Most people know getting solar installed is one of the best ways to save money. Working out the amount you could save depends on a number of factors, but there is a simple calculation you can use to estimate it.
First, it’s important to understand the factors that will influence how much you’ll save. These include:
- The size of the solar system you install: This will impact how much solar energy you generate. The bigger the solar system, the more solar energy it will produce.
- Where you live: Households up north see more sun and therefore generate more solar energy than households down south.
- Your energy rates: This includes your usage rate and also your feed-in tariff (the amount you’ll be paid for your solar exports.)
- Your energy use: The amount of energy you use in your home will give you a good idea of how much solar power you’ll use in your home vs how much excess you’ll have to export. This will impact your savings because you’ll pay more to buy electricity (your usage rate) than you will be paid for your exports (your feed-in tariff). So the more solar you use, the more you’ll save.
How to calculate how much solar panels could save you
To estimate the amount of money your solar system could save on your energy bills, complete this calculation:
Solar system size x annual solar generation x $ value of solar power per kWh = Annual solar savings
Here are some general rules to help you come to these numbers…
This is location dependent.
If you live in Victoria or Tasmania, a 1kW solar system will, on average, generate around 3.6 kWh of solar energy per day, or around 1300kWh each year for a system installed facing north. For east-west installations the number might be 15% or so less.
If you live in New South Wales, South Australia or Queensland, that number will be closer to 1450kWh each year for a north-facing system.
$ value of solar power:
As a rule of thumb, we assume the value of each kWh of solar power would be around 20 cents.
This is essentially the difference between your usage rate and feed-in tariff (assuming a 30c usage rate and 10c feed-in tariff and that 50% of your solar power is exported).
If you are a small energy user with a big solar system, you might want to adjust the 20 cents to 15 cents (if you export 75% of your solar power) or 12 cents (for a 90% export).
Calculating your savings:
So for a 4kW solar system in VIC or TAS:
4 x 1300 x 0.2 = $1040 saved each year
And for a 4kW solar system in NSW, SA or QLD:
4 x 1450 x 0.2 = $1160 saved each year
Save even more on your energy bills by using more solar power
The above calculation assumes you’re able to use around half of the energy your solar system generates in your home, and export the rest. However, as we saw earlier, most feed-in tariffs are up to three times less than the rate you buy electricity for.
So it makes more financial sense to use as much solar power in your home as possible, rather than exporting it during the day and buying electricity back in the evening at three times the price.
If you could use more than half of the energy your solar system generates in your home, you’d stand to save even more money on your bill.
Get a battery at the same time as your solar panels
While you can try and use more solar power by running your appliances while the sun’s up, the best way to maximise the amount of solar energy you’re using in your home is with a battery.
Batteries store your excess solar power to use later on when the sun has gone down. This means you can use your free solar power day and night, and dramatically reduce the amount of electricity you have to buy from your power company.
The good news is, if you’re getting solar panels, now is the most cost effective time to get a battery. In fact, by installing solar panels and a battery the average home could slash their energy bills by 80% or more!
Our solar and battery system can pay for itself in 7 years*
Designed specifically for households adding solar panels and a battery at the same time, our solar and battery package brings world-leading, tier 1 solar panels together with an Australian-designed battery solution in one streamlined, cost-effective package.
The package comes in a range of sizes depending on your energy needs, household set-up and budget. Plus there are financing options available so you can start saving with your solar and battery system now, and pay it off over time.
If you already have solar, but want to add a battery, check out our solar battery package.
*This scenario is the 6.6kW system and a mid sized battery (7kWh). Assuming typical generation in Victoria and assuming battery gets cycled 90% of the time at 90% depth, solar savings are estimated at $1,734 ($0.20 average value of the solar generated, which could be 10c FiT and 30c usage rate at 50/50% as an example). Battery savings would be an additional $440 per annum, for total savings of $2,174.