How to Convert a Home To Solar in Australia

Introduction

Household energy consumption is responsible for a significant amount of environmental impact. By increasing the number of households that run on renewable energy, this environmental impact can be greatly reduced. Australians want to go green but don’t want to pay more for it ⁽¹⁾. If people are shown a viable and simple way to convert their homes to renewable energy, there is a high probability that they will do so.

The aim of this report is to answer the question: at the present time, is it viable to convert your home to run on solar photovoltaic (PV) energy? Furthermore, this report aims to outline a process that you can follow for converting your home to solar.

In order to achieve the above aims, this report considers factors including: household energy use, system costs, installation requirements, system providers, rebates, feed-in tariffs, energy saving practices and energy plans. The information has been arranged in a way that will allow you to decide if it is viable for you to convert your home to solar.

How Much Energy Do I Use?

By finding out how much energy you currently use, you will be able to choose a suitable PV system that caters to your needs. To find out how much energy you use, see the front page of your electricity bill for the last three months.

An energy-efficient home is defined as consuming 7.5 kWh per day or less ⁽²⁾. The national average is 16kWh per day and it would require a 3.5 kW system to provide 100% of this energy consumption ⁽³⁾. A grid connected PV system of this calibre costs between $27,000 and $30,000. For most people, this outlay is far beyond their financial capacity. Therefore, a more suitable option would be a 1kW system, which generates approx 5kWh per day and costs between $4000 and $7000 ⁽⁴⁾.

In light of the above, a viable plan may be to cover a portion of your energy needs with solar power and at the same time use energy saving practices to lower your energy consumption in the home. Such practices may include using energy efficient appliances, turning off appliances when not in use etc. There are many ways to save energy in the home and this information is easily obtained by performing an Internet search or exploring the Solar Power Authority site.

How Much Roof Space Do I Have?

Once you have decided on a PV system that suits your budget and energy needs, check that you have enough spare roof space for panel installation. Ideally, this roof space should have a North aspect. The size of the system may vary depending on the manufacturer and type of panel but as a general guide, each kW of standard solar panels requires approximately 8sqm of roof space ⁽³⁾.

Provide your findings, along with some site photos, to your provider when you contact them for a formal quote. If necessary, the provider may arrange a site inspection prior to installation. If you do not have suitable roof space, ask your provider if they can provide you with alternative options. Most providers are very willing and able to cater to each individual situation.

Finding Providers and Obtaining Quotes

There are a number of BCSE accredited solar system providers around Australia. They can be found online ⁽⁵⁾, in the Yellow Pages and increasingly in newspapers. Whilst shopping for the best price, be sure to find a provider that has good service. Do they explain things in a way that is easy to understand? Do they cater to your specific situation? What is their warranty? What maintenance contracts do they offer? Will they help you apply for government rebates? Will they match or beat the prices of other providers? All of these questions should be considered when choosing a provider.

Additional Costs

There is an additional charge by ETSA Utilities of between $350 and $421 for fitting of a new single phase PV import/export meter. This will be charged direct to you by ETSA Utilities ⁽⁶⁾. Also note that solar installation costs may vary due to installation requirements and your location.

Australian Government Rebates

All system costs mentioned thus far include the maximum Australian Government rebate of $8000, under the Solar Homes and Communities Plan (SHCP). Therefore, it is important to make sure you are eligible for this rebate. Some important requirements are listed below.

System installer must be BCSE accredited
System must be connected to a main grid or be very close to a main grid.
Maximum $8000 rebate is for a complete system of 1kW or larger.
System must be installed at the applicant’s principle place of residence and there can be only one rebate per residence.
Must not have previously received a rebate for a photovoltaic system from the Australian Government
Applicant’s household taxable income must be less than $100,000.

The above list is not complete. There are other requirements, some of which relate to technical design and installation. Full details of requirements can be found in the SHCP Guidelines ⁽⁷⁾. If you are going through an accredited company, they will ensure you meet the requirements and assist you with the application process. You will need to file an SHCP Residential Application for Pre-Approval ⁽⁸⁾.

Note that the SHCP rebate is capped at a 1kW system, so as the system size increases above 1kW the rebate does not increase above $8000. This is another reason for choosing a 1kW system, as it attracts the maximum rebate for minimum financial outlay. Smaller rebates can be obtained for systems of at least 450W.

The SHCP will conclude at the end of the 2009-2010 financial year ⁽⁹⁾. Therefore, if you wish to take advantage of this rebate, you should aim to do so as soon as possible. If you live in a remote area, you should apply for the Renewable Remote Power Generation Program (RRPGP) rebate instead of the SHCP rebate ⁽¹⁰⁾.

Renewable Energy Certificate (REC) Rebates

In addition to the HSCP rebate, you can also get Renewable Energy Certificates (RECs) for the greenhouse gases you will be abating over a deeming period of 15 years. RECs have a monetary value but the price varies from day to day. Providers are often prepared to buy these from you in the form of an up-front discount, usually worth some hundreds of dollars ⁽¹¹⁾. RECs are currently around $500 per kW of solar panels installed ⁽⁴⁾.

