Are Solar Panels Worth It? A Review in 2023
Thinking about getting solar panels? Let's run the numbers
With electricity prices rising, many Australians have installed solar panels to try to avoid high power bills, but are they worth the investment?
It’s almost an Australian rite of passage to spend summers sitting under a fan, or by an open door hoping to capture any breeze to avoid a big electricity bill. In the last decade electricity prices have increased by more than 60 per cent and the average Australian pays $1524 annually - with this number readily increasing for larger households and families. So it’s understandable many of us try to avoid the temptation of turning the air conditioner on.
It's no surprise then that solar panels have started to spring up across Australia (as many as 1 in 3 suitable households now have solar panel systems). They allow you to stay cool and comfortable without the high power bills, and they save you money in other areas too.
How to determine whether solar panels are worth it for you
Let's evaluate the investment using a simple formula:
1) Cost (what you pay to install solar panels and buy the hardware, and any associated costs of having them later down the track such as repairs)
2) Return (money saved on electricity bills, or other returns like an increase in property value)
We'll also split this into the two possible branches of investment: the return on just solar panels, and the return on solar panels and battery storage.
Just Solar vs. Solar and Batteries: What's the difference?
Solar panels on their own are cheaper, but mean you only generate solar power during the day and leave you still very much reliant on the grid. Battery storage allows you to store excess energy, which can set you up for self-sustainability.
How much does a solar system cost?
The cost to install a solar power system varies depending on the size, quality and hardware configuration. Although prices have come down dramatically since 2012, systems still cost several thousands of dollars.
Just Solar panels: $6000 - $15,000
Solar panels with battery storage: $15,000 - $35,000
How much can STCs, rebates and other government incentives shave off?
Just Solar panels: Typically between $2000 to $3000
Solar panels with battery storage: Typically between $2000 to $4000
What is the payback period?
To get a return on solar panels, you must first determine how long it will take you to pay off the solar panels themselves.
STCs and rebates from the government go a long way towards shortening this time frame.
A solar power system can take several years to pay off, with the exact length of time depending on the system you chose and the kind of returns it yields. For example, while more expensive up-front, a solar and battery system may cover 80% to 90% of your bill, while just panels may only shave off a small fraction.
Other factors that affect the solar payback period include the amount of sunlight your solar panels receive (which is why your solar installation, roof orientation and even solar panel angle is important), how much electricity you use, your solar feed-in-tariff and how much you pay for electricity.
It will also vary depending on what you setup your solar system to achieve. For those opting for the bare minimum of a solar panel and inverter setup, the system will cost less upfront but will only reduce your electricity bills rather than eclipse them. You will still rely on the grid for much of your power, but the payback period will be shorter.
For those who opt for a complete solar and battery package, the payback period will get better the longer you own the system for. This is due to a higher upfront cost, but also much higher savings on energy bills across the years.
Which option is better - just solar or solar and batteries?
There is no one size fits all - and it will depend on what you can do financially at the time.
Reposit relies on solar panels and batteries in order to guarantee our customers receive $0 power bills. We enter anyone who installs solar systems through us into our No Bill Power Plan for at least 5 years, ensuring the variables are removed and the return on their system is guaranteed from the outset.
You can find out if your home is eligible using the button below:
What are the returns on a solar panel system?
Think about how much you have paid in electricity bills across the past 1 year. Then consider that electricity prices increased by 70% across the last 10 years in Australia, and that as recently as 2023, they skyrocketed by between 20% - 30% on top of that.
Prior to the electricity price hike in 2023, the Australian national average households spent between $2000 - $3500 on electricity bills every year. Across 10 years, this equates to:
Low-end: $2000 x 10 = $20,000 per year
High-end: $3500 x 10 = $35,000 per year
With the 20% to 30% increase, you can add up to $6000 - $10,500 to that for the same amount of electricity usage and no additional services from your power company. Ouch.
As fossil fuels like coal and gas continue to decline and be impacted by global shortages, war and other foreign affairs, they will only become more expensive.
This means that your returns on solar power generated will only increase over the next 10 years. How much you'll save will depend on your solar system, whether you have just panels or a battery, whether you trade energy to the grid or rely on self-consumption tactics, and your reliance on electricity company pries (for example, if you are buying and selling from the grid).
Savings on electricity bills range from 0% all the way to 100% depending on these factors.
How much can you earn from selling power back to the electricity grid?
You can sell your excess energy into the grid and receive some credits on your bill, though these credits (known as feed-in tariffs) are fast falling. See the below estimates of what you might earn from your solar feed-in-tariff.
Annual FIT & offset value based on 3kw System
|Location||Based on 35% of electricity
being fed into the grid
|Based on 25% of electricity
being fed into the grid
|New South Wales||$1126||$934|
Estimations on annual FIT & Offset values are provided from the Clean Energy Council of Australia.
How much can I save if I power my entire home on solar power?
Solar self-consumption refers to consuming the solar power you generate to power your household. Self-consuming your solar generated energy is your best option to get value out of your panels as feed-in tariffs fall.
You can get the best value from your solar panels if you use energy during the day, since this is when your panels are creating electricity from the sun.
However, if you want to continue these savings throughout evenings, early mornings, night time or through bad weather or winter, you will need to invest in a solar battery that can store excess solar power for longer. This allows you to more evenly distribute that energy across your own household's needs, instead of relying on selling your energy and buying it back from the grid later. With electricity prices running high, and feed-in tariffs low, the trade off for exchanging energy is not nearly as financially efficient as simply making use of your own stored energy.
Will it add value to our property?
Electricity bills have risen sharply, and the appeal of one less utility bill is attractive to any buyer. In March 2023, it was announced that Victoria would see a 31% increase in electricity prices, while NSW would see a 22% increase.
In addition, they discovered three quarters of renters said they would pay additional rent to live in a property with solar energy.
So are solar panels worth it?
The short answer is yes in almost all cases, but to get the best value out of your panels you will need to understand how your household uses power and start thinking about self-sustainability instead of relying on feed-in tariffs.
A few years ago, the rate on your feed in tariff made it an easy choice. But as of 2023, most solar systems installed will have a very hard time achieving a satisfying return on investment without a solar battery to aid them.
Solar savings are a big driving force behind solar uptake - and our team is always happy to help you understand how you can make the most of a solar installation as electricity bills continue to climb.
If you're ready to look into solar power, getting started is easy. Find out if you're eligible for No Bill and we'll guarantee you $0 bills.