The weather has turned wintry, so with the current round of energy bills there are plenty of reasons why people are getting a little hot under the collar about the cost of electricity.
As the price of electricity rises, the costs of installing a solar system are supposedly falling to more affordable levels – making it an attractive alternative for people hoping to tighten their purse strings. With the added benefit of government feed-in tariffs, which reward individuals based on how much solar energy their home feeds back into the state’s energy grid, you may now be seriously considering the viability of getting some panels on your roof and reaping the benefits of solar power. But are solar panels really a wise investment? Let me share with you what I’ve discovered.
Take my house, for example. Not a large place, it measures around 125 square metres. My electricity consumption does not vary much – I use approximately 12 kWh (kilowatt hours) every day. The solar salespeople tell me I would find a three-kilowatt system to be most beneficial and this consists of 12 panels.The halcyon days of receiving a high return of 30 to 40 cents per kWh are long gone
There are significant price differences between solar-panel suppliers, so it pays to shop around before purchasing. Of the calls that I made, the average price for a 12-panel system to be installed in my area was $6000.
Once installed, the feed-in-tariff scheme pays me based on how much solar energy my house feeds back into the energy grid. The halcyon days of receiving a high return of 30 to 40 cents per kWh are long gone. Now we need to negotiate directly with electricity retailers to determine a price for the energy we produce.
Prices range from five to eight cents per kWh. I found the average price for five of the suppliers in my area was 6.6 cents. I suggest you also check out the government website before making any calls.
Based on these figures I can now make an informed decision.
The salespeople tell me I would possibly only generate up to 10 kWh to be fed back into the energy grid each day. That is a mere 66 cents reduction on my bill per day. As my current account is for 91 days, solar energy would reduce my usage charges by just over $60 for the quarter. But I still need to pay the daily connection fee.
Does the tariff offset my initial outlay? On these figures, the annual return for my solar panels would be $240.24. Divide the cost of the solar panels by this figure and you can see how long it will take to get a return on my investment.
If I take my $6000 and invest it at 3.2 per cent in a high interest savings account, I will have $192 after one year. Or I could put the same amount into a term deposit with an interest rate of 3.65 per cent and expect a return of $219 after 12 months. Furthermore, a personal savings notice saver account with an interest rate of 3.9 per cent will give me $234 in a year’s time.
If an investment is supposed to be about making a profitable return on my money, I’m left to wonder whether solar panels will only do that by giving me a potentially higher sale price on my house.
If you are concerned about the rising cost of energy bills, now is the time to do a simple calculation of your weekly electricity costs. Incorporate that amount into your budget and you will become one of a few people who doesn’t dread the arrival of the quarterly account.
At the moment my electricity costs me just $35 per week. And having now done the research into investing into solar energy, my money can stay in the bank a little longer.
Do you already use solar panels? Have they saved you money?