How Much Money Do You Save with Solar Panels in Australia?

With the steep rise in electricity prices, renewable energy – particularly solar energy – has become more attractive. But, really, how much money do you save with solar panels in Australia?

Well, how much money you save depends on many things, so there’s no one-size-fits-all value here. But, for context, the average household that’s running a 6.6 kW solar system can save about $32,300 over the course of it’s life, or upwards of $1,292 per year (87% of the annual average of electric bills).

With that said, let me walk you through the following:

• Factors that can affect how much money you save with solar panels
• Sample savings scenarios

Factors that affect how much money you can save with solar panels:

1. The size of your solar power system

Generally speaking, a larger solar system will shave off more from your electricity bills because, well… more panels also generate more solar energy. And the more renewable energy you’re producing, the less you will have to rely on the grid.

If you want to have your power bills as close to zero throughout the lifespan of your solar panels, I highly recommend oversizing and battery storage (more on this later).

2. The upfront cost of installing solar panels

Another thing you have to factor in is the upfront solar installation costs. This will vary with different solar installers, brands, types of solar modules, and the size of the solar system you want installed.

While there’s no one value for installing solar panels, a 6.6 kW solar system (the most popularly used in Australia) costs roughly $6500.

Installing more solar panels cost more money. But, again, they generate more solar energy which leads to more savings in the long run.

On that note, we have a network of pre-vetted installers. We can get you 3 FREE quotes from them right away. We trust them with our own systems so we’re sure about their skill and honesty.

3. Your electricity consumption

Needless to say, more energy consumption also leads to a larger energy bills.

On average, though, the AER shows that Australian households use about 5500 kWh per year. If the cost of 1 kWh was at 27 cents, this would equate to an annual power bill of $1,485.

Now, let’s say you had a 6.6 kW solar system producing 400 kWh of energy per month and you were able to use all of this energy. You’d be able to save a little over 87% of your monthly energy costs.

4. Where you live and the orientation of your solar panels

Where you live also plays a role in how much you shave off your power bill because the cost of electricity as well as how much sun you’re getting also changes.

Here are the average annual residential bills for the different parts of Australia in 2021 (per the AEMC):

To maximize the energy production, you also have to face and angle your solar panels in a way that matches your energy consumption patterns. Doing so ensures that you get the most of your solar system and therefore reduce your power bills as much as possible.

Pro tip: I recommend talking with your solar installers about this but, while you’re at it, you might as well read up on where your solar panels should be facing.

5. Whether or not you have a solar battery

Speaking of matching your patterns, using a solar battery makes sure that you can use all of the solar energy that your solar system produces. This, in turn, can save you money.

However, most solar systems don’t come with solar batteries. So, adding this will likely increase your upfront cost.

While pricey, adding a solar battery storage is a practical choice particularly because the solar feed-in tariff rate has gone down year after year.

6. Feed-in tariffs

Feed-in tariffs (TiF) are when the government pays you for channeling your excess power back to the grid. Sequentially, this power will be used to provide energy to everyone else.

This, along with solar system rebates for qualified people, are the government’s way of enticing people to produce their own renewable energy. We’re all for it except that TiFs have been dropping – and, really, they’re just not worth it anymore.

Now, the best way to save money with your solar panels is to make sure that you use as much of your self-produced energy as possible.

Sample savings profiles if you use solar panels:

The projected savings below assume the following conditions:

• The cost of grid electricity is at 27 cents per kWh.
• Households have an average electricity usage of 5500 kWh annually and 458.33 kWh per month.
• Households have an average monthly electric bill of 123.75 per month (27 cents x 458.33 kWh) or 1,485 per year.
• 1 kW solar systems produce 62.5 kWh of energy per month or 750 kWh per year.
• Batteries are used and all of the generated solar power is consumed.
• Feed-in tariffs are disregarded. Adding them to the equation can make the values below better but only by a little.
• Varying weather conditions are disregarded.

Take note that these numbers are conservative. If your solar installers set up your solar panels in a way that maximizes energy production, you would be producing more energy and therefore save more money.

Weather conditions and the cost of grid electricity could also fluctuate and affect the amount of money you save.

FAQs:

Conclusion: How much solar savings should you expect in Australia?

How much you can save will depend on a good number of factors, including the size of your solar system, where you live, your energy consumption, feed-in tariffs, how much you paid for installation, and a few others more.

But, generally speaking, the average household with the most widely used solar panel system should expect to save upwards of $1200 per year. In this scenario, the solar panels you had installed would have already paid for themselves in less than 5 years.

With that said, I recommend oversizing your solar panel system. While the upfront cost also hikes upwards, you also won’t have to pay your electricity bills for the next 25 years.