Below is the answer to the question: Is it worth installing solar panels for grid-connected houses?
The answer is NO
System Specifications
- Solar Panel Capacity: 6.6 kW
- Inverter Size: 5 kW
- Initial Cost: AUD 7,000
- Export to Grid: Not allowed
- Battery Storage: None
Energy Production
- Average Solar Irradiance in Australia: 1,300 kWh per kW installed per year
- Total Annual Energy Production: 6.6 kW×1,300 kWh/kW/year=8,580 kWh/year6.6 \, \text{kW} \times 1,300 \, \text{kWh/kW/year} = 8,580 \, \text{kWh/year}6.6kW×1,300kWh/kW/year=8,580kWh/year
Household Energy Consumption
- Average Annual Consumption in Australia: 5,840 kWh/year
- Electricity Cost: AUD 0.28 per kWh
- Maintenance Costs: AUD 100 per year
Self-Consumption Ratio
- 30% Self-Consumption: Low daytime energy usage.
- 50% Self-Consumption: Balanced energy usage.
1. Estimating Annual Energy Production
The annual energy production is calculated based on the system size and average solar irradiance in Australia .Annual Energy Production=System Size×Solar Irradiance=6.6 kW×1,300 kWh/kW/year=8,580 kWh/year\text{Annual Energy Production} = \text{System Size} \times \text{Solar Irradiance} = 6.6 \, \text{kW} \times 1,300 \, \text{kWh/kW/year} = 8,580 \, \text{kWh/year}Annual Energy Production=System Size×Solar Irradiance=6.6kW×1,300kWh/kW/year=8,580kWh/year
2. Accounting for Energy Consumption Timing
Since export to the grid is not allowed, all the energy produced by the solar panels must be consumed on-site. However, household energy consumption occurs throughout the day and night, which can lead to some energy being unused. To evaluate the financial impact, two self-consumption scenarios are analyzed:
- 30% Self-Consumption: Limited energy usage during daylight hours, resulting in higher energy wastage.
- 50% Self-Consumption: Balanced energy usage between day and night.
3. Financial Analysis by Self-Consumption Ratio
The financial viability is assessed by calculating the annual savings, net annual savings, and payback period for each self-consumption scenario.
| Self-Consumption Ratio | Self-Consumed Energy (kWh/year) | Annual Savings (AUD/year) | Annual Maintenance (AUD/year) | Net Annual Savings (AUD/year) | Payback Period (years) |
|---|---|---|---|---|---|
| 30% | 2,574 | 720.72 | 100 | 620.72 | 11.28 |
| 50% | 4,290 | 1,201.20 | 100 | 1,101.20 | 6.36 |
a. 30% Self-Consumption Scenario
- Self-Consumed Energy: 2,574 kWh/year
- Annual Savings:
2,574 kWh/year × 0.28 AUD/kWh = 720.72 AUD/year - Net Annual Savings:
720.72 AUD/year – 100 AUD/year = 620.72 AUD/year - Payback Period:
7,000 AUD ÷ 620.72 AUD/year ≈ 11.28 years - Interpretation:
With a low self-consumption ratio, the payback period is over 11 years. While the system still provides net savings, this extended timeframe may be less attractive, particularly for homeowners who might move before recovering the initial investment.
b. 50% Self-Consumption Scenario
- Self-Consumed Energy: 4,290 kWh/year
- Annual Savings:
4,290 kWh/year × 0.28 AUD/kWh = 1,201.20 AUD/year - Net Annual Savings:
1,201.20 AUD/year – 100 AUD/year = 1,101.20 AUD/year - Payback Period:
7,000 AUD ÷ 1,101.20 AUD/year ≈ 6.36 years - Interpretation:
A balanced self-consumption ratio results in a payback period of just over 6 years, with considerable net savings over the system’s lifespan. This scenario is more favorable for homeowners who can shift energy usage to daylight hours.
Conclusion
The decision to invest in a 6.6 kW domestic solar panel system costing AUD 7,000 in Ballarat hinges significantly on the self-consumption ratio. Here’s a quick recap:
- 30% Self-Consumption: Payback in ~11 years with positive net savings.
- 50% Self-Consumption: Payback in ~6 years with substantial net savings.
resources:
CSIRO Typical House Energy Use
AER Residential Energy Consumption Benchmarks
ABS Household Energy Consumption Survey (2012)
Australian Energy Statistics – Department of Industry, Science, Energy and Resources
EnergyHub – Smart Meter Data Insights
Statista – Energy Use Per Household
Solar panels info for Ballarat here