Why is the cost of electricity increasing so much?
You certainly are not alone in receiving a letter or email from your electricity retailer advising you that the cost of electricity increasing, in many cases and areas substantially. This extends to businesses as well as homeowners adding to the rising cost of fuel, groceries and almost everything else we purchase.
So, why is the cost of electricity increasing? Firstly, it is worth understanding why the price of power is going up. This is mainly being attributed to surging prices for coal and gas linked to international markets. Power retailers have pushed for a rise in tariffs as their costs are soaring to exit coal fired plants, along with unexpected generator outages and general international unrest and instability. European countries, particularly the UK have experienced double, even triple the cost of energy prices in the last few months.
The Australian Energy Market Operator (AEMO) revealed wholesale costs soared 141% in the first quarter of this year compared to last year. Average prices reached $87 per MWh, 67% higher than Q4 2021 to put that into context. As more power stations close in QLD and NSW prices are forecast to reach $150 per MWh in the next few years. What this means for the homeowner is continually increasing power bills.
Will solar panels help?
Yes, in short, however a correctly sized solar and battery system will protect you from every price rise in the future as we tailor your solution to your current and expected energy needs. Solar without a battery will help, we continue to install many systems without storage, but now more importantly than ever it is worth discussing this with an expert to understand the benefits of both. Unit price increases are coinciding with incoming demand charges for many homeowners, something a battery can assist with.
Financing solar may also be a viable option to offset the installation against the saving achieved from your power bill. As the price of power increases so does your saving and return. Again, this needs to be discussed with a solar craftsman to ensure this is suitable for your budget and home.
There is never a better time than right now to install solar energy. The STC rebate winds back each year, you begin generating a saving straight away and pricing has relatively stabilized following Covid-19.
I’m struggling to pay my electricity bill
With is the cost of electricity increasing, there is assistance available for eligible households to help with their energy bills. All homeowners in QLD, VIC and WA are entitled to an energy credit/rebate that will appear on their power bills, Victorians need to visit an energy comparison site from 1st July. Other states have assistance for those that need it most. Please also speak to your electricity retailer if you need to, they have assistance available.
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