Tuesday, August 31, 2010

STOP - Read this before you buy your Solar Panels

Much is made in the press and online about installing solar panels, and given the vast numbers of solar panel providers who are popping up around Australia at the moment, it looks like the idea has caught the public imagination.

The main thing that people focus on is "how long is the payback period"?

i.e. If I'm going to pay out $10,000 on a system, how long does it take before I have made that $10,000 back through either: the electricity company paying me for the electricity I generate and sell them, or the amount of money I will save by not paying the electricity company for the power I have used.

A key component is whether your feed-in tariff (the amount of money that you get paid per kWh) is paid Net or Gross.

Net is where you get paid for every unused kWh you push back to the grid.
Gross is where you get paid for every kWh you generate, irrespective of whether you use it or send it to the grid.

Now, obviously, if you're going to install a system in an area that pays a Net Feed-in Tariff (such as Victoria - at approx $0.66/kWh), you want to ensure that you're pushing as much of the power you generate back to the grid as possible.

Now let's look at a typical house power consumption, with the help of a Current Cost ENVI and Google PowerMeter.

The graphic below is for a three bedroom wooden house in Melbourne's western suburbs.

This home is relatively efficient, but observe the "Always On" power use of 4.3 kWh per day. This is the amount of power that this house is using every day, even if the owners were on holiday.

Let us make an assumption here that the solar panels will be generating at least 180 W (the level of the standby power use in this house) for 12 hours a day on average over the year.

This means that an average of 2.15 kWh per day is being consumed by appliances on standby that would otherwise be being pushed back to the grid.

This is 2.15 kWh x $0.66/kWh = $1.42 per day that is not being earned.

Doesn't sound like a lot does it? Let's multiply that by 365 days... $520 per year!

Now let's assume that this house in it's current state sells back $1000 of electricity per year to the grid, which gives it a ten year payback time ($10,000 / $1000 per year = 10 years).

And now let's work out how long the payback time will be if the owners remove their "Always On" power consumption during the day...

$10000 / $1520 = 6.5 years.

So just by reducing your standby power consumption, your payback time falls (in this scenario) by a third....

Now, consider this - the average home "Always On" figure in Australia is not 180W (4.3 kWh / 24 hours)... it is far, far higher. We have seen homes in Australia that use 3 or 4 or 5 times this figure when no-one is at home.

So before you spend tens of thousands of pounds on a solar PV system, get yourself a Current Cost ENVI from SmartNow an hook it up to Google PowerMeter. Yes, we want you to buy our product, and we're in business to make money. But believe us when we say that it's going to be the best investment you make this year.


  1. Did I write this article? Of course not! The message though sounds all too familiar!

    A round of applause goes to the writer, for this post. Clearly it explains what most Aussie homes are missing the point on.

    Before one generates power on the roof, one must reduce wasted electricity under the roof!

    The Current Cost ENVI is one way that a home can do this. Being able to reduce usage and wasted electricity 24/7, even before we even think of generating electricity.

    Aussie Home Energy