People who install solar panels may have a range of goals. Some people want to reduce their greenhouse emissions, others want to reduce their electricity costs and others would like to do both. Urban customers will usually be connected to the electricity grid. You can think of the grid as like a big battery to which at times you might send power and from which at other times you take power.
Your solar panels can make electricity when the sun is shining. With the net metering scheme offered by retailers in Victoria, if you are using electricity in your house when the panels are generating electricity you will need to buy less electricity from the grid. Effectively you are paying yourself for the electricity that you generate at the retail rate that the electricity company would otherwise charge you. A typical rate charged by a electricity retailer might be up to 30c/kWh. If you make more electricity than you consume, the excess will be exported to the grid. If you have a feedin tariff arrangement with your retailer you will receive the feedin tariff for this excess. In Victoria, new solar panel installations can receive a feedin tariff of 8c/kWh. So if your electricity consumption coincides with when you generate electricity you will save more money with your new solar panels than you will receive from exporting extra generation. Some uses of electricity can be timed to coincide with when your panels are making electricity. This is a bit like doing the washing on a sunny day so you can dry your laundry on a clothesline outdoors. We can use our electric lawnmower, electric chainsaw, dishwasher and washing machine when it is sunny. With a big enough array you can power a substantial amount of equipment. I heard second-hand the other day about a guy who downsized his joinery business to work from home, plonked 5kW on his roof and now home-powers when it's sunny. Due largely to massively increased manufacturing capcity in China in turn driven by large-scale subsidised installations in Europe, the installed cost for residential PV's in Australia has dropped dramatically over the last few years. Advertised costs in Melbourne are now less than $10k for a 5kW system. At these prices, electricity from PV's is about half the peak price of retail electricity. A useful saving!
But if you have an off-peak tariff from your electricity supplier and you use this to do your washing or use the dishwasher then from a financial perspective you may be better off continuing to run these appliances off-peak. (Albeit using fossil fueled power.) The exact calculation would depend on individual circumstances such as what electricity tariffs you are paying, how much someone is at home during the day, how many appliances you have such as refrigerators that run during the day, whether you use electric heating or air-conditioning during the day and so on.
Some people aim to make as much electricity from their solar panels over a year as they consume. Using standard figures on the average sunlight received in your area allows an estimate of how many panels you will need to meet the current electricity usage on your bill.
Some folks would like to install as many solar panels as they can afford and fit on their roof. The Victorian legislation applying from the start of 2013 allows up to 100kW of solar panels to be connected to the grid from a home.
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