Australia has the highest average solar radiation per square
metre of any continent in the world. More than two million Australian
households have a rooftop solar system. When is it time to go solar? We get the
lowdown from an unbiased expert.
When is it time to go solar? “Well anytime is good because solar is a no-brainer for many households, but there are some exceptions,” says Dom Gelonese from Emberpulse and part of GadgetGuy’s campaign to #Stop the energy rip-off.
We spoke at length to Dom about when is it time to go solar.
We paraphrase the interview to avoid extensive use of ‘he said’.
It turns out that while solar is always a good idea (as daily
showering is a good idea) it has some not very well publicised issues ranging
from shonky installers to unrealistic expectations of payback times. We also
discuss hooking up a battery and why that is not always economical due
including what 3rd party companies are trying to do with your
What is electricity?
You measure electricity use in kilowatts (1kW=1000 watts)
and the total power usage over time in kWh (kilowatts per hour). Hence you see
a tariff of X cents per kWh on your energy bill.
For example, let’s say that a small home uses 5kWh (500W x
10 hours) during the day (at a low and shoulder tariff of 10-25 cents an hour
or $1.25). That covers the fridge, TV, computer with occasional spikes for
boiling the kettle or making toast.
And at night it uses 5kW for lighting, cooking and
cooling/heating (at a peak 50 cents per kWh tariff or $2.50 plus $1 a day
On-grid you would spend around $5.00 per day or $1000 per year.
We will use those figures through this discussion as they are typical of a 2-3
person, standard family home.
What is solar power
The sun is up for 8-12 hours a day. Solar panels and a box
called an inverter converts sunshine into 240V power. Unless it is raining or
The sun sets every day, and the solar system goes to sleep.
It cannot produce power, so you are back on-grid unless you have a battery
When is it time to go solar? (rounded prices used for this example)
First, and most importantly, the solar system kW rating is
not the power it can produce per day.
A 10kW solar system costing about $10,000 (for a good
quality system), produces around 10,000kWh per year. This averages 30kWh per
day but can range from as low as 9kWh in winter months or cloudy days to nearly
50kWh in summer months. See the table below for Sydney.
Remember we are using a theoretical example. In this case, the
household energy usage is low to average, but the 10kW solar system size is oversized
for the home.
If you use 5kW in the day or ($1.25 a day or about $500 per year) the solar
system repayment time is about 20 years (which is almost the operational life
of the panels). That can be longer if you have a lot of cloudy days or the
system is not as efficient as it should be.
Most solar salesman will quote you a return on investment of
about 2.5 – 3.5 years (based on 25 years use) – if you sell power back to the
grid at $2000 per year. That assumption is often very flawed.
The flaw? Sorry we need to do more maths
So, you have 10kW (10,000kWh) per year production capability,
and you are using around 2,000kWh (5kW x 365 days) leaving 8,000kWh to feedback
to the grid.
A smart meter feeds excess power generated from your solar
panels back into the grid. The greedy energy retailers only pay FiT
(feed-in-tariff) of about 11-12 cents per kWh so at best that 8,000kWh excess could
yield around $1,000.
Solar is a no-brainer if:
You correctly match the system size to your
maximum daily use
You get maximum efficiency from it, e.g. it is
not a poorly installed cheapie!
And you are using lots of power during the day –
payback time can reduce if you run air-conditioning or charge your Tesla.
Solar makes no difference at night unless you
have a battery to store that excess capacity
But you get the drift – match the solar system size to
expected daily use, do not oversize it unless you plan on increasing energy
usage over time or getting battery storage, and do not expect much FiT income.
In other words, you are paying the capital cost of becoming a mini-generator
for your needs, and you will eventually get that back.
Rule One – the only rule – data is king and will tell you when is it time to go solar .
Our Emberpulse meter (about $500 installed) is the simplest way to help you get the right size solar system as it gives accurate hourly usage and cost data. And when you get a solar system, it will tell you if it is performing as it should – more on that later.
Why are solar salespeople talking about shorter payback times and saying you can get a solar system worth $10K for $5K?
They are factoring in a 5% year-on-year compound increase in
power costs over 25 years. So, what costs $1 today will cost $3.50 in 25 years.
That 3.5X factor is one explanation on why they can claim faster paybacks, but
in reality, without the power data from your home, they don’t know with proper
accuracy what the payback is.
But with governments trying to reduce artificially high
energy costs (they are about three times what they should be) and new homes
being more energy-efficient, that 3.5X argument is very thin.
It is a colossal mistake to theorise before you have accurate data specific to you. Hint – get an Emberpulse meter before you consider solar and definitely before you consider a battery. More on this later.
On the second point, Australia has a solar rebate scheme where STCs (Small-scale technology certificates) apply for installing a solar system. Depending on how large your system is, and where you live, the number of STCs you are eligible for varies (you can calculate that here), and therefore the amount of your rebate varies. Solar panel installers can turn STC’s back into money – you cannot.
