How Can Solar Power Reduce Your Electric Bill?

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How Can Solar Power Reduce Your Electric Bill?

Many individuals who are unfamiliar with solar energy are perplexed by feed-in tariffs and where the true advantages of solar electricity lie. So let’s discuss how solar energy can reduce or fix your high electricity bill.

Please remember that these figures are only an example of what solar power is capable of. Since your conditions will most likely differ, we advise calling the Space Solar Team for personalized guidance before choosing a solar power system or getting solar panel installation in Sydney

How does solar system for home work?

Before you consume any grid electricity, solar power is supplied into your house as it is produced and is used first.

Accordingly, every kWh of residential solar energy utilised immediately lowers your energy bill by the amount you would have spent for the electricity otherwise. The main financial advantage of solar power is the reduction in your electricity cost.

Electricity rates differ from home to home, and many homes are now billed, based on the time of use.

Time-of-use billing

If you have time-of-use billing, you may roughly calculate how much money solar power will save you by averaging your peak and shoulder rates. The off-peak tariff doesn’t matter because solar power doesn’t operate at these times (10 pm to 7 am). According to our estimates, solar will typically save you between 25 – 30 cents per kWh.

Flat rate billing

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This is how much solar will cost you less, per kWh used in your house if you pay a flat rate for your electricity. Sydney’s standard tariff ranges from 22 to 28 cents per kWh + GST.

If the solar energy isn’t consumed in the house, it is automatically sent into the grid, and your energy supplier may pay you a feed-in tariff for that. Finding the best bargain is important because the typical feed-in tariff ranges from 6 to 10 cents per kWh.

It becomes immediately clear that saving up to 30 cents per kWh outweighs earning 6 cents per kWh from your feed-in tariff.

How Solar Power Lowers Your Power Bill: An Example of a 10kW Solar System

As an example, Jimmy set up a 10kW solar system on a north-facing roof in Sydney. The setup generates 40kWh of solar electricity daily on average (averaged out across the year, doing more in summer and less in winter).

Despite the fact that Jimmy works throughout the day, he is able to utilise 20kWh of electricity without difficulty. The fridge, freezer, and a few lights are among the solar-powered items that serve as his home’s “base load” and are left on throughout the day. Jimmy also starts the dishwasher and sets the washing machine to start at 1 o’clock when he walks out the door. During the summer, the solar-powered pool pump operates automatically during the day.

Jimmy pays his electricity at a flat rate of 30 cents per kWh, including GST. This means that on a daily basis, Jimmy saves $6 on his energy costs (20kWh x 30 cents). Given that he only utilises 50% of the solar energy produced, this works out to about $550 during a standard 91-day quarter.

It’s important to notice that the cost is just cheaper; this reduction is not shown on the bill.

For example, if Tom usually pays $800 every three months, the new cost will be $250.

The remaining 20 kWh are paid as credit and are not utilised in the house.

This is an illustration of how purchasing an “oversized solar system” may have a significant effect on your electricity cost. It involves actively controlling your energy usage to make sure the majority of your usage happens during the day. If you have time-of-use billing, it is also much more efficient because any electricity you consume at night is far less expensive because it is during the off-peak billing period.

Want to know more about how solar systems in Newcastle can help you reduce electricity bills? Visit our website today at for more information or talk to one of our experts about residential solar, by calling 1300 713 998.