It’s no secret that you can save money with solar panels. In fact, per our calculations, a 6 kW solar panel system will save the average Australian household roughly $1200 per year. The question is: How do solar panels save money, actually?
Well, for one, solar installation lowers (if not eliminates) your energy bills. So, instead of paying your hard-earned money to power companies, you get to keep it. There are many other ways, too. I listed and explained a handful of them below, so keep on reading!
How installing solar panels now saves you money in the future
1. Rebates are at their highest right now.
Solar panel rebates – otherwise known as Small-scale Technology Certificates (STCs) – are incentives from the Australian government to encourage people to invest in a renewable solar energy system. That, of course, includes solar panels.
Furthermore, the number of STCs you’re eligible for also depends on a few things. One of them is the deeming period – or how many years there are between 2030 and the year you had your solar system installed. The higher the deeming period, the more STCs you can get.
Other things determine how many STCs you can get, such as the size of your system and the location of your property, but the deeming period is what dwindles the value of rebates year after year.
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2. Solar panels are currently at their cheapest.
In the past decade, the cost of solar panels has significantly reduced with the price dropping over 550% in Australia. Imagine from $7,170 per kilowatt (kW) in 2010 to just under $1300 in 2021.
As of this year (2023), that solar panel cost has dropped further down to just $1000 per kW making it the cheapest it’s ever been.
3. Energy costs aren’t going down.
The trend for basic necessity prices is projected to continue going upward in 2023, among them is the energy consumption costs. Energy prices are projected to increase by 23.7% in 2023.
That means that an annual energy bill of $1400 could increase to around $1700.
If you install a solar system now, however, it’s going to protect you from the inevitable price hike of grid electricity.
4. Modern solar panels are the most efficient and durable they’ve ever been.
Modern solar panels have become so much more efficient and long-lasting compared to their predecessors.
The best and most commonly used type of solar panel, monocrystalline, has an efficiency rating of about 17-20% and can last 25+ years.
For example, SunPower’s Maxeon 6 has an efficiency of 22.5% and is rated to last 40 years.
Just a decade or so ago, the solar industry was notorious for flimsy solar systems that didn’t produce enough clean energy yet to make them worth it.
5. You can add your energy savings to your retirement fund.
You can put the savings you get from lower power bills toward your retirement fund.
Now, how much money you save with solar energy depends on a lot of things. We have sample savings profiles on another blog but let’s assume your house has a 6 kW system and annually uses 5500 kWh. That’s going to save you upwards of $1200 per year.
And since modern systems can get you 25 good years of solar energy, that means you save money at least $30,000 throughout its life. Putting at least some of that towards your superannuation fund and letting it appreciate is going to make retirement more comfortable.
6. Solar panels increase the value of your home.
Before anything else, this will only save you more money in the future if you plan to sell your house. That being said, a study from NREL found out that homes with solar panels sold 20% faster and are worth 17% more money than those without.
It’s understandable, too. I mean, if you were in the market for a new property, wouldn’t it be so much more enticing if the house could power itself?
So, if you do plan on living elsewhere in the future, giving your current home a source of renewable energy can help make that process easier.
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Are Solar Panels Worth It?
Yes, solar panels are worth it. Although the upfront costs of installing solar panels are costly, modern solar panels pay for themselves after 3-6 years. Given the standard lifespan of 25 years, you can expect to get 19-22 years of free electricity.
For further reading: A more comprehensive discussion on why solar panels are worth it.
Why Are My Solar Panels Not Saving Me Money?
The most likely reason is that you’re using more electricity after installing solar panels. Your installer will recommend a system size that will produce power for your current energy needs. If you plan on using more energy after installation, consider oversizing.
How Long Does It Take To Get Your Money’s Worth On Solar Panels?
On average, it takes 3-6 years for homeowners to get their money’s worth on solar power. Although, 6-10 years is still considered a good range, especially since most modern modules last 25 years.
While the upfront costs of solar panel installation may seem daunting, the potential savings over time make it a smart investment. Furthermore, having it installed now is the most practical choice.
For one, energy prices are (and will) continue to go higher while the price of producing solar energy is at its lowest. The value of solar rebates is also going to climb down because of the declining deeming period, further driving down the point of installing solar power ASAP.
So, when you’re ready to decide to switch to solar power, we can help. We can get you 3 FREE quotes from our network of pre-vetted installers.