The Truth About Solar

How Solar Really Works

When solar electricity comes out of your panels, it will first get used by appliances in your home, with any surplus solar exported to the grid.

Electricity usage in your home is measured in kWh. The average Aussie home uses about 18 kWh per day. Generally, depending on where you live, you'll be paying roughly 30 cents for every kWh you use in your home.

Your electricity retailer will pay you a small amount (around 6-10c) for each kWh that you export to the grid. This is known as the "feed in tariff".

Because the amount you're paid for exporting solar is small, It is better to use the solar in your home than export it. 

This is because every time you use a kWh of generated solar in your home, you don't have to buy that kWh from the grid - which will save you around 30 cents per kWh.

Because feed in tariffs are around 6-8c per kWh, self-consumed solar electricity is about 3-4x more valuable than exported solar electricity.

This means households that use a lot of electricity during the day, or can set their appliances to run on timers, are a natural fit for solar and can see very short paybacks of 4-5 years (20-25% returns).

If you are at home during the day or have pool pumps which run all day, your self-consumption can be up to 65% (with exports only 35%) and solar is likely to be a very good investment.

If you are not at home during the day (hello to all you 9-5ers!), you will typically self-consume about 30% of a well sized solar system, pushing the simple payback out to 8-10 years.

Bear in mind that this is still a 10-12% return on your investment.

(Avoid any solar company that calculates your payback based on 100% self-consumption. No-one has 100% self-consumption. The company is being dishonest to get your sale.)

A good-quality solar system has a lifespan of about 25 years.

This means that, in a realistic scenario, you could pay back a new solar system in around 7 years, and then collect ~18 years of further savings from a solar system after that.

If your home is suitable for solar, you shouldn't be spending another second sending your electricity company ever-increasing payments every quarter.