Would you fancy a zero dollar power bill? If the answer is yes and I am sure most people would like that, then read my latest blog on why you should get as many solar panels as you can right now. Not only is a zero dollar power bill possible, but you can also be in credit each bill.
The one thing that I love about the grid-tie solar is that it is easy to work out the financial benefit. There are only two economic benefits:
The first saving potential is your offset savings which are your INDIRECT SAVINGS. For each kWh of solar energy that your solar PV system generates which is used by your home or business, that is a saving against you buying that same kWh of energy from the grid. If you pay 30c per kWh for the power that you buy from the grid, then your offset saving for self-generated electricity is 30c per kWh. I call these indirect savings as you cant see the economic benefit quite as clearly as your direct savings below. The only way to see this benefit is by seeing your average energy draw (indicated on your power bill) reduced and your total power charges less – because you have purchased less power from the grid.
The second savings potential is a via feed-in credits for your exported Solar Energy. A feed-in tariff is your DIRECT SAVING. This is what you can see on your power bill, which is solar energy exported to the grid multiplied by the feed-in tariff rate offered by your energy retailer.
My blog ‘Fancy a zero dollar power bill?’ is based primarily on direct savings achieved through a high solar feed-in tariff.
I have crunched the numbers, and the return that can be achieved is phenomenal! In the current market with a corona virus pandemic, interest rates are at an all-time low. Nobody in their right mind will put money into stocks and shares and property is not looking like the usual safe haven. But a large grid-tie solar system can yield a minimum return of around 20-30% per annum with some systems achieving 30-40%.
Let’s get started – Let me show you how you can achieve a zero dollar power bill.
Update: Origin Energy has dropped its solar boost plan from 21c to 18c (capped) per kWh. See my blog here
AGL is the only energy retailer now offering an uncapped 21c solar feed-in tariff on its ‘Solar Savers’ plan.
AGL has just one rule. The total system size cannot be greater than 10kW. That means the inverter size cannot be 10kW or greater nor can you have 10kW or greater of panels. For example. 30 x 330w panels = 9,900 watts (9.9kW) which is ok. 36 x 285w panels = 10,260 watts (10.26kW) which is NOT allowed.
For this financial return analysis, I am using a new residential housing estate in Sandy Beach. I am using our solar design software to determine the conservative output potential for a variety of system sizes to show you the economic Return for solar under these 21c solar feed-in plans and why you should get as many solar panels as you can.
*Annual generation based on an 87% system efficiency for each design.
**Minimum savings as this assumes 100% export of Energy at a rate of 21c per kWh. This does not include offset savings (indirect) from self-consumption of solar energy at a higher cost – typically $0.25 – $0.30 per kWh.
***General price per watt for a performance range solar system, assuming no export limit. Payback period should be quicker if also factoring in the indirect savings.
Now it is imperative to add that all of the returns mentioned above do not factor in ANY export limit restrictions. Essential Energy facilitates power distribution on the Mid-North Coast and Northern Rivers of NSW. When we install a solar PV system, we have to apply to Essential Energy to connect a solar PV system at a specified address to their network. A general rule is that established properties on single-phase power supply in an urban area will be approved for 5kWh export. That means you can export 5kW of Energy per hour back to the grid. Rural areas may have a lower limit. Industrial estates will have a higher limit.
But here is the kicker. Essential Energy is very tolerant towards solar and rather than merely using a blanket approval of 5kWh per household like Ennergex in QLD; they will look at it on a case by case example. Generally, new residential estates will have a higher grade of electrical infrastructure setup than established estates. That means new transformers and underground transmission lines. The result is that it may be possible to be approved for a much larger solar system which does not have an export limit. Those returns shown above are achievable in some new residential estates. That is until Essential Energy changes the rules.
The critical observation here is that even if you are export limited to 5kWh – it makes so much economic sense to still install up to 9.9kW’s. Why? Your absolute minimum return on investment is $1659 per annum under the AGL solar plan. If you have additional solar generation (over and above the 5kW limit) then what will happen is that your household will use the extra solar Energy to cover daytime power draw/baseload power needs.
The above rationale assumes a 5kW export limit, but you may be approved for 6 or 7kWh of export limit. At my house (I live in a new estate), I have a 7kW export limit.
See below minimum returns based on a 6kW export or 7kW export limit.
*based on your receiving a 21c feed-in tariff and based on the layout design above, with no shade.
I hope that this blog has helped to illustrate my reasoning as to why people should get as many solar panels as they can now.
Written By Mark McClurg
Business Owner – Coffs Solar Energy
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