The federal government’s prediction in the October 2022 budget that electricity prices will rise by 56% in the next two years has sent shockwaves through most Australian households.
How much more will Australians be paying for gas and electricity?
The average Australian household paid $1,434 for electricity last financial year, according to the ACCC, and this is expected to rise by $803 by June 2024. Gas price hikes of 40 per cent are also predicted for the same period, increasing the average household gas bill in Victoria from $1,600 to over $2,100 a year. By June 2024, the average Aussie household will be paying $1,300 more a year for energy if these predictions prove accurate.
What can you do about it?
Whilst the causes of spiralling energy price inflation are well documented – the Russia-Ukraine war, escalating wholesale electricity prices, failing coal generators and the billion-dollar sums required to upgrade the national electricity grid – the important question is: what can you do about it?
The answer is to install a big enough solar panel system to reduce your household’s use of grid electricity to the absolute minimum, add a solar battery and – while you’re at it – get off gas and make your home all-electric.
Even bigger savings with solar
For a large dual-fuel family home using an average 36 kilowatt-hours of electricity a day, taking these steps could save you an astounding $7,225 a year by 2024, if these price increases come into effect.
Does this figure sound incredible? Well, in this blog we explain how much you can save with solar panels – and how much more you can save by adding a solar battery. Plus, we explain all the assumptions so you can work it out for yourself!
On this blog:
- How much could I save with a 10kW solar panel system in Melbourne?
- How much more could I save if I added a solar battery?
- What about saving on gas?
- What would a 10kW solar system cost in Melbourne. And what’s the payback?
How much could I save with a 10kW solar panel system in Melbourne?
Right now, you could save around $1,984 a year with a 10kW solar panel system in Melbourne. And, by June 2024, these savings could increase to $2,904 if the predicted 56% electricity price increase comes into effect.
These savings are based on the following assumptions:
- Your 10kW solar panel system generates an average 36kWh a day
- You use 50% of your solar electricity in your home (i.e., 18kWh a day) and export the rest the grid in return for a feed-in tariff of 5.2c/kWh. This feed-in tariff stays the same through to June 2024.
- You currently pay 25c/kWh for electricity from the grid
- Grid electricity increases to 39c/kWh by June 2024
How much more could I save if I added a solar battery?
Currently, the savings from a 10kW solar panel system plus 10kWh solar battery are around $3,285 a year. These savings could rise to $5,125 if the predicted 56% electricity price rise comes into effect.
These savings are based on the following assumptions:
- Your 10kW solar panel system generates an average 36kWh a day
- You use 100% of your solar electricity in your home (i.e., 36kWh a day) due to the addition of a correctly sized solar battery
- You currently pay 25c/kWh for electricity from the grid
- Grid electricity increases to 39c/kWh by June 2024
What about saving on gas?
The only way to save on gas is to use less – or ditch it entirely.
Switching your gas appliances to energy-efficient electric appliances can save you thousands of dollars a year. What’s more, there are generous government rebates available to help you with the upfront costs. For example, there are hot water rebates that can reduce the purchase cost of a hot water heat pump system by $1,500 or more.
Given that the average gas bill for Victorian households is forecast to rise to around $2,100 a year, the savings from quitting gas and going all-electric, powered by solar, are compelling.
How much would a 10kW cost in Melbourne. And what’s the payback?
The cost of a quality 10kW solar panel system after federal and Victorian government rebates is around $11,600 in Melbourne assuming that the installation is standard. If electricity prices rise by 56%, the payback period will be just under 4 years assuming that 50% of the solar electricity generated is used in the home and the rest is exported to the grid.
The cost of a quality 10kW solar panel system plus 10kWh battery in Melbourne is around $20,850 after applicable federal and state government rebates. With estimated bill savings of around $5,125 based on an electricity price rise of 56 per cent, the payback is projected to be just over 4 years.
| Price after STCs & Solar Vic rebate | Estimated savings | Payback period | Savings assumption | |
|---|---|---|---|---|
| 10kW solar panel system | $11,600 | $2,904 | 3.9 years | 50% solar electricity used in the home. |
| 10kW solar panel system + 10kWh battery | $20,850 | $5,125 | 4.1 years | 100% solar electricity used in the home. |
Note: prices are approximate and as of October 2022. Prices and rebates can change without notice. Eligibility criteria for rebates applies.
What’s clear from these calculations is that the higher electricity prices rise, the quicker the payback on solar power systems. It is also clear that a solar panel-plus-battery system is becoming an increasingly viable option with a payback on a par with a solar-panels-only system.
However, systems of this size cost a lot of money, even with rebates. Because of that, many of our customers are purchasing large solar-plus-battery systems using low-interest finance. Assuming the system is sized correctly, they are generally better off from day 1 with monthly bill savings from solar exceeding their monthly repayments. Plus, they get the peace of mind knowing that they’ve insulated their household budget from surging increases in power prices.
Request a quote
Installing a solar power system is the best way to protect your household from spiralling energy costs. Take action to reduce your electricity bills and request a quote from the solar experts at Specialized Solar & Electrical. We can advise you on the best size solar energy system to minimize your exposure to energy price inflation and benefit from guaranteed low electricity bills for years to come.
