Are solar panels worth it in 2022?
Sometimes we take for granted how lucky we are as Australians. As I am writing this, I am looking out my office window and the sky is baby blue with a tiny white cloud passing by. We have the best beaches, a resilient economy, vast natural resources and a lifestyle that the rest of the world envies. There is a lot to be grateful for! But, are solar panels worth it for us?
Not only do we have a lifestyle that 90% of the world’s population would trade theirs for, but we also have a front seat and a cheap ticket on the Solar Coaster available to us. And, if done right, what a ride it can be for Ozzys.
Whether solar panels are worth it or not, will depend on what your personal expectations are, as well as what your roof is like. Generally speaking, solar panels in Australia are a better buy than anywhere else in the world. But why?
This is the obvious one, so let’s go over it first. We have amazing sunshine in Australia, which means amazing solar production compared to most of the world.
More sunshine = more solar power.
The amount of solar energy you are likely to produce will depend on how solar friendly your roof area is, as well as where you are located geographically. The table below shows expected solar production in all capital cities in Australia. This data is based on a North facing roof, with no shade which is pitched at 22 degrees. The amount of solar production you will get is the best place to start to work out if are solar panels worth it.
These are the industry standard calculations for working out a very approximate solar production estimates for different areas in Australia. As mentioned above there are many variables here to consider so please use this as a rough guide.
It is also worth noting that if you use very good quality solar panels paired with a very efficient inverter and have the solar panels installed by an experienced installation team, you can easily produce way more than these numbers. We have seen some solar arrays produce 27% above these expectations. For a list of all major solar panel brands and their pros and cons, click here.
So, the solar production is very good here, which is a good start when working out: are solar panels worth it. To work out whether solar is actually worth it though, we will obviously also need to factor in how much it costs. After all, even if you produce more energy than anywhere else in the world, that doesn’t really matter if you have to pay more for solar panels than everywhere else, right?
So, how about the cost?
Quite often in Australia we have to pay more for things compared to other countries like USA or lots of European nations. This is because we are a smaller population, which means less volume for manufacturers and distributors. When there is less volume available, you have to work on larger margins per item you sell to make it worth your while. This makes sense logically, but it doesn’t make it any less frustrating for us Ozzys.
So, using this rule, which applies to almost every product I have researched, solar panels should cost more here than a lot of other countries… But they don’t!
The average cost to install solar panels for your home in Australia is $1.10 per watt. This takes into consideration lots of different types of solar panels and lots of different installation variables. To put that in perspective, the same solar panels in America will cost on average $2.40 per watt. In the UK, they will cost $2.05 per watt.
So, solar panels will produce more energy here than almost anywhere else in the world, and they are also cheaper than almost anywhere else in the world! But why?
This is largely due to generous Government rebates.
They Government have backed solar power in Australia for many years and we are very lucky to have heavily subsidised solar panels available. Australia is split into four zones which determine how much rebate you will get for your solar install.
Depending on which zone you are in, you will get more or less rebate, which will have an impact on whether solar panels are worth it for you. This is because some zones get more sunshine than others and are therefore rewarded with more rebate as the solar production will be higher. For more information about the rebate click here.
Because we get this large rebate, the cost of solar is really low. And because we get really good solar production, the payback is really quick too! This is why we have more solar per rooftop than anywhere else in the world!
So, how long does it take me to recoup my money?
Because solar is heavily subsidised and we get such good solar performance, the payback period is also very good in Australia. There are lots of variables here of course, but typically the return on investment (ROI) for a solar system with no battery is between 20% – 40%. This means you will recoup your outlay and achieve your ROI between 2.5 – 5 years.
The difference here is how you use the energy you produce. Essentially, when you are producing solar power you will either use the energy in the home or sell it back to the grid and get credits for the energy sold. Typically, the amount of money you get for the energy sold back, is less than what you are being charged for the energy you buy. So, what that means is, the solar energy you produce and use in your home, is more valuable to you than the solar energy you sell back to the grid.
As an example, if you produced 20kWhs in a day and used all of the energy, it would save you approximately $5 (this is based on buying energy at $0.25). However, if you produced the same 20kWhs and sold it all back, it would save you approximately $2.40 (this is based on selling it at $0.12). Please note, the amount you can sell energy for, and the amount you buy energy for, varies quite a bit depending on location and which retailer you use. These figures are really approximate and designed to explain how the theory works only. Basically, the more solar energy you produce and use, the more money you will save. This is why we always advise people to use as much of their energy as possible during solar energy hours by putting things of timers to run through the day while the solar panels are working.
What about the environmental impact?
When calculating: are solar panels worth it, lots of people will consider the environmental impact as well. At GI Energy we understand that the financial side of purchasing solar power has to stack up. However, solar panels don’t just produce cheaper electricity, they also produce clean energy, which doesn’t rely on fossil fuels. We can all help to make a difference with climate change, and your solar investment can contribute massively!
Because we get really good sunshine here, and therefore really good solar production, the environmental impact is also really positive. The table below gives examples of how you can reduce Co2 by installing solar power.
Please note, this table is designed as a rough guide only, and is not going to be 100% accurate. There are so many variables with individual installations and locations, it would be difficult to offer a generalised table like this that was 100% accurate. However, it does give a good guide, and you can see how drastically we can reduce our carbon footprint by installing solar panels!
What’s the downside?
Solar is great…if it is done right! Unfortunately, with large Government rebates and a great financial return, the solar industry has been somewhat of an easy target for marketing companies to enter into, looking for quick sales. The industry is very saturated with a mix of some really good, reputable companies, and lots of questionable ones! You have to be really careful when choosing a solar retailer to look after your solar installation. The solar panels and inverter are important, and the installation is important as well. For what to look for with a solar installation, click here. We hear horror stories everyday of people losing deposits, not getting what they have been promised, or having a system stop working only to find the company they purchased from is longer around, and the equipment has no warranties.
The answer here is to do your research! Look up ABNs to see how long the retailer has been trading for. Check reviews. Make sure the solar panels they are installing are good quality, and take your time making sure you are comfortable with whoever you choose to install your system. Do not shop purely on price – make sure you are getting good value!
When it is done properly, solar is excellent in Australia.
Summary: Are solar panels worth it?
Every home or business is different, and we all have to make our own mind up as to whether solar panels are worth it for you. What we do know for sure is that Australia is pretty much the best place on earth for solar! We have a strong and mature solar market here supported by generous Government rebates and a wonderful solar friendly climate.
I personally do not know of many investments that provide returns of 20 – 40%, with very low risk, that also provide a really positive impact on the environment we live in.
We have more solar PV per rooftop in Australia than anywhere else in the world. And it is quite easy to see why!
Here are some links worth checking out: