How Much Do You Save with Solar Panels?

By Lauren Leisk, Yahoo7 Moneyhound Updated July 9, 2013, 8:00 am

Changes in state government kickbacks towards solar power have reignited the green energy debate.

Governments forcing power companies to buy green energy back from households with solar panels has seen solar installation prices drop by about 80 per cent in the past 18 months. But at the same time, solar power puts pressure on electricity infrastructure causing upward pressure on electricity prices.

With Australian households now paying among the highest electricity prices in the developed world, installing some solar panels can deliver investment returns.

Initial cost

Solar panels can be an expensive outlay, and the Clean Energy Council estimates panels to cost between $2500 - $6500 for a 1.5kW system and up to $6000-$9500 for a 4kW system. With the average Australian household using around 17kWh per day, a 3kW system could displace around 25-40 per cent of your power cost.

Related: How to switch power suppliers easily and save on electricity bills

Offsetting the entire cost

While many solar panel companies claim the ability to offset entire energy bills, most solar systems will only cover part of the electricity costs. A 1kW solar panel system produces an average of 4-5kWh per day. A 3.2kW solar power system could produce around 14kW hours per day, but it would require around 30sqm of space. In some instances, the most savvy energy users report offsetting entire household power bills.

As an investment

Today’s cells often come with 20-year guarantees, and each portion of power generated is a cost you won’t have to pay at the grid. If a 2kW system costs around $5000 to install and cuts 30 per cent from your power bill, you would be saving around $150 each quarter on a $500 bill. It would take you around 8 years (34 quarters) to pay off this installation.

Each household has different energy usage levels. Even if you only solar panels for your hot water and pool heating needs this is a significant amount of energy saved, and ultimately a reduction in carbon emissions from burning fossil fuels. So you can think of it as in investment in the future of cleaner environment.

In investment terms, you can see gains of around 8 per cent. The returns will be different from state to state and often improve according to government commitments to rebates.

Related: 50 Ways to reduce your power bills. Yes, fifty.

For green energy

Solar power is an environmentally friendly way for many households to take the first step towards a greener lifestyle. However, it may not be an option for apartments or dwellings affected geographically or shadowed by taller buildings. If solar panels aren’t appropriate for your home but you would like a cleaner source of energy, you can choose an electricity plan with between 10%-100% green component which means you are supporting investment into green energy production like wind and solar.

By comparing what you currently pay for your electricity with other suppliers who service your area, and other plans that promote GreenPower, you can decide to make the switch. Moneyhound offers such a comparison service for free, and if you decide to switch can take your application online. Once submitted our service partner will organise the switch for you at no cost and liaise with you in the case of any other administration.

To start this process place your postcode in the widget below or go to our energy switch page.

With energy prices set to rise, those in the position to buy into the solar power movement could see themselves soaring ahead with smaller energy bills.

Was this article useful? Use the feedback button below or comment to share your thoughts on our facebook page.

Moneyhound Product Picks this Month:



Get the latest deals that could save you money on your monthly bills

Help me find a savings account

  • Account type

  • State/Territory

  • Anytime access accounts

  • Fixed-term deposit accounts

Help me Save

Use our savings account interest calculator

      • Interest rate (APR*) used : 5.2%

      *APR and APR term suggestions are based on market competitive products listed on this page. Fees and charges are payable. Read the disclaimer

      Moneyhound helps you compare 406 saving accounts from 81 trusted issuers

      Savings Accounts Latest News

      Compare more products and services

      Disclaimer: Yahoo7 has partnered with RateCity and WhistleOut for the provision of pricing information for financial, telecoms products. Yahoo7 has partnered with Lifebroker to provide information regarding life risk products and with RateCity to provide information on general insurance products. Yahoo7 has no direct affiliation with any finance, telecom or energy institutions listed here to promote this content. The content of this website has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should not acquire any financial products before taking into account whether your selected products are appropriate to your personal circumstances, having regard to your own objectives, financial situation and needs. Whilst reasonable efforts are maintained to provide accurate, true and correct information, it is advised that you confirm the terms of any product or contract and consult the product disclosure statement before making a decision to apply to any product issuer.

      Whilst Yahoo7 Moneyhound attempts to provide information regarding as many products in the market as is possible, not all available products are compared on this site.The comparison rates for home loans are based on secured credit of $150,000 and a term of 25 years. The comparison rates for car and personal loans are based on credit of $10,000 and a term of 3 years. WARNING: The comparison rate applies only to the example given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan. Read more on our disclaimers here.

      Yahoo7 Money Hound Pty Ltd | ACN: 151 232 450 | ABN: 20 151 232 450
      AFSL: 407341 | ACL: 407723 | COSL: M0011954
      Financial Services Guide