Are Solar Panels Cheaper Than Electricity?

Posted in: Solar Power, Panels & Batteries
Solar Flow Team
March 6, 2023

Do you find it annoying to pay such high rates every month for electricity? Is it your goal to find ways to reduce your environmental impact that won’t drain your bank account? If so, solar power is an option worth exploring.

As the price of solar panels drops yearly, more people are choosing to supplement their regular electricity with solar power.

What are the costs associated with making such a change, and do solar panels end up being more cost effective than traditional electricity sources? In this article, we’ll answer any questions about the financial viability of switching to solar electricity.

Using Solar To Combat Rising Electricity Rates

We doubt we need to tell you that over the past decade, the cost of heating and cooling a typical Australian home has increased dramatically due to the rising cost of electricity.

The majority of us will feel an increased burden on the household budget due to this.

We saw an average 72% increase in power prices from 2003 levels by 2013; gas prices increased by 54% during the same time.

An investment inside the network and the introduction of a carbon tax in 2013 were major factors in these increases.

After a brief period of relief in 2014, after the carbon pricing was repealed and the average national household power price fell, prices increased by about 10.8 per cent across the country between 2016/17 and 2017/18.

And it seems like this pattern will continue, much to the distress of Australian families.

The Australian Electricity Market Commission has predicted a gloomy average annual increase of 2.5% between 2016/17 to 2107/18 due to the closure of the Hazelwood power facility in Victoria and the Northern station in South Australia.

Solar Energy Is A Green Way To Avoid Rising Retail Energy Prices.

The environmental advantages associated with solar energy may convince you to install solar panels on your roof; solar power prevents between 200 to 300 MtCO2 of yearly global emissions, the same as preventing 75 per cent of Australia’s annual CO2 emissions.

On the other hand, if you install a solar panel system, you can save money by decreasing your monthly electricity consumption.

The cost of solar electricity has decreased substantially over the past five years—by around 58%—that it is now less expensive than retail power in every Australian capital city apart from Capital (which enjoys the lowest retail prices in the country).

Australia has been quick to adopt solar energy, with the Australian Energy Council estimating that 15% of homes in the country already have solar panels installed.

This equates to almost 1.6 million families reaping the financial and environmental benefits of producing solar energy.

Will Convert To Solar Energy Lower My Monthly Electricity Bill?

It is possible to drastically reduce your electricity bill by switching to solar power.

Panels that collect sunlight and convert it into electricity are examples of solar energy systems.

With this, you can use less expensive and more environmentally damaging fossil fuels.

The size of your solar energy system, how much electricity you use, and where you live will all affect how much money you save on your electricity bill.

However, on average, homeowners who make the switch to solar energy save between $100 and $200 per month on their electric bills.

You can expect your savings to be affected by a number of factors, one of the most significant being the size of your solar energy system.

More power is generated by a larger system, which means more money saved on electricity costs.

Depending on your energy needs and other factors, a professional solar energy company can help you choose the optimal system size for your home.

The amount of electricity you consume is another major factor in your financial savings. The greater your annual electricity consumption, the greater your potential savings by making the switch to solar power.

This is because your solar energy system will increase your ability to generate electricity, reducing the amount of power you will need to buy from the utility.

The amount you save also depends on other factors, including your location.

Your solar energy system’s output will increase in states like California and Arizona, where the average annual sunshine hours per square metre are high.

You’ll be able to cut down significantly on your monthly electricity costs as a result of this. You can still reap the rewards of going solar even if you happen to reside in a region with less sunshine.

Saving money on electricity costs isn’t the only financial perk of making the switch to solar power. If you’re installing a solar energy system in your home, for instance, you may be able to take advantage of tax credits and other incentives that will lower the overall cost of the project.

If your solar power system produces more energy than you need, you might be able to sell the extra juice back to the utility company.

Making the switch to solar power is one more way to lessen your impact on the environment. You can help the environment by reducing your reliance on fossil fuels by switching to renewable energy sources like solar power.

Switching to solar energy has many positive effects on your wallet and the environment.

Consult a reliable solar energy company and take into account the size of your system, your electricity consumption, and your location to estimate your potential savings.

In addition to helping the environment, solar energy has many other advantages. There are a few different ways it could help you save money. Following are some suggestions for decreasing your electricity consumption and, consequently, your monthly expenses.

Profiting From Underutilised Power

A solar array’s output may be greater than the energy requirements of a standard house. Feed-in tariffs allow for the storage of these excess kWhs.

It’s not possible to simply store excess electricity in a bank until it’s needed unless a rechargeable system is already in place.

Instead, it is incorporated into the existing system. Practical since it helps you save money on electricity bills every month.

Sometimes, your energy may be sufficient on Monday but insufficient on Tuesday.

