Why People Are Rushing To Buy Solar – But It's Not What You Think

By Finn Peacock
Chartered Electrical Engineer, ex-CSIRO & Founder of SolarQuotes.com.au

You've no doubt seen a lot of companies in the paper, on TV, and online shouting messages about the solar rebate being 'significantly reduced' at the end of the year.

These companies are trying to get you to rush into buying solar on the premise that it will cost you more if you wait till January.

Let us be clear – the rebate *is* set to be reduced from January 2017. By one fifteenth.

But what the less reputable advertisers don't tell you is that it is only one fifteenth.

This translates into the price of a solar system only increasing by about 4% if you wait till the new year to install.

Don't Rush Into Buying The Wrong System

The truth is that you can almost certainly save more than 4% by taking your time, doing your research and getting 3 quotes from reputable installers who won't pressure you to buy in a certain timeframe.

I'm here to say, don't feel pressured by shonky salesmen who are implying that if you don't sign on the dotted line right now, you'll lose the rebate.

At worst you'll lose one fifteenth of the rebate if you delay your decision until the New Year. A small price to pay for making an informed decision.

Suddenly all those companies screaming about getting solar before the rebate reduces look a bit dodgy don't they!

The truth is that lots of Australians should be considering solar as a matter of urgency, but for a very different reason.

If The Rebate Isn't Reducing Much, Then Why Should You Run To Get Solar?

Simply because solar has reached the point where it is the cheapest form of electricity you can put into your house.

Every quarter you don't have solar is another quarter where you are 100% dependent on expensive grid electricity, which you pay through the nose for.

So – you shouldn't need shonky advertisers peddling exaggerated deadlines to get you considering solar. 

All the incentive you need is in those high quarterly bills that you simply don't need to get in this day and age.

How The Economics Of Solar Really Work

Let's run through a quick breakdown of how solar would work in your home.

When solar electricity comes out of your panels, it will first get used by appliances in your home, with any surplus solar exported to the grid.

Electricity usage in your home is measured in kWh. The average Aussie home uses about 18 kWh per day. Depending on where you live, you'll be paying roughly 30 cents for every kWh you use in your home.

Your electricity retailer will pay you a small amount (around 7-18c) for each kWh that you export to the grid. This is known as the "feed in tariff".

Because the amount you're paid for exporting solar is small, It is better to use the solar in your home than export it. 

This is because every time you use a kWh of generated solar in your home, you don't have to buy that kWh from the grid – which will save you around 30 cents per kWh.

Because feed in tariffs are around 7-18c per kWh, self-consumed solar electricity is about 2-4x more valuable than exported solar electricity.

This means households that use a lot of electricity during the day, or can set their appliances to run on timers, are a natural fit for solar and can see very short paybacks of 4-5 years (20-25% returns).

If you are at home during the day or have pool pumps which run all day, your self-consumption can be up to 65% (with exports only 35%) and solar is likely to be a very good investment.

If you are not at home during the day (hello to all you 9-5ers!), you will typically self-consume about 30% of a well sized solar system, pushing the simple payback out to 8-10 years.

Bear in mind that this is still a 10-12% return on your investment.

(Avoid any solar company that calculates your payback based on 100% self-consumption. No-one has 100% self-consumption. The company is being dishonest to get your sale.)

A good-quality solar system has a lifespan of about 25 years.

This means that, in a realistic scenario, you could pay back a new solar system in around 7 years, and then collect ~18 years of further savings from a solar system after that.

If your home is suitable for solar, you shouldn't be spending another second sending your electricity company ever-increasing payments every quarter.

Get quotes for solar now, see if a system is right for you, and then start looking forward to reductions in your energy bills, instead of increases. It really is that simple.

This website, SolarQuotes, makes it really easy to get 3 free quotes from pre-vetted installers in our network. We've been operating since 2009, and over 270,000 Aussies have used our service to get quotes.

Our installers won't rush you with false urgency about the 'rebate reduction'. They will give you the time you need to consider your options before you decide if you want to go solar.

If you're considering installing solar panels for your home or business, SolarQuotes can help you get quotes from high-quality, pre-vetted installers quickly and easily:

“Many thanks…
I was a lost sheep in a field of wolves without your help”

– Margret, Castle Hill, NSW

 

About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division. Since 2009 over 270,000 Australians have used my site to get quotes for high quality solar from pre-vetted solar installers.

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