Are zero-dollar bill promises – just a solar marketing gimmick?
Often when one is interested in a solar system, the cheaper advertisements make big promises regarding financial returns. They use terms like Bill Busters or Zero Dollar Bills. How realistic are these claims?
Here at Replenishable Energy, we believe the first step in providing customers with a realistic financial solar outcome is taking time to educate, highlighting differences in technologies and the benefits provided specifically to their needs.
A high proportion of customers we meet are under the misunderstanding that if they have a solar panel system on the roof or in their paddock, that they can fully eliminate electricity bills.
The fact is when the right solar panel system has been installed, there will be a positive surprise as to how low the electricity bill has become, and the customer will walk away with a nice smile, but a completely zero-dollar bill – every time – that’s not likely.
Those with the biggest smile are these people that have installed solar panels towards the end of autumn because the summer’s sun radiation is so high that the impact and electricity generation of the solar system will be greatest on the reduction of your electricity bill, then in the middle of winter.
If you would choose an ethical solar installation company in Cairns, like Replenishable Energy, we will tell you how much electricity and electricity cost saving you can achieve with your Solar PV system.
We will tell you how much electricity consumption you are offsetting and what the anticipated Return On Investment (ROI) also known as the payback period will be. This way when you do face a bill in the mail you are not surprised because it is not zero.
LG has a very good ROI calculator on their website. Give it a go, to see how financially affordable solar can be in the Cairns region. Due to our long solar hours, a 3 to 4 year ROI is possible and then a net profit benefit period of 2 decades is possible afterwards, as long as you have chosen, a quality component solution.
Staying connected to the grid means you will always pay the daily supply charges
Daily supply charges are those charges that are provided by the electricity supplier like Ergon for having the “opportunity and privilege” for the consumer to use electricity when they need it, like water from a tap.
The retailer has to maintain the grid and the power plant, and the consumer has to pay for it. Even if a solar system owner might use less electricity, the grid is still important to him or her, to export electricity to or pull electricity from when the sun does not shine.
The daily supply charge varies by State and electricity provider and is around $0.92 cents per day with Ergon in Cairns.
The only time you will not get a bill for your electricity is if you are disconnected from the grid, but then you would have other related costs for maintenance of your grid-independent renewable energy system including the battery bank.
Let’s look at a specific 6.6Kw solar system saving example
I have a solar panel system of 6.6 kW in Smithfield and in January to March quarter, my solar panels generated a total of 2950kWh of renewable energy.
This was made up of the following monthly outputs. January 1055kWh, February 965kWh, and March 930kWh.
I used around 65% of the electricity and 35% was exported. My local electricity rate per kilo Watt-hour (kWh) is 23c and the local Feed-in-Tariff (FIT) for the exported electricity is 6.5c.
The benefit of my solar system for that quarter was 1917.50 kWh self-consumption x 0.23cents = $441.02. Then I add also the FIT income which is 6.5 cents x 1,032.50 kWh = 67.11 cents.
Now I also used electricity when my solar did not supply enough or at night and as I did not have a battery, I had to get this from the grid at 23 cents per kWh.
My total use was 463 kWh over that period, with a cost of 463 x 0.23c = $106.49. Then there is also the supply charge of 92cents per day for 92 days = $84.64.
Therefore, my bill was $84.64 for supply, plus $106.49 for electricity use minus my credit for the exported power (-$67.11), leaving the bill at $124.02.
Without solar panels, my local Smithfield bill for the 1st quarter would have been for a total of 1917.5 kWh plus 463 kWh = 2380.50 kWh x 0.23 = $547.51. So I saved $423.49 in this quarter and had an affordable electricity bill.
The electricity cost saving can be better in summer than winter because the summer sun radiation is much higher than in winter, so the solar system will generate more electricity, and there is a lower chance of bill shock.
Then again in winter one is not running the air conditioning, so the electricity use is also lower but overall be prepared that your electricity bill in winter might be slightly higher than in summer.
Therefore, having a solar system means over a relatively short time the system pays for itself via regularly lower electricity bills, and even though none of them will be a zero dollar bill!
How to save energy to get a lower electricity bill
Bear in mind, a solar system only covers electricity used between the mornings and early evenings where you have depending on the specific region peak and shoulder tariffs in the evenings when the sun doesn’t shine anymore.
Don’t try and shine your torch on the solar system at night, or count on the moonlight it will not work, it is just not enough radiation.
Many households with solar still consume a decent amount of their electricity in the evening, when they are using their air conditioning or baking or washing the laundry.
One good way to save more on your electricity bill is when you can shift your electricity consumption to when the sun is shining because then you are offsetting your use to the solar generation, which means you use “free” electricity.
Saving money on your bill also very much depends on your household; everybody should use their electricity during the day rather than the evening after the sun is gone down.
Of course, this is subject to the size and generation capacity of your solar system.
This could take a little while, with some trial-and-error behaviour and also some discipline, especially with young adults.
What about solar batteries?
Of course, if you have solar battery storage, the battery can compensate for your consumption of past daytime power use. We at Replenishable Energy can help you with working out the correct solar battery size, depending on your average usage and the age and size of your existing solar system.
An alternative to a battery is to go for a very large (oversized) solar system but many energy retailers will not allow you to go over a certain size and don’t forget, you are providing the extra electricity mostly during the day, as a feed into the grid, at a lower value.
In summary, having a solar system to offset electricity purchases will be a good showcase to your neighbours, when you can show them all your savings.
Still, questioning the amount you pay for electricity?
If you’re still questioning that your electricity bill is too high, maybe have a look at where you use your electricity.
- Are you using your washing machine or clothes dryer in the evening – do it during the day.
- Are you using your pool pump during the evening and night – switch it to the day.
- Are you using your dishwasher in the evening or at night – start it in the morning.
- Are you charging your electric car at night or during the day?
- Is your hot water system still connected to off-peak? Get a hot water diverter.
- Do you have a large family and each has got a small air conditioner in their room, running at full power in the evening and not set automatic at a sensible temperature?
- Are you turning your air conditioner off at night or have it programmed to turn itself off at a certain time?
- Heating and cooling, dryer, and heating water are the highest contributors to electricity consumption for residential premises, consider replacing inefficient appliances.
Make sure that your solar system installer also gives you a good monitoring system so you can spot any abnormalities in system performance.
If you are serious about using solar power instead of grid power you have to make some changes to your habits.
In general, the quality long lasting solar system, if designed properly, will pay itself off between 3 and 5 years.
For any questions do not hesitate to contact Replenishable Energy on (07) 4031 2251 / 1300 682 773 to get more info.