Solar Power is the hottest thing at the moment (no pun intended 😉 ).
Everyone wants it but with the scaling down of government assistance and rebates, not everyone can afford it.
Having solar panels on your roof often has a strong ‘feel good’ factor for people as it reduces their reliance on polluting power plants and genuinely helps the environment.
Saying that, Solar Power has long stopped being a ‘fringe’ trend popular only amongst the so called ‘greenies’.
With the ongoing massive hikes in the price of electricity and with all forecasts indicating this trend to continue for a long time (maybe even for the rest of our lives), using Solar Power has become a very appealing proposition from the simple dollars and sense perspective: you can save money and usually, LOTS of it!
In Australia, we are also very lucky to have an abundance of sunshine in most parts of our Island continent, available almost throughout the entire year.
As a matter of fact, according to research by Geoscience Australia (the government agency which is responsible for advising the federal government on all matters relating to Australia’s geology and geography):
“The Australian continent has the highest solar radiation per square metre of any continent and consequently some of the best solar energy resources in the world.”
Furthermore, according to research by the University of NSW, half of Australia’s existing roof space (so all the existing buildings, both residential and commercial) is suitable for solar power and can actually produce more power than a power station running on coal!
This makes solar power a very feasible option for the vast majority of Australians who are living in a single family home or duplex which they own.
Things get a bit more complicated if you are renting or live in either a unit complex or apartment building (regardless of if you are an owner or renter).
However, even if you fall into the second group, there have been several developments in recent years which may put solar power within your reach as well.
Here is what I am going to cover in this article:
If you are considering getting solar power: what you need to know and how to go about doing that;
If you already have solar power: how to maximise your savings and reduce your ‘payback period’;
If you are renting or living in a unit or apartment: what are the solar power options available to you? and
How something called ‘distributed ledger technology’ can potentially completely change the economics of solar power in the not too distant future and allow you to save money on your electricity bill (and even profit!) without ever installing solar panels yourself.
Ready? Let’s get started 🙂
“I want to get solar power. What do I need to know?”
As I said earlier, if you are living in a single family home (or even a duplex) which you own, then you should definitely seriously consider going solar as you are pretty much guaranteed to save money in the long run.
More and more Aussies are realising that now (regardless of their political views I might add 😉 ) and that’s why 2017 has seen a new record for installations of solar power systems with more than 3.5 million new solar panels installed.
This trend is set to continue this year with January 2018 being the best January ever for solar power installation. The capacity of new solar panels installed in January 2018 was almost 70% higher than what was installed in January 2017.
The very generous government incentives that have been available only a few years ago, have been mostly scaled back as both the federal and state governments have been caught off-guard by the overwhelming public response to them which has caused the allocated budgets to quickly run out.
However, government help is still available, albeit to a lesser extent.
This help comes in the form of either:
Rebates, where the government chips in to fund a portion of the upfront cost of your Solar Power generation system; or
Feed-in Tariffs which are usually administered by state governments and allow you to ‘sell’ excess electricity your Solar Power system generates (and which you do not use at the time) back into the electricity grid.
This means you get credit on your electricity bill for power your system ‘exports’ back into the grid. This credit helps you to further lower your already reduced power bill (since you are now generating some or all of your power instead of buying it from someone else) and basically helps you to recoup over time the investment you have made in the initial purchase of the solar power system.
All these rebates and Feed-in Tariffs are outlined in a single website operated by the Federal Government.
Before I continue though, I strongly recommend you watch this 10 minute video from the ABC’s outstanding consumer affairs show The Checkout which covers most of what you need to know about solar power, all ‘nicely packaged’ with a good dose of humour thrown in (this is this program’s biggest strength in my opinion).
Once you’ve decided you want to go down the Solar Power route, you will need to find a supplier which will supply and install the Solar Power system at your premises.
This can be a daunting and time consuming task as there are literally hundreds of those around, all fighting for your attention.
The best way to address this plethora of suppliers and weed out the good from the dodgy is to use reliable brokers who obtain quotes on your behalf from reputable retailers and installers of Solar Power generation systems.
There are quite a few of those around and the video above mentioned some of them.
The two I’ve used myself and can therefore feel comfortable recommending are Solar Quotes & Solar Market.
There are two reasons why I like these two services:
- They only work with Installers that are accredited by the Clean Energy Council, which is the peak professional association of Australia’s renewable energy industry. This significantly reduces the risk you’ll end up with some shoddy ‘fly by night’ operator.
- They provide you with all inclusive quotes from Installers in your local area. This means you know that if you choose one of them, they can service your area and you also know upfront how much it will cost you. There are no surprises which is something that is very important to me (and I’m sure to you too 🙂 ).
