One of things on my agenda for 2012 is to have a brand new house. I own the home I live in now, but, it's old and I live next door to my parents. It was okay at first, but now it's just annoying - doubly so for Natalie. Imagine having to live next to the parents of your girlfriend or boyfriend. Ugh.
Using that sweet, sweet, legal tender from the sale of MacTalk (which was all completed last week by the way, yeehaw), we purchased a 700sqm block of land in Bacchus Marsh (about 45min from the CBD) where Natalie and I are going to build a nice big, comfortable and new, house. See, this is the block with my Dad gazing away at it:
There is a *lot* of bullshit involved with building a house - it isn't like you can just rock up to an Apple store, pick a house and know it's good because someone like Steve Jobs and Jony Ive made it. You gotta know your shit. So there's going to be a fair bit of house related stuff, because like I said, I'm going to be building a house and that tends to take up a significant chunk of a person's brain, and I use this blog to sound out ideas and thoughts, to see if I understand them properly. Anyways, this is a long-winded setup for the real point of this post, attempting to explain installing solar panels on the roof of your house.
Electricity isn't cheap and it's only going to get more expensive. I'm currently playing 20.2c/kWh (flat-rate) for power and I used 920kWh on the last quarterly bill. 22c/kWh doesn't seem too far off with the carbon tax coming in to play this year and no doubt, over time, power will just cost more, for reasons I don't really comprehend. But those smarter than me seem to think increasing power bills is as sure as a Pope shitting in the woods with a bear looking on, or something.
Enter solar power - magical crystals that turn invisible sun rays into beautiful electron flows, ready to power my massive fucking TV and ginormous air conditioner. And in Australia, we have lots of sun, lots of big TVs and heaps of air conditioners. Our government throws out all sorts of subsidies at it (I heard someone call it middle-class welfare, heh) and well, have you seen pvoutput.org? That shit just looks cool.
As I'm building a new house, I wanted to see if chucking solar panels on at build time makes a difference in the cost. It doesn't make a difference to installation, but if the panels are on the roof and operating before you move in (e.g: during those few weeks where the roof is on the house, but things like the floors, painting, bathrooms, kitchens, etc. are being installed), electricity is being generated, but not really used (just a couple of tradies), so you can sell that back to the power company and earn credits, making your first and maybe second power bills pretty much free. I'll explain how that works in a minute. It does however, make sense to do at build time, as if I can get the builder to set it up, I can include it as part of the construction of the house (ie: on the builder's contract) and the bank will pay for it as part of the loan, rather than me having to find $10,000-$15,000 to pay for the setup after the house is finished or whilst it's being built.
To calculate if solar power is worth it, you need to understand how a solar power setup works. Most of my info is gleaned from three Australian forums - Whirlpool (computer nerds), Home One (suburban mums with hubbies and bubs and whatnot) and Energy Matters (hippies). It's really dense and there's a lot of jargon, but I think I've managed to distill the info down to what's actually useful and recent (lots of it is out of date) stuff. The biggest issue I found was that the people who really understand how this stuff works have such a poor grasp of English, combined with assuming way too much about what people understand about solar power, that their posts on forums make absolutely no sense and confuse the shit out of everyone.
Step one, obviously, are panels on the roof:
There are many brands, but the consensus is that you want panels that are made in China, otherwise you're paying a xenophobe tax. No need to pay the exorbitantly high costs for fancy German made (or Australian made) panels. The Chinese ones are just as good unless you're a racist fuck who yells at Indian call centre operators. You do have to take into consideration that you have limited roof space that faces the sun, so you may have to get the fancier ones in order to meet your power requirements, or it could be cheaper to get say, 20x of the fancy panels than 30x of the cheaper ones to get the same power output. A decent warranty (10-years on parts, 25-years on 80% power efficiency) is a good idea too.
Step two, is an inverter:
Solar panels generate DC power and your house runs on AC power. The inverter takes the DC power the panels generate and turns it into AC power that your appliances (and the power grid you can feed in to) use. This is where you spend the extra money to get something reliable and with a good warranty. Apparently, they do fail, much more than the panels. The brand SMA kept popping up and they have a pretty awesome monitoring/stats system that can hook up to your computer over Bluetooth on almost all their inverters. If I was to buy an inverter, SMA seems the one I'd get.
