Power prices are on their way up so it is time to follow the Prime Minister’s lead and install solar panels on your roof.
Details of Malcolm Turnbull’s heavy-duty solar set up were revealed on Monday, after an eventful week where South Australia lost power and NSW residents also came very close to forced outages as high temperatures sent electricity consumption soaring.
According to the Australian Financial Review, Mr Turnbull upgraded the solar panels on his Point Piper mansion last year to a 14.5 hour kilowatt system, and also added a 14 kilowatt hour LG Chem battery stack, that would likely shield him from potential blackouts.
While most Australians may not be able to afford the estimated $25,000 the PM’s system cost, with power prices expected to keep rising, is it time to consider a solar set up?
THINGS HAVE CHANGED …
There have been changes to federal government subsidies for solar panels and feed-in tariffs offered by the states that reduce some of the money you get back.
Some of these changes took effect on January 1 and it seems the Prime Minister wasn’t the only one who wanted to get solar installed before the changes took effect.
Warwick Johnston, the managing director of Sunwiz, a market analyst for the solar industry, said there was a record amount of solar installed in December, more than any month in the previous four years.
While the January 1 change was probably a factor, it has only reduced the government subsidy by about 7 per cent, equal to about $150 on the cost of a system.
Mr Johnston believes rising electricity prices are more of a driving factor.
“(Price increases) had tampered off in recent years but are now rising again particularly in Queensland and Western Australia,” he told news.com.au.
He said Western Australian solar installation companies recorded their best year ever in 2016.
HOW MUCH WILL IT COST?
Mr Johnston said prices for solar panels had come down by about 10 per cent compared to last year, and a system for the standard home would cost upwards of $5000 for a 5 kWh system of about 20 panels.
If you want to add battery storage, this will double or even triple the price of the system.
Prices for storage start from $2000 for an entry level device, compared to the trendy Tesla Powerwall 2.0, which will set you back $11,000.
Mr Johnston said the Powerwall 2.0, which has 14 kWh battery, was big enough to cover the typical Australian consumption of 16 kWh a day.
“That can last you almost a full day, even if it’s cloudy,” he said.
HOW QUICKLY WILL IT PAY ITSELF OFF?
The time that it takes for the system to pay itself off based on potential electricity bill savings is known as the payback period.
This can vary depending on which state you are living in, how expensive the electricity is and what kind of system you get.
Mr Johnston said prices could vary dramatically depending on whether you also decided to install a battery to store power for later use.
This is because batteries can cost double or even triple the price of getting solar panels installed.
“Without storage, payback will commonly take about five years,” he said.
“A five-year payback on a system that can last about 25 years is a significant return on your investment.”
But if you get battery storage installed, this can extend the payback period to about 10 years, depending on which state you live in.
Even though it would take longer to pay off, Mr Johnston said installing a battery could give you power during blackouts.
“You are unlikely to be able to go off-grid … but you will be far less reliant on the grid,” he said.
WHERE YOU LIVE MAKES A DIFFERENCE
A system will pay itself off quicker for those living in Adelaide because power is so expensive there, and it also has excellent solar radiation.
Solar Choice, a rooftop solar comparison and brokerage service, said it was important for people to chose a solar system that is the right size for their home, so that they are using at least half the energy it produces directly.
If this is done, it found payback for most cities could take less than seven years. For those living in Adelaide, Brisbane, Perth and Sydney, they generally take less than five years to pay off their solar systems.
It has an online calculator that can give householders an idea of what to expect.
HOW MUCH WILL YOU SAVE?
The exact amount you will save will depend on how much electricity you use, what time of day you use electricity, how big your solar system is, whether your house is shaded or is in full sun, what direction the roof faces, whether you get a battery installed, and whether you also install intelligence software to maximise your savings even more.
To give you an idea of the savings, Nick Pfitzner, the first Australian resident to get a Tesla Powerwall battery installed told news.com.au last year that his bill dropped from about $660 to $50 for the same quarter.
SO WHAT’S IN THE FINE PRINT?
Unless you have a battery, solar panels only provide electricity when the sun is shining so if you are at home and using your appliances a lot during the day, you will get more out of your panels.
If you are at work all day then you won’t save as much money, because you won’t be using that much electricity during the day, and will still need to access the grid at night for your energy needs.
Some people run their washing machines or other appliances during the day to maximise their use of solar electricity, but to get the most out of the system, it’s a good idea to also run water heating, or space heating and cooling during the day.
The Alternative Technology Association found it was important to switch away from gas-powered hot water if households wanted to get the best value for money from solar, in its report that analysed the impact of the changes to feed-in tariffs in NSW, Victoria and South Australia.
“With space heating and hot water generally comprising somewhere between 50 per cent and 70 per cent of a home’s stationery energy needs, it is difficult to maximise the use of solar PV without using it to power one of both of these major loads,” the report said.
The report, commissioned by the Total Environment Centre, also modelled the economics of retro-fitting battery storage to an existing solar PV systems but found this was not cost effective until at least 2020.
Smaller batteries, which had a chance of being fully used over the course of the year were more likely to be better value for money than bigger batteries.
If you really want to squeeze every last drop out of your system, some companies offer added features like intelligent power monitoring.
Companies like Evergen, carbonTRACK, Redback Technologies, Sonnen and Reposit Power analyse how much electricity the household generally needs and uses weather forecasts to decide when the best time is to draw energy from the grid, and when to use solar or battery power.
Evergen claims to be able to save homeowners almost $2000 on their yearly power bill.
Reposit works in the same way but also buys electricity stored in batteries from homeowners during peak periods, and feeds it back into the grid.
Queensland resident Clint Luna said he paid about $18,000 for his Reposit system that also included 6.5 kWh solar panels, invertor and Tesla Powerwall.
“I use a lot more electricity because I have an electric car and a fairly large house but I reckon between $2500 to $3000 a year is what I’ve saved (in power bills),” Mr Luna told news.com.au.
He said he thought the system was good value, especially because they were now offering the Tesla Powerwall 2.0, which costs about the same as first version but has double the capacity.
HOW TO GET THE BEST DEAL
There are a lot of factors to consider when deciding what system to get which is why Mr Johnston suggests going to an approved solar retailer.
They will be able to provide a more accurate estimate of payback periods because they would also access the household’s electricity consumption patterns and things like whether the roof is facing the right direction.
Mr Johnston encouraged people to use a retailer recommended by solar’s peak body, the Clean Energy Council.
“They will provide a five-year whole-of-system warranty but some others might not,” he said.
“It’s very hard for consumers to tell the difference between panel brand A (versus) panel brand B. Sales people will also claim there’s are the best, that’s why it’s best to go to a retailer you trust.”
It’s also important to check the warranty periods for the battery if you get one, because some systems can be paid off before their warranty expires.
“We recommend that shoppers interested in batteries opt for smaller battery banks for now, as smaller systems have small capital outlay and faster payback (as) they are more likely to be used to the full extent of their capacity than larger systems,” a Solar Choice spokesman said.
Powerwall offers a 10-year warranty and most other batteries have warranties of between seven to 10 years.