You sell the energy units on Monday and buy them again on Tuesday, cancelling the previous day’s transaction.

That is, it stores your energy until you need it.

On the other hand, let’s say Mondays and Tuesdays are your most energetic days of the week. Credits will be applied to your account for both days, lowering the total price you owe for your energy.

State Government Rebates

Australian homeowners installing solar panels are eligible for a discount thanks to small-scale technology certifications.

It won’t be expressly earmarked for electric bills, but having the cash on hand will be useful.

Government rebates can vary widely in magnitude and regularity. Find out what options are available right now by contacting a solar installation business.

Payment Period

The savings from using the system will eventually outweigh its initial investment. At this moment, your business is once again profitable. There is an initial financial investment required for a solar energy installation. Unfortunately, this will put you “underwater” on your computer for a while.

After a few years, you should have finished paying for your system.

After that, any additional solar energy collection (barring maintenance and repairs) will only lead to financial savings.

If you consistently provide your grid with extra energy, you can make money.

Want to switch to solar power but can’t afford to make the investment all at once? If this were, it still wouldn’t be a problem.

Financing options are many, and you can use them to buy and pay for your solar panel system in instalments.

How Does Solar Energy Help You Save Money?

Saving money is as easy as putting in a solar energy system. The question “how much?” is more important. In the following paragraphs, we will detail how we calculated that figure and what factors played a role.

Installing a solar energy system in your Australian home, where the sun shines throughout the year, will drastically reduce your monthly energy costs. Considerations as varied as:

What your usual daily energy consumption looks like.
Methods of application.
Your feed-in tariff rate, if applicable.
Quantity of solar panels to be installed.
The city/town/town/town you currently call home.

Your House’s Average Energy Consumption

Electricity consumption is easily determined using the information provided on the back of the bill. Energy consumption is measured in kilowatt-hours (kWh). This could be the initial step in determining how much money you can save with a solar power system, along with which system is ideal for you.

Solar power systems with an output of 5 kilowatt hours (kW) or even more are typically required to meet the overall energy demands of a large estate or home.

In Australia, a 5 kW solar system typically generates between 18 – 25 kW/h per day of electricity from the sun (based on your region). The number of kW/h, or units that you are using at this very moment, may be found on your most recent bill.

Useful Patterns Of

The excess energy generated by your solar PV system during daytime hours can be fed back into the grid if you have solar banks or some other mechanism to store the energy. Your energy provider will credit you for the power you export.

The clean electricity generated by your solar energy system will always take precedence in your home, even if grid electricity is available. If your home’s electrical needs surpass what can be supplied by its solar panels, it will begin drawing power from the grid.

What Is Your Feed-in Tariff Rate?

When customers agree to send their extra solar-generated power back to the grid, energy providers often offer them a rate of 8 cents per kilowatt-hour.

It’s best to phone your utility and enquire about the current tariff rates being offered, and it’s also wise to compare rates from different providers if you can.

As feed-in tariffs may vary from one state to the next, you should double-check all of your data before attempting to calculate potential cost reductions.

Solar Has Advantages Other Than Lower Electric Bills

Low Expenses for Maintenance
Excellent Financial Gain
Consistently Green Energy
Financed through Incentives
Possessions Appreciate in Value

This Is An Excellent Time To Add Solar Power

In the years between 2012 to 2016, the cost of solar panels dropped by nearly half, making it an excellent time to invest in solar for your home. Moreover, a solar system may now accomplish far more.

The typical size of a starting small solar + inverter bundle has increased from 1.5 kW to between 4 kW and 5 kW, a capacity more prone to affect your electricity cost due to the dramatic drop in system pricing.

Three years & two months is the average period required for a solar system to begin paying for itself, according to a poll conducted by Choice among 700 houses that have installed solar panels. In a way, this only benefits your household’s financial situation.

A greater percentage of the solar that is created can be used in your home, resulting in lower electricity costs, if you install a solar battery.

According to the Climate Council, the average home may improve its use of solar-generated electricity by as much as 60% by installing a 4 kWh battery in conjunction with a 5 kW solar system.

Although the cost of solar batteries is decreasing rapidly, deciding to purchase one now or later depends on your financial situation.

Frequently Asked Questions About Solar

Which is better: electric or solar energy?

Solar power is more cost-effective than “regular” or standard electricity. According to the World Economic Forum (WEF), installing new solar panels is cheaper than a comparable investment in coal, natural gas or other fossil fuel options.

Is solar power the cheapest form of electricity?

Solar was crowned as the cheapest energy source in history in 2021 – closely followed by onshore and offshore wind – after it became more affordable than gas. This is a dramatic improvement compared to the cost of solar energy a decade ago.

Is it worth it to get solar panels?