Step three, installation:
You also need someone to install it. Make sure you get someone off this list from the government. They *should* know what they're doing. It's just like any other trade, like a plumber or electrician - some suck, some are great. They'll also work out how many panels you need, what angle they should point at and where on the roof they should go, along with what size inverter you require. There's also a lot of cabling, rigging, frames and stuff to support the panels, that they'll charge for. Simply, if the installer is on the recommended list, uses non-shitty panels and SMA inverters, and you pick the best quote out of 3 or 4, it's all good.
That's pretty much what you need to know when you've decided, "yes, I want solar panels" - ah, but you still need to decide if it's worth getting solar panels in the first place. Basically, the aim of solar panels is to negate power you suck off the grid (i.e: cheap power from big stinky, baby dolphin killing, coal fired plants in VIC) in order to save money. Disregard any environmental ideals or nerdy power generation stats, I'm just going to focus on money and how it applies in Victoria (different states have different schemes). If you don't understand a thing I write in this post or don't read it all, just keep this in mind: the way you save money with solar panels is via two methods - buying less power from the power company and selling power you don't use to the power company (called a feed-in-tariff), so your electricity bill is lower or even $0.
The government wants to (or at least, wanted to - the Liberal govt in VIC slashed the FiT by over 50%) give incentives for people to install solar panels. Solar power generation reduces power load on the grid, so building expensive power stations can be delayed, they create jobs for people installing them and you get some greenwashing PR/karma. There's things called RECs and solar credits and all this crap, that make buying the gear cheaper, but you don't need to worry about that. The installer will claim all that for you and take it off the price of installation. So all you need to consider is the FiT. It makes a big difference as to how long it takes you to pay back the cost of installing the panels and getting to the stage where you're generating free electricity.
The FiT is credit the power company puts on your bill for power you generate, but don't use and is fed back to the grid. So for example, it's 1PM and really sunny, but nobody is home, so there's minimal power usage in your house. The solar panels on your roof are making fat stacks of electricity that the house isn't using! Precious electrons going down the drain! Thanks to the fact your house is hooked up to the power grid, that un-used power goes to the power company and they give you credit on your power bill for it. With solar, whenever the sun is shining, power is generated. You probably aren't going to use all that power when it's generated, so you can store it to use it later (a battery), or feed it back in to the grid and get credit on your bill.
The current tariff people like me are concerned about, in VIC, is called the "Transitional Feed-in Tariff" - it's for solar systems up to 5kw in size (get to that later) and the government promises it will be around until 2016. The minimum you can earn is 25c/kWh, but some power companies give you more than that (e.g: Origin give you 31c and some give 1:1 credit based on what you pay for power, so you really need to work out a good balance between what you pay and what you earn). The FiT used to be 60c/kWh up until the 1st of Jan 2012 and in other states, is still around that amount :(
Solar power also reduces the amount you suck from the grid, hence, you aren't paying anyone for it. Again, for example, it's a sunny day, and your system is generating 3kw of power. Your house is busy, there's a TV on, a few computers, fridge, freezer, washing machine, dish washer, etc. and the total power usage of your home at that point in time is around 4.5kw. Normally, without solar power, you'd be paying for the full 4.5kw, but with solar, it's only 1.5kw. Less power use = less money (and carbon emissions, but whatever, pfft, dolphins, fuck em). If you have a bigger solar setup (5kw is the biggest under the Transitional FiT), during the day, you may not even touch the grid and you end up feeding power to it and you end up in the FiT scenario where the power company pays you instead of you paying them.
At night, you generate fuck all, so all your power use comes off the grid. That's where your credits come in to play. So lets say you're at work during the day, the house is generating much more power than it's using, earning you credit. Let's make up that it's made $5 in credit for that period. Then at night, you use $4 of power, but make none. At the end of the billing period, for that day, you end up getting credit of $1. Extrapolate that out to a billing quarter and you can break even if on average, you generate the same amount of excess power as power you use from the grid, you can get a bill which is noting but credit if you don't use the grid at all and generate more solar than you use, or (the most likely scenario) if you end up using just a low amount from the grid and use all the solar power you generate, your bill will go from $300/q to only $50 or $100/q.
That's pretty much how solar power saves you money.
