A Peril of Going Solar

After discovering the realities of how retailers can gouge solar owners regarding pricing, and seeing a few reviews on the net whereby the net savings by consumers were reported in the very small numbers of dollars per billing cycle, a message is that adding solar may not always be smart for the pocketbook.

The poor payback will be from solar systems that offset but barely or do not cover the household’s ‘prime time’ consumption. If you install a ‘too small’ solar system, as a contrived example consider one that can only produce 2.5 kw per day average generation but the average consumption is 5 kw per day that is mostly during peak hours (0700-2300 M-F in Vic). You will be paying a peak retail rate for solar that could be near double your pre-solar rate, and you will pay from about 2 to 4 times more for consumption than they will pay you for your feed-in. The off peak rates are reduced although still more than your feed-in rate, but can you do all your laundry and dishwasher, run your A/C or heat if you have any and when needed, and do all the electric fuelled cooking off-peak, to make that point?

Simplistically even if you import half as much power from the grid after adding solar, you could pay about the same on your bill unless your system usually supplies ‘all and then some’ of your typical consumption. nb. My new system is generating from more to far more than consumed between 0900-1800 when the panels are doing their best, but 0700-0900 and 1800-2300 can blow the budget.

In Vic there is a max 5KW limit (AC feed-in to the grid) that would be about 17~20 microinverters and panels, or 6.5KW on the roof with a string inverter. PV systems of that scale are currently going for $9-11,000 top quality and $5-7,000 for good quality price-performance systems. Each has its benefits, not for this topic, but if you put in a ‘too small’ system than you need or one affected by lots of shading or ‘bird deposits’ the payback could approach ‘never’. Further, relying on feed-in credits for offsetting the equation, between enough to maxing it out, will be subject to future feed-in tariffs.

Two messages, consider the gouge vs system size and paying the retailers vs payback time; and do retailer comparisons for solar rates and plans (eg Victoria’s government sponsored energy compare) or sign up to Choice Transformer. to do it for you.


In the cases where no one is home during the day and minimal amounts of PV output are being used onsite, the FiT is low and peak rates are being paid in the evenings, then a battery would be worth consideration, allowing a significant portion of PV output to be used in the evenings and overnight.

A bit too contrived, I’m pretty sure no one is selling systems that small :wink:


My ‘data’ that caused my post is from anecdotal reviews of the retailers across a few web sites, where one reviewer claimed their bill was a whole $1 savings. When they contacted their supplier they were reminded of their new and much higher tariffs. No detailed data available and impossible to verfiy the veracity or conditions. My point was making a point, and I trust I made it that blindly buying a too small solar system can be account draining.

Regarding batteries shifting supply is where they come into their own for most of us on-grid types, but the economics remain marginal according to most current reports. Subsidies will change that equation (re the ALP’s promises) and solarquotes suggests 2-3 years they will become cost effective in the general case.

I’ll go a step further and note my shiny new split system got its first test yesterday, and it blew out the equation for the day (although not the week). If it ran many days it would impact the economics, and such power hungry devices for stay-at homes (mums, retirees, night shift workers, whatever) are most useful in the heat of day :wink:

In yesterday’s case, it got overcast mid-morning and deteriorated so it was almost an $8 out-of-pocket day. In contrast, earlier in the week I had a near $0 day :slight_smile:


A little contrived perhaps, however a quote we received earlier in the year from Origin comes close. For a city townhouse Origin sized the system daily average output to match our average annual consumption. 8 panels for 2kW max AC output. With most of the usage in the evenings and a feedin offer of only half the buy in cost of power it did not look all that good. Especially when up to 30% of the bill was the daily connection charge.

This in principle mimics what @PhilT suggests. Too small a PV system will not save significantly on some billing schemes.

The estimated payback in the offer had a big footnote to cover any discrepancy with actual performance/savings.

We have recently committed to a system that is much larger and can provide sufficient surplus under current best feedin tariffs to match the total cost of supply.

