Today, it’s a well-known fact that investing in solar panels will help you save money, especially in the long run. What’s relatively less known, however, is how solar self-consumption keeps even more of your hard-earned cash away from the greedy power companies.
That, and more, is what I’m here to talk about. This article focuses on all the questions you likely have on your mind about solar self-consumption, including what it is, how it works, and everything in between.
Listed below are the topics I’m covering. I recommend reading from the top, but you can skip through sections by tapping on the bullets, too.
- What is solar self-consumption, and why does it save you money?
- How does it work?
- Self-consumption rate
- Solar batteries: yes? no?
- Ways to maximize self-consumption
What is solar self-consumption? And why does it save you money?
Self-consumption is when you use the electricity produced by your solar panels. Ideally, this means none of the green energy produced is sent to the grid because you’re using it all.
Now you might be wondering why that’s ideal, and the catch-all answer to that would be that you’ll be less reliant on power companies.
Don’t get me wrong. Sending the solar energy produced by your system to the grid will get you credits (i.e., feed-in tariffs) that further reduce your power bill. That’s definitely a good thing. The caveat is that the value of these feed-in tariffs is far lower than the value of buying electricity from power companies.
In New South Wales, for example, AGL has a maximum rate of 15 c/kWh for their feed-in tariffs. That’s the best rate in the area, by the way. Oh, but the cost of electricity? 30 c/kWh, on average.
On that note, solar self-consumption also shields you from the rising cost of electricity. As long as you’ve paid off your solar system, the solar energy you generate is free, and it will continue to be free for the entire life of your system. The cost of electricity, though, is constantly rising.
For further reading: Net metering and how solar energy earns you money
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Okay, so how does it work?
So, unless you have a battery system alongside your solar panels, the energy you generate isn’t going anywhere. That means you will have to use this energy as it becomes available, or else it will get sent to the grid.
The optimal way self-consumption should work is to synchronize when your solar panels generate power and when you use your appliances, especially the ones that use a lot of electricity.
East-facing solar panels, for example, produce most of their electricity during the day. This setup makes it perfect for homes and families that use more electricity in the morning while preparing for work, school, or whatever else.
This brings us to our next topic of discussion: your self-consumption rate.
Self-consumption rate? What’s that?
The self-consumption rate is a key figure in the solar energy puzzle. It tells you the percentage of the solar energy from your panels that you actually use.
A higher rate means you’re using more of what you produce, which, of course, also means you’re using your solar system more effectively. I mean, after all, it also means you’re relying less on the grid, leading to lower electricity bills.
That being said, calculating your self-consumption rate is done by dividing the amount of solar energy you consume by the total energy your panels produce. For instance, if your panels generate 10 kWh of electricity per day and you use 7 kWh, your self-consumption rate is 70%.
This is good information because it directly influences your savings. The higher your rate, the more money you save on electricity bills.
For further reading: How to read a smart meter
Awesome, but what rating is considered “good”?
Good question, and it really depends on your setup and lifestyle. Generally, though, hitting a rate of 70% or more is fantastic. That means you’re making good use of your solar energy. A rate between 50% and 70% is pretty solid, too, but you could probably do better.
Getting less than 50%? It might be time to look into how you can use more of your solar power when it’s being generated. This could mean running appliances during the day. Homes with modern, smart appliances can automate this, so it’s definitely doable.
On the other hand, you could also consider investing in a battery to store your excess energy. Let’s talk about it.
Solar Batteries: Yes? No?
Deciding whether to add a solar battery to your system boils down to your personal energy needs and the specifics of your solar setup. Batteries can be a game changer for many, but they’re not the right fit for everyone.
Who benefits from adding a solar battery?
If you find that your solar panels produce more electricity than you can use during daylight hours, a battery lets you store that excess power. This means you can use your solar energy at night, significantly increasing your self-consumption rate and cutting down on your electricity bills.
That being said, households with high energy usage in the evenings and a lot of excess solar energy stand to gain the most from installing a battery.
Who might not benefit as much?
The cost of the battery might not justify the savings if your electricity consumption habits are relatively stable throughout the day or if you think the tariffs are enough to offset your bills.
In other words, if you’re already managing a high self-consumption rate without a battery, the additional investment might not be practical.
You see, batteries are a bit pricey, especially if you add them to a pre-existing system. And, depending on how much excess energy you have, the long-term savings might not justify the investment. When you speak with a qualified solar installer, do ask if they can show you an estimate of your savings so you can make a more educated decision.
5 Ways to maximize self-consumption
Boosting your solar self-consumption can significantly lower your electricity bills and increase your renewable energy use. Here’s how you can optimize your use of solar power, combining practical tips with smart technology:
1. Use your solar system’s app(s).
Modern solar panels will come with apps where you can track exactly how much energy you’re producing as well as your consumption patterns. From there, you can calculate your solar self-consumption ratio and adjust it as you see fit.
2. Adapt to your provider’s feed-in tariffs.
Some electricity providers set their rates based on the time of day, otherwise known as peak and off-peak rates.
You’ll want to make more use of your solar production when grid prices peak, so you don’t end up spending more money than you should. This, in turn, should increase your self-consumption.
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3. If possible, automate your appliances.
As previously mentioned, smart home systems can run your washing machine, dishwasher, air conditioner, and other appliances during peak solar production hours. You won’t even have to be home for this. You just go home to a comfortable temperature, clean dishes, and clean clothes.
This not only helps cut down on excess solar electricity but also achieves maximum efficiency from your PV system.
4. Transition to all-electric appliances
First of all, I get it. Changing appliances can be expensive. Heck, it took me way too long to switch to my electric water heater because I was holding on to my precious dollars.
Doing so, however, forces you to use more energy, which could inherently increase your solar self-consumption if you time it right. Or, you know, follow tip #3.
5. Consider solar batteries.
We can go on and on about the other ways to maximize your solar self-consumption. But, really, the best way to maximize your solar energy consumption is to store the excess energy for later use.
I know, I know. I told you all about how not everyone can benefit from investing in a solar battery, and that’s definitely true. But if it suits your situation, it’s at least worth considering.
Conclusion
Let’s recap. Solar self-consumption is using your solar energy. The more of it you use, the less you rely on the grid. And the less you rely on the grid, the more money you get to save from lower power bills.
If you have plenty of extra energy, though, you might want to think about getting a battery for your solar system. If it’s not in the cards for you, don’t worry, as there are a lot of other things you can do to increase your solar self-consumption ratio.
I hope that cleared things up for you. But if you still have concerns, you can always ask a professional. We have a network of pre-vetted solar installers that are ready to help at a moment’s notice. Just let us know, and we’ll send 3 FREE quotes from them your way.
