Are Solar Panels Worth it in 2022?
“Is solar power worth it?”. That’s a question that we get constantly asked by many of our clients and friends.
Undoubtedly, solar energy is one of the most efficient and eco-friendly methods to obtain power for our homes. And that is why thousands of people decide to go solar and install solar panels in their homes and businesses. But is it worth it?
If you are thinking about investing in solar power, then keep reading. At Tenmen, we want to explain to you if it is worth making an installation of this type and what to expect.
Is solar power worth it in Australia?
At this point, I am confident that Solar power in Australia is here to stay. Over 2 million Australian homes already have Solar Panels installed on their roofs, which keeps growing yearly. In the first three quarters of 2019 were already 4,829 solar panel installations. If we compare it with the 537 installations of 2015, we can see that it is a substantial increase.
Analysts and investment houses worldwide predict that solar energy is the future.
Besides, the Australian Government is now offering homeowners the possibility of claiming financial incentives. These financial incentives, STC, make this process even more affordable for all households.
Furthermore, Solar system prices for homes have decreased significantly in recent years. As the Solar market grew and Solar installation increased in scale, the cost of production was significantly reduced.
As a result, getting a Solar System installed in Australia in 2020 will be 50% cheaper than in 2012.
Source: Solar panel costs based on live database | May 2020 by Solar Choice.
Why should I invest in Solar Power?
Electricity rates continue to rise, and consequently, your electricity bill. I know many people considering investing in solar power, hoping to produce their energy and break free from electricity companies.
All these Australians decided in 2020 because the cost of getting a suitable solar system is now really affordable. You can certainly get a return on investment in 3 to 5 years.
That is to say, once a system has paid for its initial installation costs, the electricity it produces for the rest of its lifespan is free! How good is that?
What is the cost of installing a Solar System in QLD?
A Solar System is like your eye’s fingerprint or iris: no two are the same.
Likewise, every solar power system is created according to each home or business’s unique needs and circumstances.
For this reason, it is difficult to find a price that is the right one without first having your situation evaluated by an expert.
But we can show you an approximate cost for each size to get an idea of the average cost in Queensland. The total price does not contain the upfront financial incentive (STC) the government provided.
How much can I save with Solar Power?
As many of you already know, solar energy can save you money. But the actual question is, how much? I base this figure on several factors, such as:
The energy you consume per year
First, you need to look at your electricity bill to determine how much you can save with Solar and which system is right for your home. For example, an Australian family can consume 9,000 kWh per year. If you multiply that number by the QLD average electricity rate ($0.23545 per kWh), you’ll find that the typical Australian family spends over $2,000 a year on electricity alone. (9,000 kWh x $0.23545 = $2119.05).
The size of the Solar Power System
Second, you need to know which system is the most suitable for your home. And which size will cover all your electrical needs? Generally, a 6kW system generates around 9,636kWh of Solar energy per year. So this would be enough to offset an average household’s energy usage.
The price of the Solar Power System you install
As I mentioned before, every home is different. Consequently, everyone will need another solar solution. The best way to get the right system is to get a solar expert to look at your specific situation and give you a quote. But, to keep up with the previous example, the price of a 6kWh solar System, including the upfront financial incentive (STC), will be around $5,430. So, if an average Australian family spends around $2,000 per year and the Solar Power System costs $5,430, they will cover the investment in less than three years, and after that, they won’t have to pay for electricity again.
The rate of your feed-in tariff
Last, the rate of your feed-in tariff. You can sell the extra energy you produce to the Queensland electricity network. Queensland Government’s Solar Bonus Scheme pays a feed-in tariff for the excess electricity generated from Solar Power Systems. Each company has different Solar Feed-in tariff rates and conditions. However, the average rate in Queensland is 7.8 per kWh. If you need help finding the best company to sell the extra energy that you produce, you can contact us, and we will be happy to help you with any questions.
To sum up, as I mentioned before, what you can save with Solar Power can vary as it depends on many factors. But, once you have covered the investment cost and, if you don’t spend more than you produce, you won’t have to pay a single cent for your electricity.
Payback Period for Solar Panels in Australia
The Payback Period is simply how long it takes for savings on electricity bills to equal the value of getting a solar energy system installed.
When talking about payback periods, a frequently asked question is, “how long does it take to recover the initial investment”. In other words, how long will it take for you to save on your electricity bill?