Like most other brokers in this space, it is completely free for you to use their services.
You are also under no obligation whatsoever to make a purchase.
The brokers make their money by collecting a referral fee from the installers they work with.
While these fees make no difference to the price you pay (compared to if you went to the same installer directly for example), it is also worth keeping in mind that most of these services also won’t provide you a quote from an installer who is not on ‘their books’ so to speak and who pays them a referral fee.
Solar Quotes’s founder Finn Peacock is one of Australia’s leading experts when it comes to educating consumers on choosing the right solar power system for their needs.
The video below is an example of the sort of educational videos Finn has been producing for several years now.
I find those videos very useful because they manage to explain quite complex technical aspects of solar power and solar power systems in layman’s terms:
As far as Solar Market, here is a short promo video (i.e ad) which explain how their service works:
Given you are under no obligation to take up any of the quotes you receive, you are welcome to do your own comparisons and try and find someone who can beat the best price you were quoted by the two brokers above or any other broker you find.
At this point you may say:
“Ok, I have checked the rebates and assistance available to me and the prices I can get through various brokers and installers but the upfront cost of getting Solar Power is still too much!
I can’t afford to be that much out of pocket but am still keen to get Solar Power. Is there another option?”
And the answer is: Yes, there is but there will obviously be some ‘catches’ to be aware of.
Other than regular finance (i.e. borrowing the money to buy and install the solar power system) which can be obtained from solar installers, financiers specialising in loans for solar power systems (often called “solar loans”) and traditional banks, there are also two other options that are unique to solar power:
Similar to car and equipment leases, leasing of solar power systems is essentially a ‘rent to own’ scheme.
The way it works is that you get your solar power system installed at no upfront cost and instead pay for it in set monthly repayments over an agreed period of time.
These monthly repayments are fixed for the duration of the lease and do not change if interest rates change.
During the time you make your repayments, the installer is responsible for the maintenance and upkeep of the system and you don’t have to pay anything extra if something breaks down and needs fixing or replacing.
With some lease agreements, you own your solar power system free and clear at the end of your lease term while in others, there will be a ‘residual’ to pay before ownership is transferred to you.
Power Purchase Agreements (or PPAs as they are commonly known)
Here is how a PPA works:
- You get a solar power system installed at your premises at no upfront cost to you.
- The installer (either an electricity company or a dedicated PPA provider) is responsible for all the maintenance and upkeep of the system for its entire lifetime. You pay nothing for that.
- You pay for the electricity the solar power system is generating but at a reduced rate (cents per Kwh) than what is currently available if you were to simply buy electricity from the grid as you do now. Also, your rate will be fixed for the duration of the PPA so if retail electricity prices go up, your discount effectively gets bigger.
- You also commit to buy a minimum amount of Kwh units every month, regardless of your actual usage. This means that in months in which you’ve used less Kwh (because you were away on holidays for example), you would still have to pay as if you’ve used the minimum amount of Kwh you’ve agreed to in the PPA.
Once the term of the PPA ends, you usually have three options:
- Renew the PPA at a reduced rate (so your price per Kwh will be even lower than in the current PPA).
- Pay a ‘residual’ payment in order to take ownership of the solar power system (similar to solar leasing as discussed above). As you become the owner, all maintenance and upkeep costs will be your responsibility.
- Have the solar power system removed by its owner and taken away. This is usually done at no cost to you but in some PPAs, you will also have to pay part of the removal expenses.
If you are considering either of these options, Choice has a great guide to help you with that.
If you happen to live in South Australia, this is a very interesting scheme currently in the works there between the local state government and Elon Musk’s Tesla Corporation.
Finally, make sure to also check this solar panels buying guide to help you understand the different technologies that are available and how to choose the right panels for you.
“I already have a solar power system. How can I make the most of it?”
If you already have a solar power system installed then you now have one clear goal:
Reduce as much as possible (and ideally eliminate altogether) the amount of money you pay your electricity retailer.
As you are no doubt aware, even with a solar power system, you still often have to buy power from the electricity grid.
This is either because your system isn’t big enough to generate enough electricity to meet all your household needs or because it doesn’t generate any power at night (and usually because of both of these reasons).
One way to address this discrepancy is to reduce your electricity consumption (you can find a few suggestions here) and minimise the use of power hungry appliances (like your dryer or dishwasher) at night, which is when you have to pay for every single Kwh unit you use (as the sun is not shining).
