The Hidden Solar Savings Your Electricity Bill Isn’t Showing
“It’s not worth it.”
It’s a line you may have heard from friends or family who have invested in a Solar PV system. They will likely reference their latest electricity bill, which only showed a measly $20 credit in solar savings they received for the solar energy they exported to the grid, which has convinced them that their investment in solar wasn’t worth it.
This incorrect assumption that solar power isn’t worth investing in usually occurs due to a lack of understanding about the different components of an electricity bill, or placing all of the value of a solar system in the feed-in tariff.
Your solar energy system explained
Your system converts light from the sun into electricity, which can be used to power appliances in your home or exported to the grid when it’s not needed. With a solar PV system, you don’t need to worry about switching between your own generated power and power from the grid – this will be done automatically. For a more detailed explanation, click here.
Your electricity bill
Unfortunately for those with solar, your electricity bill does not show the total amount of energy your solar energy system has generated, nor does it show the total amount of solar energy your household has used.
What your electricity bill does show, is the amount of solar energy from your system that your household could not use, that is the “excess” energy your solar system has generated and subsequently exported to the grid. It also shows the amount of energy you used from the grid to supplement what your solar system generated.
A feed-in tariff is a great extra, but it should be seen as only that, an extra. Feed-in tariffs are not necessary to ensure that investing in solar is financially viable. The real value of solar is in displacing the amount of electricity you have to purchase from the grid with solar energy that your solar power system generates, for free.
Your solar inverter can provide you with information like the amount of electricity being produced at any particular point in time, or how much energy it has generated for the day or in total since installation.
Many quality inverters feature wired or wireless internet connectivity and sophisticated on-line monitoring and reporting, which will be able to tell you the total solar production for a given period. It’s also possible to install additional monitoring which will allow you to view your electricity consumption from the grid (this is normally an optional extra).
How to discover your real solar savings
Let’s go back to our friend who is disappointed with the $20 credit on their latest bill. We can see from their online monitoring system that their 5kW system produced 1,360 units over the billing period (remember this isn’t shown on the bill). The bill shows that 285 units were exported from the solar system which resulted in a credit of $20 (285 x 7c = $20).
To work out how much of the solar generation they are actually using, we simply subtract the amount of energy exported to the grid from the total amount of solar production recorded:
1,360 units generated - 285 units exported = 1,075 units consumed
Multiply this number by their electricity cost, and viola! We have the amount their solar system saved them during their bill period!
1,075 units x 28.33c = $305
That’s $305 in hidden savings they aren’t seeing on their electricity bill. Add this to their feed-in tariff ($20), and they’re officially receiving $325 in solar savings!
Unfortunately, most homeowners don’t go into this sort of analysis and take their bill at face value. You need to remember that your energy bill is only showing half the story and remember that while you may not be receiving much from your feed-in tariffs, you will be saving a lot by offsetting your grid electricity.
To find out how much solar could save you, please call us on 1300 074 669 or request a call back for a free, no-obligation assessment with one of our energy consultants.
The calculations and results shown in this blog were calculated using figures applicable to the Renewable Energy Buyback Scheme (applicable to Western Australians), which was replaced by the Distributed Energy Buyback Scheme on 7 September, 2020. Click here to learn more about what these changes entail.