See below how the industry is propped up by government
incentives. It is probably cheaper than building more power stations. And note
the real cost of a 5kW system (admittedly in 2012 and in US$)
The STC scheme is phasing out progressively by 2030. So, if
you are going solar, do it sooner rather than later.
What are the issues with solar?
Recently news.com.au stated one of the big problems with the
solar scheme is that despite guidelines and accreditation, dodgy panels are
coming in from overseas disguised as approved products, leading to potential
fires and electrocution risks. Its estimate is 25% of systems have serious faults.
Kind of reminds you of KRudd’s pink batts insulation scheme all over again.
Build.com.au states that the lack of clarity in requirements for solar installations makes it difficult to judge how serious the NSW inspection results are (20% of installations were deemed dangerous, and 60% had less serious deficiencies).
I think news.com.au is exaggerating, but all too often
shoddy installers con bargain-chasing householders over the panel or inverter quality/efficiency
and installation can be sloppy. The biggest issues are:
Shoddy so-called Tier 1 panels from companies
that will not be around to honour generous warranties
Penetration of the roof can cause leaks in the
Use of the wrong types of cables for run lengths.
The wrong sized inverter for the installation.
Poor placement/angle reducing power efficiency
even more. Unless you have a perfect north-facing roof, you will not achieve
maximum energy generation. I have never seen a shonky installer tell you that.
Ideal panel mount is North Facing (0° Azimuth and 20° from horizontal).
Bargain hunters thinking that all systems are
the same – the cheapest is not the best, and you need to take a long-term view.
I would really like the Government to provide independent certifiers to check installations and withhold STCs until the job is perfect.
If you have a spare 10-minutes, the video below shows the horrors of cheap so-called Tier 1 panels where warranties are useless as the installers or the panel’s manufacturer or both have gone out of business.
Not wanting to push Emberpulse meters but ask the installer
if they are Emberpulse accredited and if so, you can count on a fair deal and
Solar panels lose efficiency over time
I have seen some dodgy 250-300W, 60/120 cell, P-type, Poly, PERC,
Shingled and Multi-busbar panels claiming to be ‘Tier 1’ (there is no such
grading – it is marketing hype). These have low power generation efficiency
(<20%) and worse, less than 50% of that efficiency, (e.g. 10%) after just a
Premium monocrystalline solar
cells using 60-96 cells and N-type IBC silicon, with 335-360W ratings and 20-22%
efficiency are the panels to buy and yes, they are the most expensive.
Solar panels lose power generation efficiency over time and
due to heat. You will see a much-touted 25-year ‘performance’ warranty on most
panels. Read the fine print.
Most panels have 5-10-year manufacturing defects (failure) warranties, but under Australian Consumer Law, the warranty is the installer’s liability. They are frequently not around long enough to honour it.
Then there is the so-called ‘performance’ warranty that
panels will still produce say X% of the efficiency at 10 years and Y% at 25
years. Cheap panels might be 60% of the efficiency at 10 years and 30% at 25
years – ditto.
Good panels should have 90% of the efficiency rating at ten
years and 80% at 25 years.
To put all that in perspective (using standard 1 x 1.65m
10 x 250W cheap panels produce about 2.5kW now and 1.25kW at ten years
10 x 360W good panels produce about 3.6kW now and 3.15kW at ten years.
So, if you wanted a 10kW system, you are going to need 40 cheap panels (that will not output 10kW after ten years) or 27 good ones that will.
A lower-cost solar only inverter lasts from 5-10 years (usually
with a 5-year warranty and about $500 to replace). Many cheap installers use under-sized
inverters (ironically called ‘over-clocking’ and they will dazzle you with
science saying that is OK). You need perfect-sized inverters.
And battery technology is moving to AC Coupling, meaning
that you don’t need a special solar/battery hybrid inverter – just a grid-connected
inverter. This is the way to go, and yes, it costs a little more for these
batteries but it provides you with redundancy in your energy system. If the
battery inverter fails, you still have the solar inverter functioning to keep
your bills low while you replace it.
How an AC Coupled battery system works – the example is
Tesla PowerWall 2, but there are many others.
My advice – try solar first and add AC Coupling batteries
later if Emberpulse shows that you will financially benefit.
Also, beware there are often deliberately hidden costs that
the cheap advertisers do not tell you until you have signed up. For example,
you will need a smart meter, your main power board may need upgrading or
replacement, electricity cabling may need to be rerouted or replaced, and the
installation may be difficult needing custom mounting frames.
And you may be convinced to install a more expensive hybrid
solar/battery inverter that you may not ever use. All this can add thousands to
the cost making payback far longer. My advice, install solar today with a standard,
correctly sized solar inverter, ensure the wiring is set up to easily add a
battery and separate battery inverter later when the time is right.
Now to batteries
Battery ratings are in kWh – in other words, they can
deliver X kW for an hour. Let’s say that is 10kWh or 10,000 watts for one-hour,
5000 watts for two-hours, 2500 watts for four-hours etc. The amount of energy from
the battery is also limited by inverter connected and battery type. So, ensure
these are performance-matched.
