How long will it take for a solar power system to pay for itself?

The payback period of a solar power system varies widely depending on the price paid, the size of the system, the usage patterns of the consumer and the price received as a feed in tariff.

For homes that use small amounts of electricity and receive the premium feed in tariff, the payback period can be less than 3 years.

For homes that use a lot of electricity and are not eligible for the premium feedin tariff, the payback period will be closer to 7 years. 

Disclaimer this is an estimation for a payback to be worked out as per when the client is home and using the electricity 

How much electricity will I generate?

The amount of electricity that you generate depends on the size of your system, which way it is facing, whether there is any shading from trees or other buildings and the local climatic conditions. In Melbourne a typical average generation is up to 3.7 kWh per day for a 1 kW system (up to 5.5 kWh per day for a 1.5 kW system). In winter months the average daily generation is typically less than 3 kWh and in summer months it is typically greater than 5 kWh for a 1 kW system. For comparison, the average household uses up to 18 kWh daily, but an energy efficient house can use much less.

Will I generate enough to sell power back to the grid?

In most cases there will be times that the solar PV system is generating more power than your house is using. At these times you will be selling power back to the grid. If your house has very high continuous electricity use (for example through running multiple fridges or having a number of people home at all times) then you may not export much electricity back to the grid. Regardless of the amount of electricity you are able to export back to the grid, your solar power system will reduce the amount of power you need to buy from the grid. Be wary of claims that you will never need to pay a bill again or can eliminate your electricity bills. Most customers are installing systems in the 1.5 to 2 kW range, and these are unlikely to be large enough to negate your electricity bill.

When I get solar power do I have to enter a new contract with my electricity retailer for the electricity I buy?

Not necessarily. You will need to enter into a new contract to sell your excess electricity, but the electricity you buy might be under the same contract as previously or your retailer may require you to enter into a new contract. You should discuss this issue with your retailer before committing to solar power.

It’s a good idea to shop around to make sure you get the contract you want.

Will the tariff I pay for electricity change?

Not necessarily, this depends on the retailer. Your usage tariff to buy electricity might be the same as previously, or your retailer may only offer a different tariff. The tariff structure may also change in regard to peak and off peak tariffs. For the majority of people, this may not significantly impact on

their overall annual bill. Whether a customer is better or worse off will depend on their energy use pattern. Some retailers might only offer a flat rate once you have solar power. Others might switch you from a flat tariff to a peak and off-peak tariff. You should discuss this issue with your retailer

before committing to solar power and it is advisable to shop around to make sure you get the tariff structure that you want.

If you currently have a peak and off-peak tariff and use a lot of electricity during off-peak times (such as for dedicated hot water heating, slab heating, air conditioning or pool pumps) it may be better for you to retain this tariff. In this situation if you lose your present tariff, you may be financially worse

off by installing solar power.

Will my electricity bills decrease once I have solar power?

In the vast majority of cases, getting solar power will help reduce your electricity bills through reducing the amount of power you buy from the grid

and through the feed in tariff you receive for excess power you sell to the grid. However in some cases you may be financially better off without solar power. This can occur if your retailer offers a particular tariff structure for solar power that does not suit you. For example, if you currently have peak and off-peak rates, and your retailer only offers a flat rate if you get solar power, you will lose the off-peak rate and may be worse off despite the power your solar system generates. If your retailer wants to move you to a Time Of Use tariff, you could be better or worse off, depending on your

energy use pattern. You should check with your retailer about the tariff they will charge when you have solar power, and whether any existing discounts will continue. It can also be worth shopping around for deals from other retailers that may suit you better.

Will my electricity retailer charge extra administration fees because of my solar power system?

In most cases there should be no extra retailer fees because of a solar power system. You can confirm this by contacting your electricity retailer prior to installing solar panels.

Will I need a new meter and will I have to pay for it?

If you have an older style accumulation (spinning disc) type meter then you will need a new meter to support your PV system. The meter may be called an interval, bi-directional or smart mater. Smart meters are being rolled out across Victoria over several years. You should confirm with your distributor whether a new meter is required at your address, what kind it will be, and what it might

cost. You may be charged for a meter upgrade through the electricity bills that you receive from your retailer. If you have a smart meter and get solar panels later, the meter may require some adjustment.

Who supplies my meter?

Your distributor is responsible for supplying and maintaining your meter and retains ownership of your meter at all times. Any charges for your meter are passed on to you through your retailer.

How long will it take for a new meter to be installed?

In most cases your new meter will be installed within a few weeks of the solar power system being installed. This time is required for paperwork regarding your installation to be passed to your distributor for review and for your distributor to

arrange a service crew to visit your house and carry out the meter change. If there is a long delay in installing the new meter you should contact your solar panel supplier and your distributor.

If I get solar power, do I automatically get a smart meter?

Smart meters are currently being rolled out across Victoria over a number of years. If you do not already have a smart meter and you get solar power installed, your distributor might either bring your house forward in the queue for a smart meter, or they may install a temporary interval meter until your smart meter is installed at a later date. This depends on the way in which the distributor is planning their work to roll out smart meters in your area.

Have there been shortages of meters?

There have been some delays in installation of interval meters.

The roll out of smart meters is being done over a number of years because of the large amount of work required, not because of a shortage of smart meters. Across Victoria, about 2.5 million meters need to be replaced and it is most practical and efficient to spread this workload over several years.

I’m renting. Can I have solar power installed?

You would need the permission of the landlord before installing solar power on a property that you are renting. If there is a body corporate, permission may also need to be sought from the body corporate. You are unlikely to be eligible for the premium feed in tariff because a rental property is generally not considered a primary place of residence. This will reduce the financial benefit from installing solar power. You should also consider how long you are likely to remain in the property as this will also affect the financial benefit you receive from the system (unless you plan to uninstall the system and take it with you when you move).