Yes it is at risk of a reduction to feedin tariffs, although we can currently lock these in for up to two years. The daily connection charges and cost of purchased power unfortunately are not subject to the same fixed unit rates? As @gordon suggests a battery is a great way to respond if the economics change.


I think now that the cost of PV panels and inverters have come down so much, best payback times are generally achieved with larger than you require sized systems.

The good thing about that is that you are displacing fossil fuel burning, the bad side is that the electricity providers are profiting from your capital expenditure.


The profit for providers goes down if you go offline :slight_smile: Perhaps another reason to consider more panels and batteries just to stick it to the providers, among the other possible positive reasons to go offline.


My 2c (from the sidelines):

My plan was always with a new house build to plan the circuits not by room location, but by circuit load (eg lights only, light load, medium load, heavy load eg oven a/C) then pull the mains breakers on each circuit once it could be sustained by its own separate battery+solar/wind combo, so each circuit becomes off grid once sustainable. Of course that requires the luxury to plan that when building a new house, and requires not telling the energy mob, and doing it yourself.


I should add here that I’m familiar with the technologies involved having done it myself on the current house, albeit on a smaller scale, and would definitely not suggest connecting any DIY setup to circuits still also serviced by mains power.


I entirely agree with BBG. I was winning for a few months, until my rates went up, because I installed solar panels. Only worth buying solar panels when the storage batteries are efficient and more economical. Electricity will never be for free, but if not connected to the grid. it will be a lot cheaper. There will be costs associated with the maintenance of the solar panels + storage batteries, this depends on the electrician charges, but you get rid off the money hungry energy providers.

Not necessarily! If you have a battery and off-grid inverter, along with a suitable charge controller for your panels and battery configuration, you can still take the whole house off the grid, by only using the grid to charge the battery. IE the house is not connected to the grid, apart from one or 2 power points independent of all other house circuits (separate switchboard), to run a battery charger (or input “shore power” in Victron inverter-charger terms), plus any other load too large for your off-grid inverter if it is a bit undersized.


‘Off grid’ could be getting into semantics :wink:

That connection incurs $396 p.a. in connection service fees, state and retailer dependent. Power used under that scenario could be minor in comparison regardless of the tariff, although that non-grid-connected inverter would deliver a comparatively lower non-solar tariff. You win on the left and lose on the right. That being written, Very Clever!


@PhilT we have had our first full month of running our home on PV with a fully working “smart meter”. Our results echo your observations.

With an oversized PV array of 5.5kW (30kWh peak output) to provide for an yearly average of under 10kWh per day, summer is around 12-14kWh average, we are only just in credit for December.

Daily average total solar AC power produced: 22.3kWh
Daily average self consumption: 6.9kWh
Daily average purchased power: 5.7kWh
Daily average exported power: 15.4kWh

With AGL the feedin tariff is 20c while import is 28.05c.
The daily connection charge is the killer at $1.166 which includes 7.7cpd solar metering charge.

The maths suggests for December a daily credit of 31.5c, which is effectively zero bill to pay - just!
If we had purchased a smaller system, say 3.0kW we would have saved approx $2,000 upfront for a worse outcome with a daily cost of approx $1.90 due to the reduction in export (feed in to the grid).

Pay back on the larger 5.5kW system is looking to be 4 years, while the smaller system would need at least 6 years, and you would still need to keep paying bills with the smaller system.

While a battery might give greater independence, it only cost us an extra $2,000 to go up to a large PV system.

For comparison the smaller 3kW PV system option would have needed as a minimum an 8kWh capacity battery to minimise importing power. Certainly a much more expensive option (approx $10,000?) than the extra panels and larger inverter. Feedin benefits from export with a battery installed would be significantly reduced and unlikely to offset the daily connection charge. Add the days where the sun barely shines and it would still leave a significant bill each month/quarter.


Yeah, I’d consider keeping a grid connection just to charge from, for “rainy days/weeks” however that would require a yearly connection fee retainer as TheBBG mentions. I’d rather get comfortably over provisioned slowly and then cut out the grid connection/cost entirely, although I checked out bill and we’re currently only paying ~$340/yr for connection (Hunter Valley, AGL) which makes it perhaps worth keeping.

