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Solar Power vs. Traditional Electricity: A Cost Comparison
Solar Power vs. Traditional Electricity A Cost Comparison

Solar Power vs. Traditional Electricity: A Cost Comparison

Published on:
February 26, 2024

You must make smart choices when considering how much energy you use and compare it with how much you can save with solar power.  

Not only do these choices help the Earth, but they also save you money. Keep reading to learn about the costs of solar power compared to traditional electricity and why saving energy with solar energy is vital. 

If you’re considering solar power, it is crucial to know how it affects your money and the good things it brings compared to regular electricity in Australia.  

In this blog, we’ll know about a cost comparison of solar power and traditional electricity so that you can wisely choose the cheapest and most eco-friendly energy for your house.

Overview of Solar Power in Australia

The use of solar power has been growing for many years, and it’s no surprise why. This is especially true in Australia, where we have a lot of sunshine.  

Solar energy is made by using unique technology to turn sunlight into power. It’s a great way to get energy without harming the environment because it comes from the sun, which is abundantly available.  

Solar energy plays a significant role in Australia’s energy landscape due to its abundant sunlight and commitment to renewable energy. Australia has one of the highest solar radiation levels globally, making it an ideal location for solar power generation.  

The use of solar panels on residential rooftops and large-scale solar farms has grown substantially in recent years.  

Many households and businesses have installed solar panels to generate electricity, with excess energy often fed back into the grid for credits or payment.

Government Rebates

Government rebates, feed-in tariffs, and incentives have encouraged the adoption of solar energy systems nationwide. These policies aim to make solar power more accessible and affordable for homeowners and businesses, driving further uptake. 

Solar Installation Costing

One of the main things to consider when considering solar power is how much it costs to install. Solar panel systems need panels, inverters, wires, and people to install them.  

The initial cost of setting up a solar panel system can be between $10,000 and $30,000, depending on how big and complicated it is. That might sound like a lot, but you should consider the incentives and rebates available, which can bring these costs down significantly. 

There are incentives from the government that can make the upfront costs much lower. The Federal Investment Tax Credit (ITC) can give you back up to 30% of what you paid for the installation as a tax credit. 

On the other hand, when you move into a new home or business, you don’t have to pay upfront for the electricity infrastructure.  

Usually, the power plants and wires are already paid for by utility companies. But this means you’ll keep paying for the electricity you use over time. 

Furthermore, advancements in solar technology, including efficiency improvements and cost reductions, have contributed to the widespread adoption of solar energy in Australia. As a result, solar power has become an integral part of Australia’s renewable energy.  

Why Solar is Better?

grid power

Energy Efficiency and Savings:

One big reason to think about solar panels is the money you can save. In Brisbane, the cost of getting new solar panels is decreasing, making it more affordable for regular Australians.  

Also, the government in Australia often gives rewards and tax breaks to help you pay less when you install solar panels. These things can make a difference in how much you save with solar energy and help you pay off your solar panels faster. 

Solar Emporium is here to help you choose the best solar power solution for your family, your budget, and what you want to achieve. We’ll make sure you get the most savings possible.

Low Energy Bills:

Once you have new solar panels on your house, you can start paying way less for your electricity bills. Solar power systems use energy from the sun to run your home so that you won’t need as much energy from regular sources.  

By getting solar panels, you also protect yourself from the ups and downs of the energy market’s prices. Where the sun shines a lot, you can take advantage of all that sunlight to save even more on solar energy. 

Return On Investment (ROI):

Everybody likes to make smart investments, and solar panels are good to consider. Calculating the ROI is simple. You think about how much you spend upfront, how much you save on electricity bills over time, and any rewards or discounts from the government.  

For most people, it takes 5 to 10 years for solar panels to pay for themselves. After that, you keep saving money, so it’s a good investment in the long run. 

Environmental Impact

While this comparison focuses on cost, it is critical to consider the ecological benefits of solar power. Solar energy is clean renewable, and emits significantly less greenhouse gas than traditional fossil-fuel-generated electricity. 

Resale Value and Home Equity

solar power

According to the Clean Energy Regulator, one out of every four Australian homes has solar panels on the roof.  

Solar installations can increase property value by up to $6,000 per kilowatt of solar panels installed. In other words, solar panels account for approximately 4% of the home’s value.  

Comparison With Traditional Electricity

Rising Electricity Cost:

In Australia, electricity prices keep increasing. This means households have to pay more and more for electricity, which can be excess on their budgets. But if you get solar panels, you can shield yourself from these rising costs.

Environmental Impact:

Regular energy sources, such as coal and natural gas, have hidden costs for the environment. They produce greenhouse gases, which harm the environment and cause more economic problems.  

Solar energy, though, is clean and good for the environment. It helps cut down on your carbon footprint and makes the planet healthier.  

Traditional Electricity Cost

A typical family uses about 15 kilowatt-hours (kWh) of electricity on regular weekdays. On weekends, this goes up to around 20 kWh per day.  

If a family buys electricity at a fixed rate of $0.288 per kWh, their yearly electricity bill will be about $1,726.  

If we assume that electricity rates increase by 2% each year and the family’s usage stays the same, they will spend about $18,919 on electricity over ten years.

Cost of Electricity With Solar Power:

Let’s say you install a rooftop solar panel system that can produce 6 kilowatt-hours (kWh) of electricity. The cost for this setup would be $6,360.  

Throughout the year, this system generates about 10,895 kWh of electricity. By adding solar power, the household’s yearly electricity bill goes down by 54%, dropping from $1,726.00 to $802.00.  

This happens because the solar panels make household electricity, and any extra electricity can be sold back to the electric company for a special rate. 

When you compare this to a home with solar over the same ten years, the total electricity costs drop from $18,919.00 to $9,133.00. Also, the average price for each kWh of electricity decreases from $0.315 to $0.25.  

Cost of Electricity with Solar and Solar Batteries/Battery Storage

Let’s say you’ve installed a solar battery system along with 6 kilowatts of solar panels facing north and a battery that can store 7 kilowatt-hours of energy. Everything else stays the same. 

With the battery storage, the amount of electricity you need to buy from the grid goes down a lot. This lowers your electricity bill to $297.00 yearly, compared to $802.00 with just solar panels. 

Because you’re storing extra energy instead of selling it back to the electric company, the money you get from selling excess energy (FiT income) drops to $190.00 in the first year. This is less than the $257.00 you’d get with just solar. 

However, by using the stored energy from the battery instead of buying it from the grid in the early evenings, the household saves $572 on its bill. Solar battery systems reduce the total electricity cost over ten years to $1,937.  

That’s much less than the $18,919 for no solar or the $9,133 for just rooftop solar. Plus, the average price for each unit of electricity (kWh) drops from the original $0.315 to $0.23 per kWh. 

Solar energy brings significant cost benefits in the long run compared to traditional electricity.  

Even though you need to invest first, solar panels can lower your electricity bills, earn you money through feed-in tariffs, save you from rising electricity prices, and qualify you for government rewards.  

Plus, solar power helps the environment, which is a big goal for many people. Solar Emporium is here to help you every step of the way.  

We’ll give you expert advice and tailor-made solutions so you can decide wisely and enjoy both the financial savings and eco-friendly advantages of solar power in Australia. 

Get a free solar quote today and enjoy unlimited electricity!  

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