In 2022 solar power prices have stabilised, and yet bill shock is about to hit homes hard.
At the end of 2021, solar panel prices were increasing every few days as supply could not meet global demand. Prices soared by as much as 30% within a very short period of time. This played havoc with solar installation companies like Sure Solar. As supply chain pricing increased, we watched the margins on projects shrink. It was a very difficult time to navigate.
Thankfully we were able to weather the storm, and continue to hear from our suppliers that panel prices are relatively stable. With this being said, there are still price fluctuations on inverters, batteries, solar mounting systems and the balance of systems costs. However the levelised cost of energy (LCOE) from a solar system lands at around 3c* per kWh over the 20 year life of the system. Compare 3c per kWh to the 40c predicted by energy market analysts at https://wattever.com.au/electricity-bill-shock/.
If you have not heard the news, current grid electricity prices are soaring again. After many years of low cost wholesale electricity, being driven down by renewables, we now see the wholesale futures market trending upward.
Our friends at wattever.com.au wrote “The fossil fuel generators are driving surge pricing for the extra energy needed at key times of the day to avoid blackouts.” and as the cost of coal has rocketed in the first quarter of 2022, as covered in our previous blog post, it is clear that this cost will need to get passed on the end user.
What can you do about the imminent future grid electricity price increase?
There are sites like wattever.com.au and “energy made easy” that can help you navigate the sea of electricity retailers and the multitude of offers.
If you have a smart meter, you will be able to use your own usage data on the government website “energy made easy” by entering your NMI found on your electricity bill, which is unique to your home or business.
If you are in a location where Time Of Use (TOU) is used, you should pay attention to the different rates that are imposed for each block of time. However, in many locations you can also get a fixed rate that averages the cost across peak, off-peak and shoulder periods, as show below. These periods also vary throughout the year as do the seasons and so does our usage. The peak time is extended during summer months, as we turn up the air conditioners to cool ourselves earlier in the day time.
This works well for those home owners with a solar system, as the summertime generation is much better than in winter months with longer daylight hours producing more free electricity behind the meter, and not being drawn in from the grid. In particular having a west facing array will be favourable if you are on a time of use tariff.
- If you have not already got a solar system, then what are you waiting for?
- If you have solar, but need a bigger system, then now could be a good time to inquire with us to see what your options are.
- If you have a big solar system and want to add a battery, then now is a great time to invest into a battery. The return on investment is about to become a whole lot better.
The election is over for another 3 years, and now it is time to be decisive about your home energy and secure a better deal. Make sure you have a chat with Sure Solar and let us help you.
*Out of pocket cost of asset, divided by forecast asset generation over the lifetime of the asset.
see below: 👇
$4,922 / 9,679kWh x 20 years (straight line generation) = 193,596kWh
This sum equals 2.5c per kWh
This 6.63kW solar system cost is an example only and is simple by nature to show how the simple LCOE is calculated.
Other factors play into this number such as solar panel degradation, equipment replacement, any maintenance, solar irradiance based on location etc. Most panels have a 25 year performance warranty and a degradation of around 15% over the 25 years.