However, I’m sure that this doesn’t sound very appealing to you as you didn’t spend thousands of your ‘hard earned’ in order to sit in the dark with candles, right? 😉
In order to achieve your goal of significantly reducing your electricity bill (or eliminating it altogether), you’d want to explore other options.
There are two main options available to you to help you achieve your goal. One of them doesn’t involve spending any extra money while the other unfortunately does require an additional investment.
These two options are:
Maximise your feed-in tariff; and
Storing any unused electricity your solar power system generates for later use.
Let’s start with the one that doesn’t involve you spending any more money, shall we? 🙂
Maximise the feed-in tariff
With this approach you don’t have to cough up any more money and it has two components:
- Getting the most for every unit of Kwh your solar panels generate and which you don’t use yourself. These Kwh units end up getting ‘exported’ to the electricity grid via your existing utility connection. This is what a “feed-in tariff” is.
- Getting the absolute cheapest price possible for every Kwh unit you end up buying from the electricity company (either because your solar power system didn’t generate enough electricity or because it’s night or a cloudy day). This is known as ‘importing’ power from the grid.
As far as getting the most money for every unit of Kwh you ‘export’ to the grid, we have a separate guide which should help you with that.
As far getting the cheapest price for electricity you ‘import’ from the grid, this video should hopefully be useful.
It’s a lesson I gave to a group of students at a local high school on the gold coast on how electricity is priced and how you should go about finding the absolute cheapest price in your local area.
Get a power storage system
As you can probably guess, this does unfortunately involve spending even more money (above and beyond what you already paid for your solar power system itself).
However, on the flip side, it also means you can further bring down your electricity bill significantly and even become entirely self sufficient when it comes to electricity.
This means you may not have to deal with a power company ever again and even get your house disconnected from the power grid altogether.
Doesn’t sound so bad now, does it? 😉
The gist of this approach involves installing a battery system which stores any electricity your solar power system generates and doesn’t get used straightaway.
This means that on a sunny day when your solar power system works at full capacity but there is no one home to use the electricity it generates, this battery system stores this electricity to be used later (for example in the evening when everyone is back home) instead of that electricity getting ‘exported’ to the grid or being lost altogether.
The Powerwall is quite an impressive piece of technological innovation.
It is unfortunately also one of the most expensive and getting one installed might actually end up costing you more than what you paid for the solar power system itself (although prices have definitely come down a fair bit already).
“So is it worth coughing up for a Powerwall system?”
That’s a great question but unfortunately one that is very hard to answer.
Whether the answer is yes or no will depend largely on:
- Where you are in Australia?
- What generation capacity does your existing solar power system have (and whether it is even big enough to meet all your electricity usage needs)?
- How long are you willing to wait to recoup the cost of that additional investment?
- How long do you plan to stay in your current home?
- Can you pay cash for this system or will you have to get finance and borrow the amount (either partially or in full)?
These are just some of the questions you’ll need to ask yourself before jumping head first. For most people, getting a Powerwall is a significant financial investment.
Only you know your personal circumstances and whether the numbers stack up for you but to help you decide, here is a case study prepared by consumer advocacy group Choice in which they visit the first ever family in Australia to get the Tesla Powerwall and share their experience with it after the first 12 months.
Here are a few more videos which I thought are relevant and should help you with your decision:
Finally, here is a review of the most recent model of the Tesla Powerwall (the Powerwall 2) by an actual customer who bought it.
“I’m renting/I’m living in a unit. Do I have any options to go solar?”
While your options are a lot more limited than an owner who lives in a single family home, there are now options that are starting to emerge for you as well.
Admittedly though, a lot of these companies are still in their infancy and with some, their product is not even quite ready yet.
However, if you are either a tenant or an owner of a unit or an apartment, the following companies are definitely worth keeping an eye on.
Matter have created a scheme which makes it worthwhile for landlords to install solar power while offering the tenants a way to purchase the electricity the system generates at a price which is 20% cheaper than the cheapest electricity retail plan available in their area.
Basically, it’s a win-win proposition for both landlords and their tenants:
Tenants get cheaper electricity prices as well as useful insights on how they use electricity which should help them lower their usage.
Landlords have another way of making money from their investment property other than collecting rent.
Here is a short promo video from Matter introducing this concept.
And here is another video explaining how the scheme works from the perspective of the tenants.
You can also read a more detailed explanation (as well as answers to Frequently Asked Questions) here.
Albert Einstein has famously been quoted saying “you need to make everything as simple as possible, but not simpler”.
I think the product offered by Matter follows Einstein’s rule to a tee! 🙂
Allume’s solution targets specifically those who live in apartment buildings and multi-unit developments.
They work almost the same way as Matter but are optimised specifically for apartment buildings and unit developments.
