Should I Go Solar?

Should I Go Solar?

Should I go solar and should I install a battery?

Off-grid, on-grid, hybrid AAARRGGHH. This is a dilemma/question everyone asks themselves and we get asked often. All our staff are either currently on solar or are going solar, that I suppose is an answer in itself. As with everything in the building game though, you need to establish your current and expected future electricity usage and do the numbers. What is best for you? What it will boil down to is how much electricity you use and just as importantly, when and do you want to be totally self-reliant, how green do you really want to be?

What will the future hold? Electricity prices have been spiralling upwards for years and is likely to continue. Politicians always assure us they are doing everything to bring prices down but alas, they never do. Will pricing drop? Doubtful in my opinion. Will they stabilize? Possible but based on track records, unlikely.

Based on current pricing, I believe the scenarios I have put forward below will show you the economic value of solar power in any one of its forms. What about the future? Nuclear power? Even in the unlikely event that Australia did go nuclear, prices may stabilise but unlikely reduce. In any case it would be a decade or two before a reactor would be up and running to provide you power and that is if they made the decision today. A solar power system could have paid itself off three to ten times by then. Fusion reactors? Beautiful, clean, cheap energy but when? And again decades before this technology could be implemented. Our only viable green energy solution is solar power.

I want to save money! Oh, and I want to be green.

We have found that some clients just want to do their part for the environment and choose solar to reduce their environmental foot print. This is commendable and if your disposable income allows for it, great. Even rarer are people wanting to off-grid completely. Solar energy allows us to be green, environmentally friendly. It achieves this in two ways. Firstly, by generating your own clean energy. Any energy you produce through solar conversion means there is less coal being combusted to produce that energy and conversely, less pollution/greenhouse gasses being produced. Secondly, any excess energy you don’t use can be sold back to the grid for use by others, again reducing those greenhouse gasses/pollutants, the by-products of electricity production.

Most of us though see this as a further investment that could add to our financial stress, so a more clinical analysis of the cost benefit of going on-grid solar or installing a hybrid system has to be made. Make no mistake, irrespective of your electricity usage, going solar will save you money but the big question is “how much” and “is it worth it for me”.

The chasm between off peak, shoulder and peak electricity charges are significant. If you are a low energy consumer and you find yourself at work most of the day, especially getting home late in the afternoons, your savings will be less than someone who is at home during the shoulder (7am to 2pm & 8pm to 10pm) and peak times of 2pm to 8pm. If you live out west where the temperatures are cooler in winter and much hotter in summer, you will be using more electricity than someone that lives on the coast where it is warmer in winter and cooler in summer. On the coast you often get a cool sea breeze in the afternoon during the summer months, so you might not need as much cooling in the afternoon, just open the windows and let nature do its job. Conversely, if you do not have access to that sea breeze, you will be making that air conditioner work harder and consequently, make the energy company happy.

System Options:

Off-Grid Solar systems.

As appealing as this may sound, no electricity bills at all “free power”, the investment is prohibitive and there are some pitfalls to this set up. If there was a failure of any kind in the system, you would be left with no power or options to pull it from the grid. Effectively a black out with no resolution until you get the problem fixed. Extended bad weather will reduce the amount of power you collect from the sun, likely less than you need. Without a huge bank of storage batteries, you could find yourself short of power, again with no options to draw from the grid. Extra storage batteries to cater for such eventualities would be even more prohibitive financially. Batteries are currently the singular most expensive aspect of a solar powered system, either off-grid or in a hybrid system.

On-Grid Solar only.

This would be the most cost efficient way to reduce your power bills and environmental footprint. During the day, your solar system will be generating power that you will use and any excess sold back to the grid. The buyback rate will vary from provider to provider but is generally at the 11.5c per KWh here in Sydney (rates will also vary from state to state). If you are an astute shopper, there are always better deals to be had if you shop around and play providers off each other. However, be careful of companies that flaunt higher feed in tariff rates. They usually come with a proviso that you must purchase and install your solar system through them, usually at a much higher cost than you could get from the multitude of installers out there. OR their peak, shoulder and off peak rates are much higher, negating any real benefit unless you are near self-reliant with a big enough system and battery. Note, there are two types of feed in tariff types, gross and net. With a gross feed in tariff system, all your energy produced is exported back to the grid at a fixed rate and any energy you used is purchased from your electrical supplier as you would pre solar installation. With a net feed in tariff system, your home draws all the energy it requires from your solar system and only the excess energy produced is sold back to the grid. What this essentially means is that any excess power you do not use will be sold back to the grid, offsetting your purchasing of power from the grid when you using electricity at home after dark, when your solar system cannot generate electricity or times when your energy usage exceeds your solar installations production ability. Please note that a KW system refers to how much electricity a system can produce in an hour (KWh) not the total electricity produced per day, that is, you will be producing a lot more energy than you use (ie 5KW system may generate 20KW+ per day). Ideally this means your electricity bill should be zero but alas, as mentioned earlier, the grid buys back at a much lower rate than they sell to you during peak times. Hence, your bill will drop from thousands to hopefully hundreds of dollars and unfortunately, not zero.

