Savings and Benefits
How does a solar power system save me money?
A solar power system saves you money in 2 ways; self-consumption of the power produced and exporting power to the grid and being paid a feed-in tariff.
During the day, when your solar power system is generating electricity, the power generated is first used to meet the electricity needs of the household however solar power can only offset the cost of tariff 11 electricity, it will not offset loads running on tariff 33 (most commonly swimming pools) or tariff 31 (electric hot water systems).
This is known as self-consumption and maximising the amount of electricity self-consumed by your home is key to maximising your return. For that reason we strongly recommend that swimming pools are transferred from tariff 33 to 11 as your solar power system (if it is large enough) will easily cover the running costs of the pool – we do not however recommend switching electric hot water systems from tariff 31, a view that is backed by Energex.
Most electric hot water systems have a 3.6kW element and on a nice sunny day a 5 or 6kW system can probably meet the energy demand of your hot water system however that will use up most, if not all, of your solar power generation and you may not have enough surplus electricity run other items such as pools, fridges, washing machines and so on. Also on rainy days the solar power system will not generate anywhere near enough power to cover the hot water system so you will be paying full price to heat your hot water.
At the time of writing tariff 11 power costs around 26 cents per kWh and tariff 31 15.7 cents per kWh – you can also receive up to 14 cents per kWh as a feed-in tariff therefore switching a hot water system to tariff 11 will save you around 2 cents per kWh. This small saving will be quickly wiped out after a few rainy days.
In order to maximise your self-consumption washing machines, tumble dryers, dishwashers, swimming pool pumps, vacuum cleaners and irons should, wherever possible, be run during the day. Installing a Fronius or SolarEdge consumption meter which shows both solar power production and household usage will really help you achieve maximum self-consumption.
The image below shows the a SolarEdge system in action and as you can see 3,450 watts of electricity is being produced of which only 790 watts is being self-consumed with the balance of 2,660 watts being exported to the grid. You can see at a glance that there is plenty of surplus energy to run another appliance.
Any excess energy not self-consumed by your home will be exported to the grid and you will receive payment for that power – this is known as a feed-in tariff.
Please remember that only the feed-in tariff will show up as a line item on your electricity bill – the amount of electricity you self-consume reduces the amount you will pay but it is not shown separately on your bill.
Excess electricity exported to the grid is recorded on your digital electricity meter and on your power bill you will see a credit for that electricity. Feed-in tariffs for solar power on the Sunshine Coast and throughout South East Queensland are not fixed, they are paid at the discretion of your energy retailer and the rate varies considerably. At the time of writing they vary from 6 cents to 14 cents per kWh.
Choosing the correct energy retailer is a key part of maximising your return however do not simply focus on the feed-in tariff. You should consider all of the following items:
- Feed-in tariff
- Price you will pay for electricity
- Discounts applicable and whether the discount applies to both usage and service charges or just usage
- Daily service charges
The retailer with the highest feed-in tariff may have a much higher daily service charge or a higher rate for the electricity charged or both. The good news is that you are not locked into a contract with any electricity retailer and you are free to switch retailers at any time without incurring a penalty. Our advice is to consider your choice of retailer to ensure you get the best possible deal.
What Government incentive is available for installing a solar power system?
All solar power systems, including replacement systems (until Jan 2018), are eligible to receive the small scale technology certificate (STCs) incentive. STCs are not a government rebate they are a tradable commodity and in most instances the owner of the solar power system will assign the right to create and sell the STCs to the installer or their nominated agent in return for an upfront discount off the total cost of the system.
The number and more importantly the value of the STCs varies. You can calculate the number of STCs your system is eligible by using this formula:
(System size in kW x postcode rating x number of years) rounded down to the nearest whole number.
The postcode rating for Sunshine Coast solar and the rest of South East QLD is 1.382 and the maximum number of years you can claim STCs for is currently 14 although that will reduce by 1 on the 1st of January every year.
A 6.38kW solar system is eligible for 114 STCs calculated as follows:
6.38 x 1.382 x 13 = 123.4402 rounded down to 123
The value of each STC is based on supply and demand and varies from $18 to $38 per STC.
For more information about STCs visit the Clean Energy Regulator website
Sun Works Solar Sunshine Coast is a registered STC agent.
Contact us today to find out how a solar power system can help reduce your bills
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