The ‘gist’of it is that they install their solar power system (which is optimised for multi-unit developments and especially apartment buildings), as well as monitoring and metering technology.
This is done at their expense and at no cost to the owners, tenants or the body corporate.
The building’s residents (be it owner-occupiers or renters) buy the electricity the system generates at 20%-40% less than what is available from an electricity retailer.
Here is a video of their founder explaining the concept behind their product:
SunTenants was created by Dr Bjorn Sturmberg, a Physicist from the University of Sydney who conducted research into how the efficiency of solar panels can be improved (i.e. how to generate more electricity with smaller panels and with less sun), for which he was awarded funding from the Australian Renewable Energy Agency (ARENA).
The SunTenants solution is a bit different than the previous two in the sense that the property owners are paying for the installation of the solar power system out of their own pocket (and then own it outright) after the tenants agree to enter a binding agreement to pay more in rent.
You may wonder why would the tenants agree to pay extra rent to compensate the owner for their upfront investment and that’s perfectly understandable.
Well, the reason why the tenants agree to pay extra rent is because they are guaranteed to save more on their power bill than what they pay extra in rent.
This means that overall, the tenant is better off (guaranteed!).
If you own an investment property and this sounds interesting, you can find more information here.
This technology could turn the entire electricity market on its head!
You may have heard something being discussed in the media called “blockchain“.
Even if you haven’t heard about Blockchain, you almost certainly heard about Bitcoin.
Many financial experts and everyday people say bitcoin is a ‘bubble’ and even an outright scam. Are they right saying that about Bitcoin?
I have no clue and to be honest, I don’t really care.
What I do think though is that the underlying technology on which Bitcoin runs (i.e Blockchain) is revolutionary and has the potential to change many aspects of our lives (including how we source our electricity) in the not too distant future.
Many people think that Bitcoin and Blockchain are the same thing but that’s not true!
Bitcoin is just one of the applications using Blockchain technology. It’s kinda like email is one of the applications of the Internet (others being things like video streaming, chat and social media).
Even Blockchain itself is a subset of a bigger group of technologies known as “Distributed Ledger Technology” (or DLT for short). Basically, Blockchain is just one type of DLT.
The underlying technical principles upon which Blockchain and other DLTs run are quite complex to understand if you are not a technical person.
However, their complexity doesn’t mean that people won’t use them. After all, you use a lot of things in your daily lives which you have no idea how they work, right? 😉
The most powerful part of DLT is behind the letter D = Distributed.
DLTs like Blockchain (remember that Bitcoin is just one of the Blockchains out there) allow people and computers to conduct digital transactions on a large scale without any central authority or server while essentially eliminating any chance of fraud.
Because of the secure and fraud-resistant nature of DLTs, they are also sometimes referred to as “trust-less networks” because the people (and machines) who transact on these networks don’t have to trust some central authority, or even each other, in order to do business. The security and fraud prevention are built into the way this technology works.
“Sweet but what does that have to do with Solar Power?”
Well, one of the things you can do with Blockchain (as well as other types of DLTs) is run what’s called “Smart Contracts” on it.
Like everything to do with Blockchain and DLT, Smart contracts are quite a complex concept and are not easy to explain in ‘layman terms’.
However, in very simple terms, Smart Contracts are computer programs which automatically enforce certain rules (e.g “if X happens, do Y”).
These smart contracts run on several blockchains (of which Ethereum is probably the most established and widely used at the moment) and there are two main differences between these ‘smart contracts’ and other computer programs:
- They don’t run on a single computer or server (or even a group of servers). Instead they run on the blockchain itself which means that any computer which is running this blockchain (sometimes called a ‘node’) has an exact copy of this computer program and all these copies are always in perfect sync with each other.
- Once a ‘smart contract’ is activated, it can never be changed! This means that the rules it is enforcing can never be modified, even by the programmers who originally wrote them.
One of the things you can do with these ‘smart contracts’ is buy and sell electricity directly between parties without having to go through an electricity retailer.
Confused? Hopefully, the examples below of two startups which are trying to make this a reality will help you better understand how this can work in ‘real life’.
The first one is a ‘true blue’ homegrown Aussie startup who are one of the absolute pioneers in this space globally!
The explainer video above from PowerLedger is really good in my opinion and really does a good job at explaining in layman terms what they are all about.
However, if you feel a bit lost, the ‘gist’ of what Power Ledger are trying to do is to use blockchain smart contracts to allow people with solar power systems to sell any excess electricity these systems generate to others (who don’t have or can’t get solar power systems).
