Solar Electricity – Is It Worthwhile? (2014)


There is a lot of marketing information around about Grid Connected Solar Panels but not many independant facts. Here’s an example of an evaluation of a basic system for a house.

  • We use around 16kw hours (kwhr) of electricity per day which is fairly typical;
  • For each 1kw of solar panels we can expect to generate around 1300kw hours per year that’s an average around 3.5 kw hours per day;
  • For a basic 1.5kw system we should generate on average about 5.2kwhrs;
  • Our current tariff for power is $0.3152 /kwhr regardless of time of day;
  • I have done the evaluation assuming that any surplus power is sold back at$0.08/kwhour.

How Much Will Be Saved?

Weekdays (as we both work and the house is empty during the day) we should be able to put at least 2.5 kwhrs into the grid and use a maximum of 2.7kwhrs running fridges etc)

Income 2.5kwhr @ $0.08 = $0.24

Saving 2.7kwhr @ $0.3152 = $0.85

Benefit = ($0.24 + $0.85) x 260 days = $283

Weekends we probably will only put 1kwhr into the grid as we may well be at home using power for TVs, heating or cooling, etc.

Income 1kwhr @ $0.08 = $0.08

Saving 4.2kwhr @ $0.3152= $1.32

Benefit = ($0.08 + $1.32) x 104 days = $145

Total annual benefit is $428.4

Is it worth it?

Well there are some 1.5kw systems being advertised now with various rebates which cost less than $3000.

If you had $3000 on term deposit returning 4% that’s $120 a year, which would then be taxed. Alternatively if you put the cost on your mortgage that will mean that you are borrowing $3000 at a rate of around 6%. That’s costing around $180.

From these figures it looks like for the basic system you will be around $250-$310/year better off.

NB. I first did a Cost Review in 2011. Since then the cost of panels, and the government subsidies, have gone down. The cost of power from the grid has gone up. The overall financial advantage is around the same.


To see an updated review see Cost / Benefits


For similar posts see Solar Electricity in the Sustainability Tab


3 thoughts on “Solar Electricity – Is It Worthwhile? (2014)”

  1. This doesn’t mean I’m against renewable energy, just that given our current technology, living off the grid is not as simple and cost efficient as many people may think.

    1. I’m not proposing living off the grid but using a grid tie system, which avoids the extra cost of batteries.


  2. Capital Cost ($/kW) is the CAPEX we’ve been discussing, multiplied by 1000. Reasonable numbers for grid-tie systems, equipment only, are around $1.50 to $1.70, and you might add $1 to $1.50 to that for a fully installed system. Putting 3000 in this field should be safe.

Comments are closed.