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Can solar panels reduce your energy bills?

Installing solar panels will reduce your reliance on purchasing electricity from the energy grid, enabling you to reduce your overall electricity bill.

Installing rooftop solar panels allows you to power your home with clean energy from the sun.

A recent study by Finder showed an average 6kW solar system, you could save $2,400 annually.

While it’s likely you will still need to pay for some electricity from your energy retailer, reducing your reliance on the grid for your energy needs will generally result in lower electricity bills.

"Having the opportunity to have solar when I did not have the funds to buy it outright has been life saver. I pay less for my finance to pay for the solar and my power bills now that I have solar then I did for my power alone, and soon I'll only be paying for power, less than $50 a month” - Sophie NSW

The amount of money you will save on your electricity bills by installing a solar panel system will depend on a range of factors. To help you maximise your savings, we’ve outlined some of the key things to consider.

1. How much energy you are generating vs consuming

Simply put, you’ll want a solar panel system large enough to cover your household’s energy needs. 

The size of a solar panel system is measured in kilowatts (kW), which reflects the maximum power a system can deliver in perfect conditions. On average, a 1kW solar system will produce between 3.5kWh and 4.4kWh of energy per day, depending on where you live in Australia.

Reviewing your energy bills to get a sense of your daily energy consumption can help steer you in the right direction.

The time of day you use energy also plays an important role (see point 2) and each home is unique, so it’s best to talk to your local solar panel installer to find the right solution for you.

2. Solar panel orientation vs time of use of energy

While north-facing solar panels will generally get the most direct sunlight over the course of a day, it’s also important to consider when you use energy.

Is your household most alive in the morning or the evening? Solar panels facing east and north are great for households that rack up the kilowatts in the first half of the day. Alternatively, if your home is lit up like a Christmas tree in the evenings, facing your solar panels to the north and west may have the most impact on your energy bills.

You can maximise your solar energy usage by using the time delay function on your appliances like your dishwasher and washing machine. By setting the time delay you can load the appliance in the morning and set it to run during the day, when your solar power is generating the most power, view more tips on switching appliances.


3. Set your heating and/ or cooling cycles during the day 

For those cold or really warm nights, coming home to a cosy environment is very tempting. You can time your aircon/ heater to run like your appliances when your solar power is generating the most energy. So you can walk in the door to a nice temperature, without needing to draw so much power from the grid. 

4. Your energy provider

Having an unsuitable energy plan can chew into your savings. Many energy retailers pay feed-in tarrifs for any excess energy that you feed into the electricity grid from your solar system, which can help you reduce your bills further. This appears as a credit on your electricity bill.

Contact your existing energy provider to find out what they offer and compare the amount paid by different retailers using the Australian Government’s Energy Made Easy comparison tool.

5. Installing a solar battery

Solar batteries give you the ability to store any excess energy that you generate from your solar panel system during the day for later use.

Adding a battery to your solar panel system can further reduce your reliance on the grid, in turn reducing your energy bills. Depending on where you live, you may be able to access a government rebate to help offset the cost of installing a battery.

Want more tips?

Check out 4 more tips that may help you reduce your energy bills, or how to optimise your solar panels further. 

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs and, where appropriate, seek professional advice.