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Solar Prices and Benefits of going Solar in 2022

Solar Prices and Benefits of going Solar in 2022

It has now become a very commonly known fact that the unchecked use of our non-renewable resources has led to innumerable harmful effects on the environment and will continue to do so if we continue on this path of ignorance and don’t take whatever measures we can in order to change the trajectory of our earth’s future. Developments made in renewable technology have given hope for a better future. Solar power is one such highly regarded renewable energy source which has come in to play a big part in helping us significantly reduce our carbon emissions. The installation of solar panels has never been more accessible and affordable thanks to all the developments made in the field of solar technology. Only a decade ago, the prices for solar was around $5 to $10 per watt and was really only accessible and affordable for people who had greater financial means to back such an investment. However, over the recent years, solar has become increasingly popular among people of all income brackets. The popularity of solar has been driven in part by the decreasing costs of manufacturing and also by an attractive federal STC scheme which offers up to 40% of the cost of the system via a government incentive. Over the last 5 years solar prices have continued to decrease dramatically as product manufacturers have reached economies of scale with production and as installation methods have been streamlined.

A lot of people are curious about the future of solar system prices as the government incentives won’t last forever. Many people in the solar industry expect the price of solar systems to continue to increase in price. Towards the end of 2021, there was a significant hike in prices for systems and the overall cost of solar increased by 10-15% as a result of global solar panel shortage and tremendous global inflation. It is important to note that, with the federal STC rebate continuing to decline each year until 2030 there is likely to be upward pressure on the cost of solar that cannot be overcome by increases in efficiency.

Benefits of installing a solar power system

Switching to solar power has two main motivators for the vast population. Other than the obvious positive impact that solar has on the environment, the installation of a solar power system has two major financial benefits -

1. Offsetting your electricity bills

The primary way in which solar helps customers to tackle their energy costs is by helping you generate your own power and not having to rely on the grid for all your energy needs. Solar helps in reducing the amount you need to buy from your electricity retailer which typically will cost between 20-40c per kWh. The solar power systems once installed will begin generating electricity which will work towards powering all your appliances with this clean energy source. Only when solar production is low (due to the weather, etc) or when your consumption is higher than the system you got installed, will you need to buy power from the grid to fulfil your requirements.

2. Get credit by exporting extra power

Any surplus energy that is generated by your solar panels once installed on your roof can be sold back to your energy retailer at a rate called a feed in tariff. In some states like for instance in West Australia, these rates are fixed and in other states the feed in tariff rate varies from retailer to retailer. Generally, the feed in tariff rate is always lower than the rate you are buying power for from your electricity provider. Your ability to access a feed in tariff is also usually limited to a maximum solar system size –it is best to contact your provider before going forward with the solar installation to make sure the system size you are looking to install is eligible for a feed in tariff so you can enjoy all the benefits solar has to offer.

It is important to note that since feed in tariffs are usually fairly low compared to how much you buy energy for (and rates have been dropping lately) it usually doesn’t make sense to go for a large system size unless you have large energy usage. Maintaining a high ‘solar self-consumption’ rate will help you optimise your return on investment.

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