Through our own experience and talking to consumers that have installed a 5KW to 6KW solar system, the average user, approximately 20kW per day, enjoy a quarterly saving high enough to conceivably pay off the initial investment of a cheap solar system in 2 to 3 years, cost effective in my opinion.

Hybrid Solar power.

The Holy Grail of balance when it comes to solar power systems. Near off grid energy independence, best reduction in environmental footprint, short of going off grid, grid back up for shortfalls in energy needs due to bad weather, occasional over use or maintenance issues and the ability to sell your excess electricity back to the grid during both the day and night. Depending on your solar system output, the size of the backup battery and your daily usage, you can truly come close to eliminating any reliance on the grid or at the very least, minimize your purchase of excess energy. Before you get too excited though, please note that batteries are still quite expensive so a hybrid system will be at least double and depending on the battery you decide to install, could be triple to quadruple the price of a solar only installation.

Here again, your usage and or your time of main usage will determine what size battery you should consider installing. As an approximate guide, if you are a large family with heavy usage during peak times, a battery of the size and capacity of the Tesla 2 would offer you the best value for money in regard to cost per KW and storage capacity to carry you through those peak times. While you sleep, a good percentage of the energy stored in your battery can be sold back to the grid. Alternatively, if you are single or a small family that works late and or doesn’t use a lot of energy during peak times, a smaller battery may offer you better value for money. The smaller the battery though, the less you can sell back to the grid at night. Unfortunately there is no one size fits all solution and there are widely varying scenarios from person to person, family to family that must be taken into account when choosing a system that is right for you.

Battery only option.

Not many people have given this option much consideration but it is worthwhile investigating. Unfortunately it is not green in any way and conversely will not reduce your environmental footprint BUT it can save you money. It boils down to when you are drawing your energy needs from the grid. For example, if you installed a 13.5KW Tesla 2 battery system, you could charge the battery to capacity during off peak times (at night), when electricity is cheapest. You could then use that stored energy during peak and shoulder times. Again, it allows you to draw the electricity during off peak times and use it during peak times, only needing to draw from the grid when you exhausted your stored energy in the battery, minimising the electricity you would need to draw to hopefully only shoulder times to make up the difference. Speaking to people having this battery only setup, on an average daily usage, they have indicated savings up to $5+ dollars per day. That is approximately $500 per quarter and no solar panel investment.

What are feed in tariffs and what will I be paid for them? If you have a solar power system that is connected to the grid, your electricity provider or state government will pay you for any excess electricity you feed back into the grid. Before we continue, you will often here the terms “sell to the grid”, “buy back”, “sell back” etc used on the internet and throughout my blog. These all refer to what is correctly called the “Feed in Tariff”, the amount of money that your electricity provider will pay you for every KW that you feed into the grid from your solar power system. This should not be confused with the “Solar Rebate”, which is a government discount off the price of a new solar power system, applied at the point of sale. Solar rebates vary from state to state and have been reducing steadily. The solar rebate is a one off discount whereas the feed in tariff is an ongoing payment/credit to you per KW, either monthly or quarterly, depending on you contract. You also have what are called STCs, Small-Scale Technology Certificates. These are tradable certificates you can create and trade yourself and sell through the open market or an STC clearing house or assign to a registered agent/installer for an upfront discount off the cost of your system. Click on this hyperlink to view eligibility for STC certificates.

What size solar system do I need?

This question is a little easier to answer. It will boil down to how much electricity you use and when you use it. The average family with an average sized house uses about 20KW of energy per day throughout the year. Note that 20KW is an average, it will likely be more during the peaks of summer and winter and lower during spring and autum. I personally have a family of 5 and generally no one is at home from 8am to 4pm on weekdays. Hence I only use around 20KW per day through the peaks of summer and winter (4 split A/Cs to blame). During spring and autumn we can use as little as 8KW (note I have an instant hot water natural gas system and a gas cooktop), LED lights throughout the house and only 1 TV. I have friends that use 40KW to 60KW per day, albeit they have bigger homes with bigger air-conditioning units, multiple TVs, dryers etc and in some cases pools and have people at home all through the day.

