How Much Can I Save With Solar?
People choose to go solar for several reasons:
- Personal (some people realize they can produce and store their power and just don’t want to be part of the system).
The days of high feed in tariffs are well and truly behind us, so does it still make financial sense to go solar. Therefore today I am going to look at
The financial benefits of going solar
It’s great to be able to help the environment but how is it going to help you financially?
For those of you who like to look at the figures, here we go!
1. How much will it cost me to go solar?
A 5.2kW system will produce an average of around 22kwh of power per day. Over a quarter that is 91 days x 22kWh = 2002kWh of energy.
The current cost of energy with AGL is 28c per kWh inc gst,
Therefore 2002kWh x 28c =$560 total possible savings per quarter, However in reality no one uses all the power created, but if you use a conservative 60% daytime usage of the power your quarterly savings would be as below
2002 kWh x 60% usage = 1201 kWh at a saving of 28c = $336.28
+ excess energy fed into grid at 8c( Agl price)
8001 x .08c = $ 64.08
Quarterly savings = $400.36
Weekly savings are $400 a quarter /13 weeks = $30.79 per week
cost of no deposit finance 5.2kw system = from $25.12 per week.
It is therefore cheaper paying the finance costs to buy your own solar power system, than it is to pay your electricity bill and in 5 years you own it outright and benefit from free electricity for the next 20 years. Even if you were only using half the power the solar system produces you are still about neutral until paid off and then your savings are ongoing.
Therefore the answer to how much will it cost to go solar can often be no more than you are currently paying your electricity provider.
2. How long will it take me to repay the initial investment (ROI)?
Lets continue with the above example a 5.2 kw system using 60 percent of the energy during the day (many people use more than 60 percent) and feeding the rest back to the grid with AGL.
Quarterly savings are $400 therefore annual savings are $1600 cost of the system $5290 (cash price) divided by savings $1600 = 3 years and 4 months to recoup your money. That is nearly a 30 percent return on your investment. Where else can you get a return like that and then go on to benefit for the next 20 years?
The more that electricity prices go up, the more you save and the quicker the payback.
3. How much will I save over the life of the system?
Assuming your savings are $1600 per year the savings will increase as electricity prices rise therefore it is difficult to assess accurately over 25 years, but I would expect they going to be well over $40,000.
4. I am paying 28c per kwh with Agl at the moment how much will it cost me per kwh with solar?
The average 5.2kW system will produce around 8000 kwh of electricity per year.
That’s around 80,000kwh over 10 years.
Amount paid divided by kWh produced = cost per kWh
5290 / 80,000 = 6.6cents kWh
Therefore pay 28c per kWh now without solar or pay less than 7c per kWh with solar. (That’s only a quarter of what you pay by staying on the grid) and that’s over ten years it’s much lower if you use the 25 year figures.
With the generous incentives for Solar Power still available and solar is now cheaper than ever, it just makes total sense to go solar. The high feed in tariffs are gone, but with the low cost there has never been a better time to go solar. It is a great situation where you can personally save money whilst also playing your part in helping the environment. A rare win win situation for all.
I hope you have enjoyed this blog!
If you want to see how you too can save with solar, call SolarWide today on 07 5309 5871 or enquire on our website www.solarwide.com.au