\/p>\n In my opinion, EnergyAustralia’s Solar Home Bundle is a poor deal because:<\/p>\n If the price of electricity over the next seven years averages only around 3 cents lower than it is now, and the average savings that could be obtained from using other electricity plans comes to 11 cents per kilowatt-hour, then the extra amount on electricity bills over seven years will be:<\/p>\n If you end up paying $5,000 more than you need to for electricity, then you will have effectively paid that much to receive:<\/p>\n As I expect the cost of both solar and batteries to fall over the next 7 years, and because I think they’ll also improve in quality, I think a household is likely to be better off saving $5,000. They could use that to buy a large brand new solar system or put it towards a new solar and battery system.\u00a0 In 7 years’ time it may even be possible to buy a good quality solar system and a battery for that much.<\/p>\n But waiting 7 years to get a solar power system is a bad idea.\u00a0 Because home batteries<\/a> don’t yet provide a clear financial return in NSW — at least not for any household with near normal electricity consumption — it will make much more sense to get rooftop solar now<\/a> and put off getting a home battery until it’s clearly worthwhile.<\/p>\n A household can be in a much better position if it gets its own rooftop solar because it will provide an immediate benefit without waiting 7 years for savings.\u00a0 It’s unclear how much it will save over seven years, as it will depend on what happens with electricity prices, solar feed-in tariffs<\/a>, and the amount of solar energy the home self consumes.<\/p>\n But for a home that uses an average of over 16 kilowatt-hours a day, a 6.6 kilowatt solar system can save well over $1,000 a year.\u00a0 If the savings average to $1,000 a year over 7 years, then a household could have a good quality system installed for $5,000 and come out $2,000 ahead.<\/p>\n The advantages of getting your own solar system are:<\/p>\n The drawback is you will have to pay for it.\u00a0 But the benefits of solar power are so large that if you can’t pay for it out of pocket, it can make sense to finance it<\/a>.<\/p>\n If, thanks to the financial benefits of solar and paying less for grid electricity, a household is $6,000 better off after 7 years and also has a larger and better warranted solar power system, I’d say they would be in a much better position than the alternative of owning a smaller solar system and an out of warranty battery system.<\/p>\n Generally speaking, a home battery isn’t going to pay for itself for normal NSW households at the moment.\u00a0 But if you can make it work for you, or you want one for non-financial reasons, then please get one as it will help lower electricity prices for others and aid the integration of renewable energy.<\/p>\n If you do get a battery system now, in addition to the usual benefit of storing solar energy for use at night, it’s also possible to receive payments from joining a Virtual Power Plant (VPP).\u00a0 How much financial benefit these provide varies and their terms are confusing, but if they provide an average of $250 net benefit a year, then over 7 years, that would come to $1,750.<\/p>\n Many people will buy electric cars in the near future, which will considerably increase the amount of electricity homes consume.\u00a0 An EV driven the average pre-pandemic distance of 38 km a day will increase a household’s electricity consumption by around 7 kilowatt-hours per day or 2,500 kilowatt-hours a year.\u00a0 So, if a household gets an electric car while paying 30 cents for every kilowatt-hour of electricity because they’re on the Solar Home Bundle deal, it will add a hell of a lot to electricity bills.<\/p>\n How much extra will depend on how the EV is charged.\u00a0 Because homes could charge it with energy from their own solar system and\/or off-peak electricity, charging an EV<\/a> could be 20 cents or more cheaper.\u00a0 The amount of money saved annually by not paying Solar Home Bundle prices for charging an EV that consumes 2,500 kilowatt-hours will be:<\/p>\nHow It Works<\/h2>\n
No Financial Benefit From Your Solar + Battery For 7 Years<\/h2>\n
Where You Can Get It<\/h2>\n
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<\/p>\nEnergyAustralia Solar Home Bundle Criteria<\/h2>\n
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<\/p>\n16+ kWh A Day<\/h2>\n
What You Get For No Money Down<\/h2>\n
![\"Energy](\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/07\/bundle_details.png\")
<\/p>\nIt’s A Small Solar System<\/h2>\n
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Solar Panels<\/h2>\n
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Combined Inverter & Battery<\/h2>\n
Warranties<\/h2>\n
Warranty Transfer<\/h2>\n
Repairs & Maintenance<\/h2>\n
No Guaranteed Backup<\/h2>\n
What You Don’t Get<\/h2>\n
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![\"AGL's](\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/07\/bundle_charge.png\")
30 Cents Per kWh Isn’t Cheap<\/h2>\n
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Lower Electricity Prices Likely<\/h2>\n
What If I Want Out?<\/h2>\n
![\"Energy](\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/07\/bundle_exit.png\")
<\/p>\nWhat If I Don’t Want Out?<\/h2>\n
What If I Want To Move?<\/h2>\n
No Concessions!<\/h2>\n
It’s Not A Great Deal<\/h2>\n
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Get Your Own Rooftop Solar Panels<\/h2>\n
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Getting A Solar Battery Now<\/h2>\n
Getting An EV<\/h2>\n