Well, I have to say that it depends on many factors, one of which is the geographic location where you live. So if you look at the graph below, you will see that the bigger the system you install is, the shorter the payback period, even though the initial investment is higher. So it seems unreal, right?
But…it is not. And that it’s the reason why many people are now going solar. As you can see below, Queensland has a lower payback period time, making it even better for Queenslanders to get their solar system.
Why should I get Solar Panels?
There are many reasons why installing solar panels in your home or business is an excellent idea. Let me show you a few of them:
Drastically reduce electricity bills.
If you are a homeowner or a business owner, electricity costs can represent an enormous part of your monthly expenses. However, with Solar, even if you don’t produce 100% of the energy you consume, solar energy will cut your utility bills and save you a lot of money.
Get a great return on your investment.
As I see it, Solar panels are not an expense: they are one of the best ways to invest, with returns that rival those of more traditional investments.
For example, a solar energy system is a financial product capable of generating annual returns ranging from 10% to over 30%.
Low Payback period
In addition, a solar panel payback period is the amount of time it will take you to get back the money you spend on a solar power system, usually in the form of avoided electricity costs.
For example, if your solar panel payback period is four years, after that period, you can easily calculate your actual monetary return on solar panel investment simply by looking at your electricity usage and local electricity rates.
You can sell energy back to the grid.
It is worth mentioning that there are other alternatives to increase profits and recover the costs of the initial investment. For example, you can choose to sell the extra electricity that you don’t use back to the grid.
Protection against rising energy costs.
Above all, one of the clearest benefits of solar panels is the ability to cover the prices of public services. By investing in a solar energy system now, you can set your electricity rate and protect yourself against unpredictable increases in electricity costs.
It’s an environmentally friendly investment.
Unlike fossil fuels, the sun’s rays provide a reliable and respectful energy source.
Having solar panels installed allows you to enjoy sustainable energy, which will not cause the depletion of our planet’s natural resources. In addition, solar energy does not produce CO2 and therefore does not damage the ozone layer.
Make off-grid living possible.
People looking to live in remote homes don’t have to pay enormous fees for installing electrical utility poles and cabling anymore.
For instance, a solar power system is potentially more cost-effective and will provide power for decades if properly maintained.
Install solar panels at home
So far, we have covered some of the most asked questions about whether installing a solar power system at home is worth it or not. Next, we will discuss other questions that might concern homeowners looking to install solar panels on their roofs.
What type of Solar Panels are best for my home?
First, you should know that there is no difference between solar panels for homes and those used in large solar power installations. They use the same types of photovoltaic plates.
Although there are indeed models of solar panels designed for homes, and that is basically for an aesthetic theme (nobody likes that our house looks “ugly”).
The type of solar panels you will need in your home depends on many factors. The best thing to do is to consult with an expert in solar energy.
How many Solar Panels do I need?
It is essential to clarify that the number of panels you will need will depend on the use you give to your devices, which directly impacts energy consumption.
But, an average home in Australia has a sufficient roof area for the specified number of solar panels to produce enough solar electricity to supply all of its power needs.
In addition, excess electricity generated goes into the primary power grid, paying off electricity use at night. In a well-balanced grid-connected configuration, a solar array generates power during the day that is then used in the home at night.
How do Solar Systems work?
- First, the sun’s rays heat the solar panels. These convert that energy into direct current that is collected in the inverter.
- After that, the principal function of the inverter is to convert the direct current power to alternating current, which is how electricity is usually consumed.
- It then distributes this electricity among the different electronic devices in your house. If your solar panels do not meet the needs of these devices, you will receive energy from the conventional electrical system.
- Last, if your solar panels produce more energy than necessary, it sends this excess to the electrical system, where you can sell it to the electricity providers.
How long does it take to install a Solar Power System?
Generally, the time it will take for a typical home installation ranges from 2 to 4 days.
This time could depend more or less on the number of panels installed or the degree of complexity for their installation, whether it is to manufacture unique structures, special bases, etc.
So, Is Solar Power worth it in 2022?
The answer is definitely yes. Solar energy is one of the best investment options you could make for your home in 2020. But, If you are still in doubt, reread this article because all the benefits of solar cannot go unnoticed.
And I’m not just talking about the obvious economic benefits but also the fact that solar energy is one of the cleanest energy sources on the planet.
It also gives me a feeling of freedom, knowing I can control my electricity bills without relying on power companies.
However, ensure you install the right solar system for your home, as getting the wrong one can cost you a lot of money.