Ask RiotACT: Solar panel advice sought

There are plenty of opinions both for and against putting solar panels on your house.
The most important thing to consider in my opinion is the way the power is sold back to the grid and the time it takes to pay back the cost of installing.
Now the first point which is the biggest consideration, is how the system operates. As has been mentioned on many forums, if you sell your total output from the solar system back to the energy supplier at “x” cents per kilowatt [Feed in tariff scheme], then the solar is only reducing your electricity bill by that “x” cents multiplied by how much power your install produces. Those tariffs are fixed and not indexed, so the money it makes you is fixed for the operational life of the panels. Also, if electricity prices rise in the next five or ten years, your payback time will extend beyond what is calculated now. Most retailers have stopped providing this gross tariff, as they had very generous rates of up to 50c/kWh, a goldmine for those who took them up.
Now retailers have a net feed in tariff system which will indeed take longer to pay the system off.
An example, is that a 3kw system which puts out an average of 11kWh per day costs $5000 to install. Annually, at a tariff rate of 6c/kWh, it will export $240.90 worth of power to the grid. So without connecting a system to a house, it will take over 20 years to pay itself off. Now according to my understanding of the net metering arrangements, if you use most of your household power during the day, you will get that power from your panels for free, whilst exporting any excess at the tariff rate. But if you don’t use your power during the day but instead come home at night and turn everything on, you will be paying the same rate for that power as you neighbor without solar does [up to 25c/kWh], because your panels will not be supplying any. It isn’t as simple as deducting your consumption from the amount you exported on a 1 to 1 basis, that’d be too easy and save you much more. Instead, the retailers install meters that record the time and amount of usage/production, to maximise their profits from your system. That is why it is now very complex to work out if they are worthwhile or not. Obviously if you are using most of your energy during the day, when the panels are making all their power, you will save considerably as you aren’t buying it for 25c/kWh but getting it for free. But if you are using grid power at night when the panels are idle, you will only be reducing your bill by the amount you produced for that day, say 11kWh at 6c/kWh = 66 cents. That is by no means a profitable exchange.
Now if you used 5kwh during the daytime when the panel was operating, you only exported 6kWh at 6c = 36 cents profit, but your 5kWh used was free instead of being charged at 25c/kWh, meaning you saved [5kWh x 25c] $1.25. Over a year this equates to $456, plus the 36c per day, an extra $131.40. So now your payback time has reduced to 8.5 years.
Keep in mind though you are still getting a power bill for what you use at night, the amount dependent on what rate you are paying at night and how much was exported to the grid that day.

So solar is a good investment if you have high power usage during daylight hours. But if you come home at six and most of your energy usage is in this non-generating period, it will substantially reduce your savings and the time it takes to pay off the system.
This is why some people have said their bills have dropped very little by installing solar, because of the nature of the net tariff metering systems. Long ago when government was trying to encourage solar, they made it much more attractive. But realising they couldn’t make money on it, the plans changed and now they use us as a solar generating network, providing them with cheap power without having to bear the cost of installation and maintenance.

I hope I haven’t totally confused you, but in researching the subject just now, it has opened my eyes to the truth, as I had previously completely misunderstood the solar scheme and how it works. Now that I know how much of a rort it is, I will definitely be trying to go off-grid with batteries if I ever get it installed.

Here’s my 2 cents worth.

1. Get lots of quotes (4-5). When we got solar panels (Nov 2015), the quotes ranged from $8,000 – $15,000 simply depending on the company. Avoid choosing a large company that pays a salesman to come out and prepare a quote, then takes a cut of the sale and subcontracts the actual installation to an electrician. This is where the additional thousands went. See if you can find a small company/electrician that can quote, order and install themselves.

2. Pay the extra for the more expensive solar panels. I vaguely remember being informed that there were 2 types of panels, one being superior to the other. We weighed up the information and went with the more expensive LG panels due to increased performance.

3. Organise the solar panels yourself once the house is built, but put ACTEWAGL on notice that you’re getting them. I had a huge delay getting my panels certified by ACTEWAGL then having the solar credits put on my power bill. Unless things have improved over the past year, prepare for a not so smooth process. We have a 2-storey house and didn’t need scaffolding during installation.

4. My house is a fully electric ‘smart’ house. We have a large server running 24/7, no solar hot water (Sanden heat pump on the hot water system), no gas line (induction cooking), electric roller blinds, underfloor heating in the bathrooms, CCTV, ducted aircon (run over summer at 22 degrees), spa/Jacuzzi heated to 38 degrees plus all your other standard electrical items in a home. Our power bill over summer was $140 including the supply charge which was way better than we expected 🙂