Despite that fact that more than 1.3 million Australian households have installed solar PV systems on their rooftops (that translates to 1 in 6 homes with solar), there are many still misconceptions floating around about the solar industry, and these myths are costing homeowners real value in terms of lower electricity bills. The spread of these myths is fuelled by anti-solar energy supporters and people who are not up-to-date with facts about the renewable market space.
To put you in the know and let you decide for yourself about solar, here are the 5 most common myths and the truth behind them.
Myth #1. Solar is too expensive for usage
About a decade ago, this myth was somewhat true. However, the rising popularity of solar energy, more innovative technologies and large economies of scale (when more people purchase solar panels the manufacturing costs of the systems get lower over time) have significantly brought down the prices causing the average cost of system prices to be lower than ever before.
For instance, in 2009, a 5kW PV system cost ranged between $20,000 – $25,000. Fast forward to 2015, and the average price is about $8000 (with some companies selling solar systems at a cheaper price than that). Currently, the entry-level 1.5kW averages $3,500 all across Australia—quite affordable compared to how it was 5 years ago.
The Clean Energy Council explains that rising power prices, coupled with the falling cost of solar systems, still makes the solar business attractive even without the feed-in tariffs. According to the Bureau of Resources and Energy Economics’ 2012 Australian Energy Technology Assessment, solar power is expected to be among the cheapest energy sources within the next ten years.
Myth 2. The 6-8c/kWh Feed-in Tariffs reduce the viability of solar
This is definitely a strong myth and misconception about solar energy and whether it’s worth the investment or not. During the early times of the renewable industry, the government introduced tariffs (payments made to the homeowner[with solar system] for the excess power exported or fed back into the national grid). Basically, tariffs were introduced in order to encourage more investment in solar because it was too expensive, with focus on accelerating sales of solar PV systems, reducing system prices (using economies of scale) as well as generating excess electricity in the event that the grid gets overloaded (particularly on more sunny days or during hot summer days when air conditioners are turned on).
It’s worth noting that since their introduction, tariffs were not intended to run indefinitely. They were designed to have a time limit and on achieving their main objective of reducing electricity prices, they were to be reduced or scrapped all together.
Previously, tariffs were substantial (40-60 c/kWh of power sold back to the national grid) and many system owners made a lot more money from their tariff paybacks than they were spending on their monthly electricity bill, when they exported ALL their daily solar power back to the national grid than utilising it by themselves.
With time, tariffs delivered great results by increasing sales and reducing overall prices of solar PV systems throughout Australia. As a result, the need to pay system owners high tariffs was thwarted by governments, and as at now most of them range between 6-8c/kWh, something that has not gone down well with some people.
One thing that people tend to forget in all this is the fact that the solar PV system is meant to generate free electricity for your own use, and you don’t have to spend money on buying power from your retail energy supplier at full price.
Generally, using your own generated electricity instead of relying on the grid results in significant SAVINGS. Eventually, you’ll redeem the cost of your system within a span of 4-5 years, which is a great Return on Investment compared to depositing the money in your bank account and awaiting for interest to accrue.
Consider this simple illustration:
If your current power from the grid costs 24c/kWh (the common rate charged by most energy retailers) and the Feed-in Tariff payback is about 8c/kWh, why then export electricity back to the national grid to earn just 8c/kWh when you could make SAVINGS of 24c/kWh by just using your own solar PV generated electricity? Honestly, it makes no sense earning three times as much as you can save for the same unit of power!
Myth #3. Solar energy is only for massive power users. Why should I pay all this money just to power my fridge during the day?
Typically, your solar panels only generate electricity during the day, when it’s sunny (i.e. that time of the day when most of us are either at work or school). Some people tend to think that solar has no value to them since they are rarely at home during daytime.
However, your solar power can be used in a variety of ways even if you are not at home during the day. It’s better to focus on how you can utilise the solar power produced during the day instead of paying your energy supplier the full retail price for power. That’s where homeowners make real savings.
Try switching your power usage to daytime as much as possible. For instance, you can set your dishwasher, dryer or washing machine on a timer so they operate during the day. If your home has a pool, be sure to run the pump at daytime since pool pumps are heavy electricity users accounting for $500-$1000 per year!
If your solar PV system is able to conveniently power most or all of these appliances and others, you’re definitely smart and ahead of the game. Now, make it even more fun by looking for other ways of switching electricity usage to daytime in order to save more and more money. This is simply how homeowners can pay for their solar PV system within 4-5 years (some even pay for it in 3-4 years), without having to rely on the feed-in tariff alone to make money.
Always keep in mind that most folks are at home during daytime on the weekend and so their excess electricity can be used within the two days. In addition, those working from home, or full time parents at home can also maximise the use of the solar power generated during the day.
Myth #4. Electricity costs are always skyrocketing because of solar
It’s no secret that the price of electricity has continuously risen over the years and seems set to keep increasing. According to a report by the Australian Bureau of Statistics, the retail price of electricity rose by 72% in the 5 years preceding June 2012. And now that we are almost three years since then, it’s obvious that the increase in electricity price is well over 72%.
On many occasions, people blame the huge growth in Australia’s solar power market for the continuous rise in electricity price. But truth be told, on an annual basis, less than $93 (nearly ~25 cents a day!) is deducted from your power bill and channeled towards funding the Renewable Energy Target and other solar energy incentive programs designed to encourage more people to buy and use solar.
Critically looking at it, the rising prices have been caused by excessive spending by the bigger energy producers (in total approximately $45 BILLION!) on irrelevant network infrastructure. As a matter of fact, statistics show that dependency on electricity from the grid across Australia has had a downward trend since 2010. Even with this reality, major power companies still decided to go on a massive spending spree, building heaps of poles and wires as well as fossil-fuel-powered plants that are becoming unnecessary in the 21st century. For more information on this, try doing a search on the web for “gold plating of electricity grid” and you’ll be dumbfounded at what you discover.
Last but not least, the rise in prices was also blamed on the carbon tax, even though it was less than 9% of your power cost. Recently it was reported in Victoria that electricity price has again risen BEYOND the prices residents paid before the tax was removed! It’s therefore evident that getting off the grid is the only way to save so much money!
Myth # 5: Solar panels won’t work during the cold winter weather
The fact is, solar PV panels are unaffected by temperature and generate power depending on the amount of sunlight the solar panels get exposed to. Surprisingly, solar panels perform better in colder weather conditions as opposed to hot, summer temperatures.
The cold yet sunny days in winter seasons could produce comparable levels of solar power to an extremely hot day. However, despite not being able to generate as much solar as you would during the summer season, your solar PV system is designed to allow you draw on the excess electricity credits generated during the hot summer days.
Though this may sound counter-intuitive, consider this: Solar PV systems on a rooftop in cool but foggy areas generate only one percent less power than one in a sunny and hot area. Solar works perfectly all across Australia. You’ll be amazed at the amount of clean, renewable energy available every day, even during winter.
How to save money with solar energy
Congratulations for making it this far! By now you must be excited about the benefits of solar power (and perhaps ditched some of the misconceptions). The next big step is to get 3 FREE no-obligation quotes for solar energy from reliable installers servicing your area.