Economics Summary

Electricity Price History

We've established that the power companies rate increases have made a very strong case for the pursuit of electricity usage minimisation:

Grid connection charges have gone up 93% in the last nine years, whilst per kWh charges have gone up 67% over the same period, equating to a $740 increase in price for the same usage by the end of the nine years.

Behavioural and Technological Changes

At a dollar cost of $1,130 and a lifestyle cost of a little bit of "harden up and get used to it", we have reduced our electricity costs by around $760 per year, giving a payback period of less than 18 months.

Even the kids are now aware of efficiency and minimisation.

Solar PV System

At a cost of $6,000 we have reduced our electricity costs by, conservatively, $850 per year, giving a payback period of seven years.

Conservatively.

Combined

All up it looks as if we're better off by $1,610 per year for having minimised our electricity usage through better behaviour, better technology, and the installation of a solar PV system. Overall that's a 67% saving based on 2014's electricity costs.

Our last two quarters of electricity have cost us $180 combined. In comparison, the same two quarters from the previous year cost $1,140. By these numbers, this is a $960 saving in 6 months, hence my repeating the word Conservatively above.

The numbers and comparisons will be updated as more bills arrive and more data is gathered. This will allow my figures to approach reality from these conservative estimations.

The Future
  • Behavioural changes, once turned into habits, can last for a lifetime
  • Newer technologies with increasing efficiency in the use of electricity are always on the horizon, and get ever cheaper with time
  • Electricity prices tend to go up with time, as starkly demonstrated
  • Solar panels have an expected lifetime of 25 years, and the inverter around 10 years
  • The efficiency of solar panels continues to improve at the same time as becoming cheaper
  • Batteries (storage, power shifting) see footnote 3 at the bottom of this page
  • Electric (and autonomous) cars...
Help Yourself

If you want to avoid paying up to 67% of your normal annual electricity bill to your provider the best time to start your research is yesterday. If you can't do that then start right now. Along with getting a handle on your actual electricity usage, this is a good starting point:
https://www.solarquotes.com.au/faq.html (I'm in no way affiliated with Solar Quotes, other than being grateful for the information they provided which helped me on my way).


< Prev | Back to the Start >

Footnote 1: Real Economics (?)

There are a lot of complicated calculations that I have avoided doing in regards to calculating "once it pays for itself" or break-even or ROI or whatever you choose to call it. Something that I used to wonder about is whether I'd be better off putting the solar panel investment into the mortgage, then getting solar panels once the house is paid off or if, at that point, it makes more sense to put the money into an investment account. Well, I eventually did some of those calculations, you can have a look at it here:: $6,000 Investment Comparison

Footnote 2: The Carbon Tax

This analysis is just showing the numbers and then having a bit of an enviro-political rant. If you're not interested in the enviro-politics bit, ignore the text and focus on the graph: The Carbon Tax

Footnote 3: Batteries

This doesn't need its own page or a graph, it's an easy calculation. A standard estimate for a battery system is $10,000, let's assume that includes installation. Solar panels are saving us $850 per year and will be responsible for a reduction of about 45% of grid-imported electricity. By those numbers we'll still be paying around $1,000 per year for electricity (this is obviously a high estimation given the last 6 months cost us $180).

That gives a payback period of 10 years, decreasing if (when) electricity prices go up. In comparison to solar panels it's a bigger outlay for a longer return, and the batteries (almost all of the flavours) have a lower expected lifespan than the solar components.

Like many others that have done the numbers, I've concluded that batteries are currently for hobbyists, enthusiasts, and the honourably green-minded with more money or a smaller mortgage than I. Within a year or two, however, batteries will be as much of a must-buy as I've demonstrated solar panels are now.