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 battery.
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 supply charge).
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 cloudy.
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 (more later).
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.
Source: https://pvwatts.nrel.gov/pvwatts.php (Value $ calculated at an average of 25 cents per kWh).
Back to our 10kW system example
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 ceiling.
- 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 good quality.
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 few years.
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 panels)
- 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.
There is a good overview of panel type here.
What about inverters?
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 80%.
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.
You can explore batteries here.
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.
I know I am using strong words, but the last company you should sell your power to is the energy retailer or the battery maker that takes control of your battery. Those schemes are fraught with often impossible to meet conditions and hidden charges. For example,
“You agree to allow us and our service providers access and control of your battery, at our complete discretion and as we deem necessary.”
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 provider decisions.
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:
- Switched energy plans saving an estimated $536 per year alone.
- Took advantage of the free LED light upgrade scheme saving an estimated $1,000 per year
- Installed OK 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 products).
- 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?