Unlike many I have no plan to feed back in to offset cost, rather simply to be self sufficient. Of course unlike most I also plan to build solar/battery capacity slowly in multiple separate units, with separate cheap inverters, so no single point of failure


Of course while off grid works in a power outage, I think we’ve had about half an hour of outages in the last 5 years


Going with too many small devices and batteries gives you more potential points of failure too! With Lead-acid batteries the aim is to minimise the number of cells to get your desired storage capacity. Some people rather foolishly use a huge number of parallel 12V car batteries, which maximises the number of cells, and dooming the system to an early demise for various reasons.

Around here the daily connection charge adds up to over $500 per year, but fortunately that’s not something I’ve ever had to pay.

Off-grid inverters are extremely reliable if you go with a recognised brand and stay away from cheap Chinese ebay offerings. I really would go for a large good quality inverter up-front, or at least smaller inverters that can be connected in parallel, such as Victron. Cheap inverters in your scenario are really multiple likely points of failure.

Power was out for 2 days here a couple of weeks ago… although the blackout went unnoticed for me- I checked the Essential Energy web site :slight_smile:


Since @gordon questioned the veracity of my contrived example, consider how your equation would change if, as the case actually might be in Vic, that the FiT is $0.113 but the peak rate (M-F 0700-2300) is $0.429 out of pocket and off peak $0.198 in a region with more than its share of cloudy days. As the clouds pass over the system will import energy; daily production needs to exceed import by near 4X just to break even on usage. In winter what are the odds?

Shopping around for companies happy to have solar customers is as important as system size, and for us on-grid types there is that 5kw export max. So many variables, but the point remains a ‘too small’ system compared to consumption will take longer to payback, and could even be a money loser when the PV investment is considered.

Put in a 1kw export capable system and you will be hit with that huge tariff, just as if you had a 5kw export capable system. The former will import far more than the latter as well as export much less. I hope the issue makes better sense now.


Definitely, there is much to consider concerning the sizing of a PV system. More than perhaps the sales reps for solar PV will pass on.

As you point out the weather patterns (or is that billing patterns) of some parts of the country conspire against the user.

Additionally for our circumstance, being a small user the daily connection charge is much more significant 30% of our annual previous bills. The best feedin tariff we could find until recently was 12c, which would have placed us in the similar situation to @PhilT of needing to export 5 times our import. The extra cost of a larger system or 5kW export limit for many users would have made this an unacceptable option.

One of the observations for us is that with many cloudy days here in summer in SE Qld we still get a reasonable output of PV during the day. But we still see a loss of production intermittently. This must undo the logic of trying to run higher power loads like the washing and dishwasher during the day. Oh! and the clothes drier because it is too humid and dull to line dry.



Problem with the solar thing is two fold while you are on grid.

  1. you need a 5-6.6kw in today’s environment to make any headway, and then it’s not much.

  2. adding battery is a waste of time and pollutes the world while the battery is being manufactured and eventually (10 years) needing replacement.

When the number of households on solar reaches a point where the retailers can’t get much revenue from selling power, they will simply increase the connection fees to meet the shortfall. This will be progressive.

This forces those not on solar to pay ever more extortionate costs - this happened in Qld a few years ago when the feed in was 66c - those not on solar were charged more to cover the cost of the feed in.

Thanks to Jeff Kennett for starting Australia off on extortionate power, gas, and god knows what else that has been privatised and contributes to our cost of living.

We have no limit as far as I can see on how much we feed back to the grid. We are in Victoria with Powershop and for December we fed 359kwh back to the grid and received $41 feed in tariff. this is more than 11 kwh per day. Feedin tariff is 11.5c perkwh

We have 20 panels, 5.5 kw and a 13.5 kw battery. In just over 10 months we have drawn just 13% from the grid in power and received $180 back in feedin. I expect that by the end of the 12 months of having the battery (the panels came first) we will pay less than $200 for the year for supply of power and network charges