Currently, if you have a solar power system which generates more electricity than you can use at that particular moment in time, you only have three options:
- ‘Export’ it to the grid and get paid a set feed-in tariff which is determined either by the government or your electricity retailer;
- Store it to be used later using a battery storage system like the PowerWall; or
- Do nothing and let this electricity simply go to waste.
Power Ledger aims to add a fourth option and that is: sell the excess electricity to others.
This creates a win-win scenario for both the seller and the buyer of electricity:
The seller gets paid more for the excess capacity of their system than what they would have been paid via the feed-in tariff and also don’t have to spend extra money buying battery storage systems which are still quite expensive.
The buyer gets to buy electricity for cheaper prices than what is available through their electricity retailer.
(pretty simple to understand when you put it like that, isn’t it? 😉 )
The news about Power Ledger and their technology have been spreading like wild fire since they introduced the concept. They won several awards and even caught the attention of the Billionaire founder of the Virgin Group of companies, Richard Branson.
They have also already started to implement this technology in the ‘real world’ with projects both in Australia and overseas.
The project in Australia was done with collaboration and funding from the federal government so the government can obviously clearly see this idea has merit.
Here is a news story channel 9 in WA (Power Ledger’s home state) did about them:
And here is a story the ABC did about Power Ledger’s pilot project in WA (the one which received funding from the government):
If you already have a solar power system and wanna make some extra coin off it, Power Ledger may soon be your best option to do just that!
WePower is a startup based out of Lithuania with a global team of experts in energy and blockchain technology.
Their CTO (Chief Technology Officer) was previously the CTO of the operator of the electricity grid in Lithuania’s neighbour Estonia and the one responsible for turning that grid into a ‘smart grid’.
This ‘smart grid’ allows to get a complete and very accurate picture of electricity usage across the country which results in a more reliable electricity supply as well as cheaper prices.
As of the date of this post, this ‘smart grid’ in Estonia is the most advanced and efficient electricity distribution network in the world!
WePower is taking a completely different approach to Power Ledger.
Instead of focusing on enabling people to buy and sell electricity amongst themselves, WePower focuses on making it easier for new renewable energy projects to get finance.
The way this is done is by allowing these projects to pre-sell the electricity their projects generate directly to consumers before the project is even built.
Not only that but because the platform is using blockchain technology and smart contracts, these renewable energy projects can pre-sell their electricity to customers that are not even located in the same country!
Here is a video of their CTO (Chief Technology Officer) trying to explain in simple terms how their solution will work. I reckon he does a pretty good job at that. 🙂
(This is the same guy who built the ‘smart grid’ system for the electricity distribution network in Estonia)
That’s all well and good but why am I mentioning some startup from Lithuania in a post discussing solar power options for Australians?
Well, that’s because:
WePower is coming to Australia and is going to work with EnergyAustralia, one of the biggest electricity retailers in the country, to implement its technology in the Australian market.
WePower determined that Australia is a perfect market for them due to the fact the electricity market here is largely deregulated (which means consumers can choose their electricity retailer) yet electricity prices remain very high.
Also, because the Australian government has stopped most of its funding and grants programs for renewable energy projects built by the private sector, new projects are finding it increasingly hard to secure traditional finance and therefore can’t get their projects off the ground. This is especially the case for small and medium size renewable energy projects.
WePower believes that their solution can offer renewable energy entrepreneurs an alternative way to secure finance and build their projects, which eventually will also lower electricity prices for consumers.
This is the reason the company decided that Australia will be one of the first markets it will enter into and they already have a local team of engineers in Melbourne working on making their electricity finance and trading platform available to Australians.
Blockchain-based Renewable Energy projects are one of the hottest trends in the world right now when it comes to technology and there are quite a few other startups around the world that are creating platforms in this space.
Exciting times ahead! 🙂
Before you go:
Lots more on offer for small business
The Spending Hackers Recommend:
- If you are after a no-contract mobile plan with unlimited calls & text in Australia and lots of data – this is your best option.
- Your BEST options for broadband with lots of data and no contract.
- Smile – Save up to 40% on your dental bill WITHOUT taking private health insurance (or ‘double dip’ if you already have it)!
- Vision Direct – The biggest range of designer eyewear on the planet for the lowest price.
Put us to work for you!
The Spending Hacker Concierge service is where we put our skills and combined decades of experience towards finding the absolute best deal for your individual needs & specific circumstances – full details on this page.
The Spending Hacker Scout service is where we not only find you the absolute best deal for your individual needs & specific circumstances but we also make sure you continue to always be on the best deal. If a better deal becomes available at any point in time, we let you know straight away- full details on this page.