How Much Can You Save With Solar?

Some tout solar energy as the energy of the future. Not only is it shining down everyday, but it is good for your wallet as well. Let's take a look at how much you can save by installing solar.

How much can you save?

By switching to solar energy, it's estimated that you could cut your electricity bill in half^ or sometimes more. Some people report almost zero for their energy bills. As the cost of electricity rises just about every year, it becomes more and more logical to make the switch to solar.

Your savings are going to vary depending on your power usage patterns, overall usage, the location of your household and its roof orientation, the type of system you get, if there is any roof shading, and other factors. It's only possible to get a rough estimate without taking into account all these factors. I can say that a modern 5-6 kW solar panel system will most often pay for itself in 3-5 years^.

To calculate you possible savings you can get our Solar Savings Report.

Although it might not be profitable in the short term, you can save in the long term. Not only do you save on the cost of pure electricity, but also on the service fees that come along with it. This is because you can sell excess electricity as a "Feed In Tariff" back to the grid.

Cost of solar panels

To be fair, we have to factor in the cost of the solar panels. In Australia the payback period for solar panels range from about 3 years to 5 years. It depends on the city, electricity usage, systems size and other factors.

That return trounces the meagre returns available from bank accounts and the like. And once the panels have paid for themselves it's free electricity from the sun.

The more electricity you use the larger your savings. Your electricity bill can be up to $900 less over a year with a 4kW system installed*. If you are in a position to install solar panels it's something that's worth looking at.

Factors that affect your savings

Not everybody saves the same with solar. The more solar panels you have, the more electricity you will produce and so save. Although it may must more upfront investment, this is a good thing.

Your location also affects solar savings. If you live in a sunny area, your solar panels will be working overtime and generating huge savings. If you live in a cloudy area, your solar panels won't be as active.

Remote areas often have higher upfront costs for a solar system as well. So you need to factor that in to your calculations.

Instant savings

The Australian federal government offer "Small Scale Technology Certificates" (STC). These are part of the Small-scale Renewable Energy Scheme. In effect they offer a subsidy for the amount of renewable energy your panels are going to produce. Some state governments (Victoria in particular) offer solar incentives. These range from rebates of up to $1888# (Victoria at June 2020), low or no interest loans in some states and no state incentives in some areas. There are certain conditions needed to qualify for these incentives - often including income, location and others.


In conclusion, solar energy almost always saves a significant sum of money. You are also reducing carbon emissions and helping to save the planet. Any homeowner should seriously be considering solar energy in 2020 and beyond.