 Taking an average of 7.5hrs per day of solid sunlight, a 5KW solar system will theoretically generate 37.5KW of energy per day. More than enough you would say? Well yes and no. You have to note that we do not have solid sunlight all day every day also the performance of the panels degrade over time. Different manufactures will quote different percentages over 10 and 25 year time frames. It would be wise to investigate what performance guarantees the panel manufacturer provides. I personally would go for a 6.6KW system to ensure I get full benefit during the afternoons and have a good amount of surplus to feed back into the grid. Even if I didn’t use any extra power myself, the extra 1.6KW per hour (12KW per day), at 11.5c per KW feed back would equate to $503.70 optimal (at the very least $300 to $400 practical) credit back from your supplier per year. Technically, you could pay off the extra investment of a 6.6KW over a 5KW system in 2 to 3 years, after that it is pure savings. If you are able to negotiate feed back rates or change to provider that offers better feed back rates, the savings could be up to double that. Even if you went with a smaller solar system, you may not save as much as you would on a larger one but you would still save plenty, with a smaller investment. Irrespective of my personal opinions, you would be wise to get numerous quotes from different installers who will evaluate your unique usage, the investment you are prepared to make, the savings goals you are trying to achieve and advise you more specifically on a customised set up that will suit your needs.

What Am I looking for in a solar panel?

This will depend primarily on your budget. By this I mean, if you are looking for a high end system from LG or SunPower, they will offer 25 year warranties. A price performance solar system, this would be a middle of the road panel and set up of course would not. For example, for that price performance system, you would expect a warranty to provide at least:

  • A 10 year warranty for your inverter 
  • A 10 year warranty for your solar panels
  • A 5 year warranty for the workmanship

You would expect a top end system to last a lot longer, as you are paying up to double the price, to last a lot longer, hence LG and SunPower extend their warranties to 25 years. I would be looking for a 10 year warranty on the workmanship as well. As a general rule of thumb, you would be looking for a warranty that lasts twice as long as you expect it to take to pay of the investment of the solar system. Batteries however are quite expensive. Warranties traditionally last for 10 years and this is roughly how long it takes to pay off the investment with savings. Unfortunately, no options here.

Ensure your panels are of a reputable brand. A warranty, no matter how many years are stated, is useless if the manufacturer disappears. This, to a large extent, comes down to the installer. Reputable installers will only use reputable brands and will back up their warranties, sometimes above and beyond that stated by the manufacturer. You will pay more for this security though. You will find that different companies can quote wildly different prices on the same system. This is usually a measure of the reliability and trustworthiness of the installer. There are cowboys out there that are very cheap but they usually do not last very long. It is no guarantee but use this link for the Clean Energy Council list of Accredited Installers. If your preferred installer is not on this list, it does not suggest that they are absolutely not trustworthy but means you should use caution and perform your own due diligence. As with panel providers, Fair Trading or the Ombudsman cannot help you if your installer has wound up and no longer in existence. Your only recourse in this case would be to hire an independent specialist to examine your system to determine the fault, then approach the manufacture of the faulty component for warranty, hence, only use reputable component manufacturers.

Your roof doesn’t face the optimal direction, should you still consider solar?

On face value, this is a sensible question. The answer comes in two parts. Firstly, the optimal direction in the southern hemisphere is a north facing direction as it will give you the maximum exposure to the sun throughout the day. Let’s say your roof faces east or west? You would only lose 10-15% efficiency on your solar system but consider this, if your peak usage is in the morning or afternoon, it may actually make more sense to orient your solar panels to the east or west, depending on your electricity usage habits. Why? Because even though north facing gives you more exposure to the sun throughout the day, it would be less efficient than an east facing panel in the morning or a west facing panel in the afternoons as the sun is setting.

As with everything we have discussed, it really depends on individual circumstances. If you have a huge battery or batteries that can store a majority of the power your solar system can produce then of course north facing panels would be ideal but who is willing to invest in 20KW to 30KW of battery storage. If you have a smaller battery or no battery at all, as mentioned earlier, it could be more advantageous to have an easterly or westerly orientation. Even with a large battery, a 10-15% loss of efficiency over all, is acceptable as, for example, an easterly set up will produce more power in the afternoons, when you are paying peak rates for electricity. Even though less efficient over all, it could still save you more money in the end.

Secondly, unless your roof design absolutely precludes it, your installer can manufacture brackets to provide you with the optimal orientation. This of course comes at a small premium but depending on your orientation and efficiency loss, may well be worth it.

In conclusion, unless your roof design allows you no other orientation but south and your panels would be in a continuously shaded area (eg, between two buildings), a solar system would still be well worth it. In fact, even if south facing and shaded, you would still save, just not as much.

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