In the 2021 Future Energy Report, an interesting clash was revealed. Cost savings from rooftop solar was a reason some householders sought installation, but the cost of installation was a reason others didn’t. So, what gives?
Amongst those that don’t have solar panels installed on their homes, 78% say installing them is simply too expensive. However, amongst those that have had them installed, their main motivation (81%) was to reduce their electricity bill. Almost half the solar cohort were also motivated by the fact that it would increase the value of their home – and these were just a handful of the interesting insights from this year’s Future Energy Report.
So, if one group says they’re too expensive to install, and another says they reduce costs and add value, who’s right?
Origin Solar Product Manager, Damien Power, says the upfront investment in rooftop solar is typically around $4,000 to $6,000, including any solar rebate. If this only produced a saving of $400 to $500 annually, the panels would be paid off within ten years. But solar panels tend to save significantly more than that.
We spoke with Origin customer Daniel, who recently had solar panels installed on his two-storey, five-bedroom Canberra house. While many households opt for around 6.6kW of panels, Daniel had over 10kW installed.
Because of the larger install, the final cost for all of the work involved was around $10,000.
So how long would this larger install take to pay off?
Daniel’s average quarterly energy bill prior to the install came in at around $1,800. In the 12 months since the install, his bills have been $800, $660, $700 and $1,700. The larger, fourth-quarter bill was a result of an overcast and very cold Canberra winter.
Even with the overcast weather, in just 12 months Daniel has saved around $3,340. His panels will be paid off within three years of installation, and from that point he’ll likely be saving over $3,000 annually (subject to his ongoing usage requirements).
Taking the mathematics further, we have estimated that over a decade, in his large house in Canberra (where weather can get very hot and very cold, indeed), without solar Daniel would have spent around $72,000 on power bills.
Instead, we estimate that his spending over ten years, including the cost of the solar installation, will be around $49,000 – a handy saving of $23,000. This is dependent on energy consumption remaining similar to over the 10-year period.
“The payback on solar is typically excellent,” Damien says. “Figuring out whether solar is worth it is less about the upfront purchase price and more about comparing the upfront purchase price to the saving you will make on your electricity bill.
“It can seem an expensive purchase up front, but with many options for interest-free repayment plans, some of that pain can be avoided. When you look at the savings as well as the upfront costs, you’re typically going to pay back that investment over a relatively short period of three, four or five years. So, is solar worth it? In most cases it certainly is.”