Energy Prices Estimated To Rise 20-30% Over The Next 3 Years
By Finn Peacock – Chartered Electrical Engineer, Ex-CSIRO, Founder of SolarQuotes
At the end of last month, I spoke with some analysts from a major bank, who were scoping out the state of the residential solar energy industry in Australia.
I told them the same thing I tell everyone – solar energy is the cheapest form of electricity for a household. Period.
But what caught me off guard was their projections for electricity price increases over the next 3 years.
They believed, based on well-researched data, that electricity prices in Australia would increase by around 20-30% over the next 3 years so retailers could capture the increase in wholesale costs that have *already* occurred.
Twenty to thirty percent!?
In estimates that I’ve used in the past, I’ve projected electricity prices to increase by 3-5% per year when calculating how much of a good investment solar is for a household.
I considered this level of increase in prices year-over-year to be a little bit pessimistic.
But a 20-30% increase over the next 3 years – that’s around *double* my projections.
It now vindicates all the people who told me that I was putting too much faith in energy companies to keep prices down for the average Aussie.
So that’s the bad news, for all of you homeowners out there without solar.
Every cloud has a silver lining, however – and the silver lining of an 8% increase in energy prices year-over-year is that it makes solar an even better investment for a home than it already is.
The reason why is very simple – every unit of solar energy that you use in your home is a unit of energy that you don’t need to buy from the grid.
So with grid energy increasing in price – the value of ‘free’ generated solar energy goes up in lock-step with it.
What does this mean for you?
If you don’t have solar for your home – you should be beating down the door of a solar installer for a quote on a new system to soften the blow of these increased energy prices.
And just to be clear – while these analysts were very confident in their projections about the increase in energy prices – they were just educated guesses based on the rise in wholesale energy prices. Anything can happen in the future.
But does anyone really believe that energy prices are going anywhere but up?
Click the link below to go to my "Solar 101" guide (a 10 minute read), where you can learn the bare minimum I think you should know about solar before getting quotes, so you can prepare to inoculate yourself against rising energy costs.
Solar 101 – A Beginner's Guide
Don’t say I didn’t warn you-
Finn Peacock
About Finn Peacock
I’m a Chartered Electrical Engineer, solar and energy efficiency nut, electric car and e-bike owner, dad, and founder of SolarQuotes.com.au. My last “real job” was working for the CSIRO in their renewable energy division. Since 2009 more than 785,000 Australians have used my site to get quotes for high quality PV systems from pre-vetted solar installers.