Feed-In Tariffs

On the 1st of July 2008, new laws will come into effect in South Australia and Queensland, whereby households and small electricity consumers will be rewarded for generating more energy than they use and feeding the excess back to the grid. These new laws, set to be in place for at least 20 years, will guarantee a feed-in tariff of $0.44 per kWh fed back to the grid – around three times the current general domestic use tariff of $0.15 per kWh ⁽¹²⁾ ⁽¹³⁾. In 2009, Victoria will introduce a feed-in tariff of $0.60 and the scheme will run for 15 years. Other Australian states currently have limited schemes or are considering the implementation of a scheme ⁽¹⁴⁾. If you live in a state where there is no feed-in tariff, you can check with available electricity retailers as to whether they will buy back any electricity your system generates (and on what terms). If they do, then you will need to check for any fees and the price you will be paid ⁽¹¹⁾.

How it works: the output of the photovoltaic (PV) system is connected to the household loads which in turn are connected to the grid via a bi-directional or ‘import/export meter’. When the output of the PV system exceeds the household loads, the excess electricity is fed into the grid via the ‘export’ register of the meter. The meter records the ‘net export’ rather than the ‘gross production’ of the PV system i.e. gross production – household load = net export ⁽¹⁵⁾.

Import/export calculations are instantaneous. Thus, even if your system does not produce more energy than you use for the day, you can still export energy at certain times. For example, if you were not home during the day and little energy was being consumed in your home during this time (e.g. fridge only), your PV system would be producing more energy than the household load. The excess would be fed back to the grid for $0.44 per kWh. If you then return home in the evening and your energy consumption increases (e.g. lights, TV, heating/cooling etc.) to an amount above that which your system generates, you would then be importing from the grid and not exporting. Regardless of how much you import, you will still get $0.44 for each kWh that you have exported at any given instant ⁽¹⁶⁾.

Switching Energy Plans

As well as installing solar panels and using energy efficient practices in the home, you may also be able to change to a cheaper energy plan to further reduce your energy costs. There is a website called “uSwitch” that allows you to compare the cost of available energy plans and see how green they are ⁽¹⁷⁾. Any savings could be put towards your solar energy system.

Is It Worth It?

With an average energy consumption of 16kWh per day and an energy cost of $0.15 per kWh, your annual energy bill would be $876. By investing approx $5000, you could install a 1kW system with an output of approx 5kWh per day and this would provide around one third of your energy needs, thus reducing your annual energy bill to $584. With this saving of $292 per annum, it would take approx 17 years to pay off the initial $5000 investment.

However, suppose you were to export 50% of the energy that your PV system generated. In this case, your system would provide around one sixth of your energy needs, thus initially reducing your annual energy bill to $730. You would also get $401.50 (2.5kWh X $0.44 X 365 days) for the energy you fed back to the grid, thus further reducing your annual energy bill to $328.50. With this saving of $547.50 per annum, it would take approx 9 years to pay off the initial $5000 investment. Depending on when you installed your system and the feed-in tariff duration, you could then save up to $6022.50 over the next 11 years.

Note that the above calculations do not take into account the implementation of any other energy saving practices, nor switching to a cheaper energy plan. This is because it could be argued that such savings could be made whether you installed a PV system or not.

Conclusion

With current government subsidies and feed-in schemes, solar is the most viable form of renewable energy for your household. However, solar power may be considered too expensive due to the upfront cost and payoff time. The viability of converting your home to solar will depend on your individual circumstances as per the key considerations outlined in this report. In particular, the more energy you can export back to the grid, the more viable it will be to convert your home to solar.

In order to make solar energy more viable for Australian households, changes must be made to current legislation. Every state should have a minimum feed-in tariff of at least $0.60 per kWh. As is the case in Germany and other countries, the tariff should be calculated on gross production as opposed to net export. As well, investments in the “clean coal” industry should be redirected to increase the maximum HSCP subsidy. Such changes would dramatically shorten the investment payoff time and encourage many more people to use solar energy in their home.

Finally, you may wish to write to your local state member of parliament and request that they take action to pass laws that will make it more viable for you to convert your home to solar and contribute to making Australia a sustainable country ⁽¹⁸⁾.

Reference List

1. The Daily Telegraph – Impose a green tax, study says
news.com.au

2. BP Solar grid connect brochure
bp.com

3. Personal communication from Energy Matters, 19th May 08

4. Energy Matters price list
energymatters.com.au

5. List of BCSE accredited designers and installers
bcse.org.au

6. Personal communication from Solaris, 19th May 08.

7. Australian Government – SHCP Guidelines for Residential Applicants
environment.gov.au

8. Australian Government – SHCP Residential Application for Pre-Approval
environment.gov.au

9. Australian Government – SHCP Questions and Answers
environment.gov.au

10. Australian Government – Renewable Remote Power Generation Program
environment.gov.au

11. Australian Business Council of Sustainable Energy – FAQ
bcse.org.au