Who isn’t feeling the pinch of rising interest rates and the increasing costs of living? If you’re looking for ways to save money or invest in your future, going solar might be the choice for you. Not only is solar energy a smarter choice for the environment, but it can also provide significant financial benefits in the long run. We show you how to calculate the long-term cost savings, so you can make the most informed decision.
1. Determine your current energy usage
Get to know your energy bill. Because the first step in calculating your cost savings, is to determine your current energy usage. Find out how many kilowatt-hours (kWh) of electricity you’re using each month.
Your bill shows that you used 23.71 kwH of electricity each day (on average). That makes your monthly average 721.2 kWh (where 23.71 kWh per day x 365 days in a year / 12 months in a year).
By understanding your monthly energy usage, you can start to get an idea of how much electricity your solar system will need to generate, to meet your needs.
2. Estimate your future energy usage
Now that you’ve established your current energy usage, it’s time to estimate your future usage. Estimating your future usage will depend on several factors. What’s the size of your home? How many people live there? When and how are you consuming energy? Are any of these variables likely to change in the future? Consider whether your future usage will increase or decrease, based on your current energy usage.
3. Calculate the size of your solar system
Once you have your estimated future energy usage, it’s time to determine the size of the solar system you will need. This will depend on the location, climate and roof aspect of your home.
4. Calculate the cost of your solar system
With all things sized up now, the cost of your solar system will depend on the estimated size, as well as the installation cost. To firm up your estimations, it’s time to get in touch with a solar specialist. A solar specialist will consult with you, design your perfect solar system, and, provide you with a more finalised cost idea.
5. Calculate your savings
Now that you have the cost of your solar system and your estimated future energy usage, you can calculate your savings! Remember to factor in the cost of electricity in your area (from your bill), and any incentives or rebates that you are eligible for. Visit energy.gov.au/rebates to view up-to-date government incentives and eligibility.
To calculate your net savings: Subtract the cost of your solar system from the total amount you would have paid for electricity (over the life of your solar system).
Let’s say you live in the Gold Coast and your monthly electricity bill averages $225. You do not foresee any changes for your future energy usage. So, over the next 15 years, you would pay a total of $40,500 for electricity.
Now, let’s say you purchase a 6kw solar system for $7,000 (after rebates or incentives). This solar system is expected to cover 100% of your energy usage.
$40,500 – $7,000 = $33,500
So, your net savings over a 15-year lifespan would be $33,500!
Bear in mind that this is a very simplified example. Actual savings will vary based on your circumstances. Consult with a solar specialist to determine the potential cost savings for your circumstances.
So, by following these steps, you can get a good idea of the future cost savings when going solar. Bear in mind, that the actual savings will depend on factors we’ve outlined above. Do you research, find a trusted supplier (see our tips here), and get a solar system that is designed to maximise your investment!
Need help calculating?
Call us on 1300 4 SOLAR. We’d be more than happy to help you out!