So sure, solar power will definitely reduce your power bill, but is it worth spending thousands of dollars up front, in order to save a few hundred a year? That's the real meat of this post, everything before was just laying the groundwork. You need to work out how long it will take to pay back the cost of the system and to work out much the system will cost, depends on how much power you use, how much you pay for it and how much power you feed to the grid and what you get for that. And even then, in Victoria, the FiT is a net tariff, (explanation from Energy Matters) "A net feed in tariff, also known as export metering, pays the PV system owner only for surplus energy they produce; whereas a gross feed in tariff pays for each kilowatt hour produced by a grid connected system." This makes it hard to predict how much money you'll earn from the FiT as solar production and home energy use isn't static. It's done in 30 min chunks via your smart meter. So in 1 hour, if you generated more than you used, you get 25c per kW. But for the sake of trying to estimate if something is even remotely worth it, we can calculate a quarter's solar generation and a quarter's power consumption and assume the difference generated earns a FiT. But keep in mind that you're metered every 30 minutes, not per day for power in/out of your home.
PVOutput is sweet website where people get their inverters set up to send daily data about how much power their solar systems generate. In Bacchus Marsh, there's 7 solar systems of various sizes. This dude's 5kw system generated 1857kWh from Sep 01 to Nov 30. For the same period, I used 920kWh in my small house here in St. Albans (gleaned from my latest power bill). So if I increase that by 50% to factor a larger house, I can guestimate I'll use 1380kWh. Taking that estimate, if I installed a 5kw solar system on the roof, I would have fed into the grid around 400kWh, which at the current 2012 minimum FiT would have given me a credit of $100. Add in the service charge (65c/day x 91 days = $59.15), I would have a bill (ex GST) of $40 credit. So for that quarter, I paid no money to the power company. If I didn't go solar, I would have used say, 1400kWh. At current rates, I'd need to pay the power company $325 (ex GST).
Let's generously over-estimate that I end up paying the power company $250/year for power if I get solar. And let's estimate that I pay the power company $1400/year without solar. With solar, I'm saving $1150/year, with a 5kw system. However, a good 5kw system costs around $13,500 all up. At the rate of $1150/year, it would take almost 12 years to break even. That's not acceptable, because the inverter probably won't last that long, meaning I'd have to pay about $700-$1000 to get a new one installed if it fails, as the warranty is only 5 years. 12 years is a long time and there's no promise the FiT will still be around. To me, with that calculation, the panels are not worth it. I'm better off just paying extra and getting 100% green power on my bill and installing a power usage meter with ZigBee/Bluetooth/wi-fi on my switchboard to satisfy my lust for power stats.
However, electricity prices will increase, that's pretty much a given. Prices will increase by 10%-20% mid-2012 due to the carbon tax and just because energy costs more each year. For example: 14.23c/kWh (govt owned, in 2002) vs. 21.30c/kWh (Powercor, in 2012), which is a 49.68% increase over 10 years, 4.9% a year. Solar panels also output less (seems to be about 0.8-1%/yr) power over time, so if you do the math on that (4.9% increase for electricity, a 12% one-off increase for the carbon tax and a 1% yearly degradation on the solar panels), using a solar production average of 18kwh/day (average from the yearly production of this 5kw system in Sunshine on pvoutput) and average usage of 15kwh/day (my current average usage + 50%), I would break even in late 2020 (about 9 years). Still not a very good use of $13,500 I reckon.
So in this scenario, a 5kw system (the largest you can get and still be eligible for the TFiT), an install price of $13,500 (SMA inverter, decent panels & reputable installer), in Bacchus Marsh, VIC, with a household power usage of 15kWh/day and average solar generation for the year at 18kWh/day, you're looking at a 9-10 year payback time. 10 years is a long time to wait and hope for some pay off. Ideally, I'd like to have the system generating free electricity after 5 years. To achieve that, the price of install needs to come down. If I could get a good 5kw system for $10,000, that would help significantly. Reducing power usage to only 12kWh a day would help too. It'd be nice if the FiT was increased by the government as well. If the cost of the panels came down and I used less power, I could probably have the system paid off within 5 years from the savings I make and then enjoy a solid 5-10 years of free electricity.
Will I put the panels on my new home? Still not sure. I'm on the fence as to wether to bother or not. It would be nice to do so, as there are other benefits besides money. It's good to reduce carbon emissions. Who knows what the next 5 years hold in terms of energy production? The price of power could go up by more than 5% each year and as the price of grid electricity goes up, generating your own is more and more attractive. If I lived in Queensland/northern NSW/northern SA, solar panels would be so dumb not to do - way more sun than Victoria and much better government incentives. Alas, Victoria's abundance of otherwise useless brown coal and relative lack of sunlight kinda impedes solar power for us
If I've made any gross miscalculations in my estimates, particularly on how I calculated the bills I'd pay post-solar install, please let me know - my email address is aagius@gmail.com
