What size solar power installation should you buy?

A Solar Choice broker will help you, at no charge, decide what size solar energy installation best suits your needs and budget. In the meantime, we hope the following factors will assist you in making the right decision.

1. Your energy bill

The best place to start is by taking a look at your most recent energy bills. Most energy companies have a graph on the back of your bill which sets out your average daily energy consumption. An energy efficient Australian three bedroom home, with an average sized family and reasonable use of air conditioning, will usually have an average daily consumption of around 12kWh to 16kWh.

Now depending on where you are in Australia and how much day light you receive on average per day, a 1kW solar power system will usually produce around 4kWh to 5kWh of energy per day. So the general rule is that a 3kW solar energy installation will usually be enough to cover all the power needs for an energy efficient average Australian home.

If however you live alone, or maybe are a retired elderly couple, your household energy needs will be significantly less. Usually a 2kW solar power installation will cover most if not all of your energy needs.

But a 1kW solar power system can effectively become a 3kW or 4kW system depending on what feed in tariff is offered by your State or Territory, and how much energy you use (see below).

2. Your eligibility for the $8,000 Federal Government rebate.

The generous $8,000 rebate the Federal government has been offering expires on 30 June 2009, at which time it morphs into a different system wherebye less cash is given back for a more expensive system.

To qualify for the $8,000, you must own the home where the solar power system is to be installed, and it must be your principal place of residence. The rebate is also means tested – your combined household taxable income for the 2007/2008 financial year must be under $100K (ie. after all tax deductions have been taken into account).

The rebate is capped at $8,000 for a 1kW system, ie. even if you install a larger and more expensive system than 1kW you won’t received a larger rebate.

After 1 July 2009, the means test will be abolished, and the highest amount that could be received will be for a 1.5KW solar energy system of approx. $6,500 to $7,000.

3. How a solar energy feed in tariff works to effectively increase the power of your solar energy installation.

A solar power feed in tariff, or reward scheme, gives you financial credit for the energy your solar panels feed back into the main grid.

For example, if you are at work during the day when the sun is shining and with only your fridge running at home, a 1kW solar power system will be feeding more energy into the grid than what you are using. A calculating device installed at your meter keeps a tally every 30mins throughout the day of this surplus energy, and credits your account. Obviously your solar panels don’t work in darkness, so at night there will be no power from your solar energy system going back into the grid. Every three months your energy company looks at the “for and against” tally, and either issues you a bill or – if you are ahead on the tally – a credit to your account for which you can elect to receive a cheque. Wouldn’t that be nice to receive in the mail from your energy company?!

Now, if you live in Victoria, Queensland, South Australia or Alice Springs, your energy company will reward you at a premium rate for this excess energy you are putting back into the grid. This system is called a Net Feed In Tariff. In Victoria the rate is 60c per kWh (roughly four times the market price of electricity), and in Queensland, South Australia and Alice Springs the rate is 44c per kWh (approx three times the price of electricity).

So if you live in these areas and use very little power during daylight hours, a 1kW system effectively becomes a lot more powerful during the day.

The ACT and WA will very soon introduce the most generous feed in tariffs in Australia, so that you are rewarded for all energy your solar panels produce, regardless of how much you consume yourself – ie. the reward is as a Gross Feed In Tariff rather than on a net or surplus basis. Further, the premium rate will be 60c per kwH, approx four times the market rate, thus making a standard 1kW installation even more powerful during daylight hours than if you lived in Victoria, Queensland, South Australia.

NSW will soon announce what type of feed in tariff it will be introducing, and at the moment power from solar energy panels is rewarded at the same market rate as electricty. This also remains the case for Tasmania and the Northern Territory other than Alice Springs.

We hope the above points are helpful to you. Take 30 secs to complete our online request for a quote comparison, or feel free to give your Solar Choice broker a call on 1300 78 72 73 to further discuss what size installation best suits your budget and energy needs. Remember, you don’t have to pay us anything at any stage. If you accept one of the discount quotes we broker for you, then the installer pays us a small commission on the value of the installation.

Angus Gemmell

Solar Choice Pty Ltd

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