Yes, getting a solar panel system is worth it for the excellent financial benefits and cost savings. However, solar panels aren’t suitable for everyone. Residents with low energy needs, low electricity rates, or year-round inclement weather may not save money from a solar system.

Why is solar power so cheap?

Better technology and panel design. New manufacturing techniques have been a major driver behind the decline in solar prices. The past 20 years have seen the development of more compact and efficient panel designs that require fewer resources overall.

Will solar panels reduce my bill?

First and foremost, you can use the electricity your panels generate, and so reduce your bills. Savings depend on system size, electricity use, whether you’re at home during the day to use the energy you’re producing and other factors.

Conclusion

As the price of solar panels continues to drop on an annual basis, they become more competitive with more conventional forms of electricity generation.

The rising cost of electricity has significantly raised the price of heating and cooling a typical Australian home over the past decade.

Due to the retirement of the Hazelwood power facility in Victoria and the Northern station in South Australia, the Australian Electricity Market Commission has forecasted an average annual increase of 2.5% between 2016/17 and 2107/18.

Solar energy is a sustainable alternative to fossil fuels that can reduce monthly electricity bills while preventing the release of 200–300 MtCO2 into the atmosphere annually. Fifteen percent of Australian homes now have solar panels, making the country an early adopter of solar power.

If you have solar banks or another form of financing, you can send any excess energy your system generates during the day back into the grid.

There hasn’t been a better time to go solar for your home than now, with prices having dropped by nearly half since 2012. The average time it takes for a solar system to begin recouping its initial investment is now three years and two months, and the typical size of a starting small solar + inverter bundle has increased from 1.5 kW to between 4 kW and 5 kW.

Additionally, solar has many benefits, including low maintenance costs, excellent financial gain, consistent green energy, and price appreciation.

Content Summary

As the price of solar panels drops yearly, more people are choosing to supplement their regular electricity with solar power.
We saw an average 72% increase in power prices from 2003 levels by 2013; gas prices increased by 54% during the same time.
On the other hand, if you install a solar panel system, you can save money by decreasing your monthly electricity consumption.
The cost of solar electricity has decreased substantially over the past five years—by around 58%—that it is now less expensive than retail power in every Australian capital city apart from Capital (which enjoys the lowest retail prices in the country).
Australia has been quick to adopt solar energy, with the Australian Energy Council estimating that 15% of homes in the country already have solar panels installed.
It is possible to drastically reduce your electricity bill by switching to solar power.
Panels that collect sunlight and convert it into electricity are examples of solar energy systems.
The size of your solar energy system, how much electricity you use, and where you live will all affect how much money you save on your electricity bill.
You can expect your savings to be affected by a number of factors, one of the most significant being the size of your solar energy system.
More power is generated by a larger system, which means more money saved on electricity costs.
The amount of electricity you consume is another major factor in your financial savings.
The greater your annual electricity consumption, the greater your potential savings by making the switch to solar power.
You’ll be able to cut down significantly on your monthly electricity costs as a result of this.
Saving money on electricity costs isn’t the only financial perk of making the switch to solar power.
If you’re installing a solar energy system in your home, for instance, you may be able to take advantage of tax credits and other incentives that will lower the overall cost of the project.
Making the switch to solar power is one more way to lessen your impact on the environment.
You can help the environment by reducing your reliance on fossil fuels by switching to renewable energy sources like solar power.
Switching to solar energy has many positive effects on your wallet and the environment.
Consult a reliable solar energy company and take into account the size of your system, your electricity consumption, and your location to estimate your potential savings.
In addition to helping the environment, solar energy has many other advantages.
There are a few different ways it could help you save money.
Practical since it helps you save money on electricity bills every month.
There is an initial financial investment required for a solar energy installation.
Financing options are many, and you can use them to buy and pay for your solar panel system in instalments.
Saving money is as easy as putting in a solar energy system.
Installing a solar energy system in your Australian home, where the sun shines throughout the year, will drastically reduce your monthly energy costs.
This could be the initial step in determining how much money you can save with a solar power system, along with which system is ideal for you.
The clean electricity generated by your solar energy system will always take precedence in your home, even if grid electricity is available.
It’s best to phone your utility and enquire about the current tariff rates being offered, and it’s also wise to compare rates from different providers if you can.
In the years between 2012 to 2016, the cost of solar panels dropped by nearly half, making it an excellent time to invest in solar for your home.
Three years & two months is the average period required for a solar system to begin paying for itself, according to a poll conducted by Choice among 700 houses that have installed solar panels.
A greater percentage of the solar that is created can be used in your home, resulting in lower electricity costs, if you install a solar battery.
Although the cost of solar batteries is decreasing rapidly, deciding to purchase one now or later depends on your financial situation.