To put that in perspective a 2500W heater (or oven/cooktop)
will almost exhaust it in four hours!
kWh are like litres in a fuel tank. Then you need to know
how much fuel you use to match your needs. If your house has a V8 power need at
night, you may require larger kWh batteries and solar systems to ensure you can
both charge the battery enough and have enough storage for overnight usage.
Then there is the round-trip efficiency, e.g. how much power
you lose in charging batteries and then inverting it to 240V. While good
batteries will have an efficiency factor of 95% or more cheaper ones have around
Then there is the cycle warranty – the number of times a
battery can charge from “0%” (it never truly goes to 0%) to 100% expressed as in
kWh based on one cycle-per-day. Some have as low as 10,000kWh cycles while
others have up to 50,000kWh. This can mean a cost difference per warranted kWh
from 20 cents to over $1.
Then you have construction – Lithium (and all its variants), Aqueous Hybrid Ion, Graphene and Zinc Bromide to name the main ones. Locally made Zinc Bromide (Z-Cell is really looking the most promising).
This also impacts on the kW load it can steadily deliver. A
cheap 10kWh battery may only be able to continually deliver 30% of its rated
output and a good one close to 90%.
So, we have two million households generating their own electricity during the day. But what about the night?
Back to our example – solar will cover the day, but you need
a battery if you want to cover the night. That 5kW on-grid costs around $2.50
per day or in round figures $1,000 per year.
Solar batteries vary in cost – the cheaper ones (with
shorter life and recharge cycles) may cost $800 per kWh to the best at $2,000
per kWh. That 10kWh battery that ranges in price from $8,000 to $20,000 – can
take up to 20 years to deliver a positive ROI. Catch 22 – the battery usually
lasts up to 10-15 years – this is not cost-effective.
But I can sell electricity back to the grid (feed-in tariff or FiT) and reduce costs
Yes and No. Currently, the only way to sell power back is
via your energy retailer (the one you pay the daily supply charge of between 70-100
cents). And you need to install a smart meter and other switching gear.
Remember, Australia is already over-supplied with solar
power during the day. In my opinion, that is hurting the delicate grid balance
because it needs less power during the day and a huge ramp-up at night when
solar does not work, but batteries do.
The retailer will pay you around a paltry 7-11 cents per kWh
whenever you export to the grid. BTW they usually resell that power for ‘many’
(at least four-to-five) times what they are paying you.
A householder currently can’t sell directly to the grid, but
there are investigations into neighbourhood and regional co-op type schemes
that make the aggregated supply into a mini-generation station. If this gets
off the ground (and I am sure GadgetGuy will be first to report on it), then
you may see power purchased at 40-50cents or more per kWh. That brings the
payback time to a few years.
“You agree to allow us and our service providers access
and control of your battery, at our complete discretion and as we deem
Summary – When is it time to go solar?
If you buy the right-sized, quality solar system for your
immediate and near-future needs, it is a no brainer to do it now providing you
realise that pay-back time depends on knowing your real use, not some
theoretical salesperson’s spiel.
If you buy a larger system than you need then you extend
payback periods considerably – there is no value in that unless you intend to
put in a battery to cover night use and FiT.
There is no such thing as a free lunch, and if you get a
bargain, it is at the expense of efficiency, reliability and longevity. This is
a 25 year+ purchase, not a five-year purchase when dodgy installers won’t be
around to honour warranties.
Who can you trust to tell you when is it time to go solar ?
Emberpulse – we don’t
sell solar systems – allows you to monitor energy use minute-by-minute,
day-by-day, device-by-device, etc., to help make the best energy use and
In your case (GadgetGuy), you are now more energy smart. You
have far better energy use habits that save you hundreds of dollars a year
without going solar. Based on Emberpulse data, you:
Google LED task lighting allowing you to leave most of the downlight
‘banks’ off. Not only does this save money, but it eliminates the Blue-Light
issues as well.
Worked out when to use Airconditioning and when
to use energy-efficient micro-climate heating or fans (like Dyson and De’Longhi
And you know when to use an energy-efficient
convection microwave oven or a double grill over a stovetop or use smart plugs
to control energy use.
Most importantly, you have realised that you do not need a
10kW solar system that the cheapies were flogging, and you were salivating over,
for $5000! The right size for you is more in the 3.5-5kW range, and a battery
will never give the payback to cover your night-time use let alone sell back to
the grid (not at 11 cents per kWh anyway).
Emberpulse will let you know when it may be time to look at
solar. Armed with that data, you can objectively consider quotes and with a
little research, assess the quality of the system.
Perhaps the last companies to trust are those that advertise
the most or those affiliated with energy retailers or battery makers.
GadgetGuy’s note: When is it time to go solar?
Solar makes sense if you can find a good supplier and pay for a good, well matched, system.
This interview is part of our #Stop the energy rip-off campaign. Emberpulse provided the Embermeter and EmberIQ for review. There has been no payment for coverage – we consider this a service to readers, and it is an interesting journey.
When we first started our average energy usage during the
day/night was over 500Wh/1kWh) and now it is down to less than half that. I
love saving money – don’t you?