Home solar beats owning an EV
I ran the experiment. Here are the numbers.
I bit the bullet and installed home solar in May this year. We installed an 8.4kW array of high-efficiency REC panels to the northerly bit of the roof (for the sun). That’s 20 panels - three rows of seven minus one for the chimney. And I added a 12.8kWh Sungrow modular battery to the south side of the house (for the shade and environmental protection).
The inverter’s a Sungrow unit too - so it talks to the battery, and the grid (and me, via my wireless network and the Sungrow app).
In this report I’ll break down the cost and the return on investment. Because, in my view, September and March are the best months to snapshot the performance of any home solar system.
The big question: Was it worth it? Plus: I’m the car guy, right? Why didn’t I just go all-in on an EV and roll around, silent but deadly, saving the planet that way? Did I make the right call?
POWER BILLS - BEFORE & AFTER
Here’s my electricity bill for September a year ago. September 2023.
And here’s the bill for September 2024 just gone.
The headline is: $257.96 in total charges from those saints at AGL last year; thanks very much, and $56.36 this year. Of course, that includes a $31.29 flat charge for being connected to the grid.
So, if we control for that, it’s $226.67 in September last year, just for the torrent of electrons flowing down the wires, which dropped to $25.07 after I bolted solar up to the house one year later.
That’s a reduction of $201.60, or 89 per cent. In isolation, that sounds pretty good, but a solar array and a battery are not free. So in my view it really only makes sense to think of this in terms of return on investment.
Since that installation exercise in May, I’ve been helping hundreds of ordinary Australians with choosing a quality home solar system using companies with high-level onshore inventory and support. If you want solar, or if you’ve got solar and you want to add a battery to increase security in a power failure, or get power failure protection, or maximise your system’s performance without exporting back to the grid, I’ll help you bypass the cowboys.
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SLASH YOUR POWER BILL. GET SOLAR NOW!
PAYBACK PERIOD?
What did it cost, and what does it deliver, and do the proportions of those two things line up? A lot of people who pass their solar enquiries on to me think in terms of ‘payback period’ - as in, how long would it take for the savings to equal the up-front cost? I don’t think that’s quite as rational as return on investment. But they’re closely linked anyway.
SEPTEMBER & MARCH MATTER
The reason September and March are important here for benchmarking is pretty simple. The 22nd of both these months is a pretty special day for planet earth, as it otherwise monotonously orbits the Sun. It’s the equinox - where day and night are equal lengths. Not only that, but the sun is halfway up - in the context of its midday elevation, between the extremes of the solstices in December and June.
September and March are - if you like - the median months in terms of the radiation your array will be exposed to. On the demand side, things change, obviously, throughout the year. You thrash your air conditioner in summer, and the heater gets ramped in winter, but sunlight is at its most median in September and March.
These two months are therefore excellent benchmarks of the median monthly performance of one’s solar array - on the ‘supply’ side.
You can see above that my bill has - pretty much - September 22nd, bang in the middle of the billing cycle. Close enough that it makes no difference in practise, anyway.
So, I think it’s safe to say that you will get a decent snapshot - ballpark - of any system’s annual performance if you take your September or March electricity bill and multiply by 12. That’s because: more sun for the next six months. Less sun for the six months after that.
MY RETURN ON INVESTMENT
Bottom line: I saved $201.60 in the month across the spring equinox. Times 12 equals $2419.20 that I’m not paying to AGL. Not too distraught about that.
My home was a problematic site for solar installation. On the plus side, I do have sufficient northerly aspect on the roof. However, to get up there, the installers had to cross the Bridge of death, almost. And the chimney is on the northern edge, which casts a shadow on one panel, which is not ideal.
Also (and this may not come as a shock) I was very demanding about how I wanted it done. I wanted the battery be way over on the other side of the house from the array, where it could be A) under cover, and B) not in the sun. (Not that it has to be either of those things - I just thought it was better for environmental protection and longevity if we did it that way.)
That meant some long cable runs under the floor for the DC power. Essentially, the full width of the house. Also, working up so high, we also had to install edge protection.
So, to make this more relevant to you, presuming that you don’t live above Everest Base Camp, on the site from hell, I went back to my solar partners and asked for a representative quote, which didn’t involve Bridges of Death or subterranean cable runs across three postcodes.
This would be for a more generic system installation with the same performance, comprising 8.4kW of panels and 12.8kW of battery, but no high wire and no unreasonable geriatric shouting at installers in the manner of grandpa Simpson to do preposterously inconvenient things.
And they said: “About $24k.”
So, $24k for the capital cost, and a saving of $2400 a year, ballpark, off your electricity bill. Even a politician could crunch those numbers. I’m calling that a 10 per cent return on investment, per annum. And, because it’s money you save, as opposed to money you earn, it’s tax-free.
Also, I’ve got one lighting circuit and one power circuit hooked up so that if the grid fails, we’re up and running. The fridges are running. The array is charging the batteries (only if the sun is out, obviously). We can get by for days, quote-unquote, ‘off the grid’.
And I’d suggest 10 per cent ROI is pretty good, tax-free.
I say this because you could take out (for example; I just looked it up) an ANZ term deposit, you’ll earn 3.8 per cent per annum for 24 months. If you invest the same $24,000 you’ll earn a staggering $76 a month. And pay 37% of that to Uncle Albo, probably, after which it becomes $47.88 a month.
If you tip the same funds into solar you get four times the real return (at least that’s my experience of it) plus add value to your house, and you help reduce emissions. And every time electricity goes up because some utility provider pays a lobbyist to have a bleat in the minister’s ear - so does your return on investment.
If, for example, electricity goes up 10 per cent, so does your ROI. Ten per cent growth on a 10 per cent ROI equals 11 per cent ROI, after a hypothetical electricity rate hike, which will be inevitable.
So, I’m happy with 10 per cent, tax-free. I always hated that power bill. ‘Resented’ is probably a better word. I know it’s completely irrational, because electricity is so useful, but hey. Imagine living without it.
However, the rational and irrational parts of one’s consciousness are often at war. At least, the are for me.
Perhaps I resent it because Australian electricity is absurdly expensive, or because access to it should be a given, in a first-world country, and the cost should therefore be trivial.
Electricity should be cheap in Australia. We’re drowning in coal, and uranium. It shits me that it’s not. It shits me further that there’s a whole industry of bullshitters in Italian suits on healthy six-figure wedges whose only job it is, is to justify to anyone who never studied applied physics just how amazingly reasonable the extortionate price of electrical energy actually is.
EFFECTIVE CLIMATE ACTION?
To me, though, it’s not all about the money and the ROI. For me, installing solar was also about taking effective climate action.
Up front here, I’m a ‘moderate’ on climate change, and it seems like a pretty polarising subject to me. So many extremists at either end of the spectrum.
On the one hand you’ve got the climate change deniers, systematically polluting the comments with their astute observations including: ‘CO2 is plant food’ and ‘the climate has always changed’.
On the other hand, you’ve got the ‘net zero’ zealot camp. These people also exist on a spectrum, from the highest political offices to to the hemp-wearing ‘just stop oil’ protester with a bone in her nose, playing a plastic bucket like a bongo drum on a busy city street.
Nobody on the ‘net zero’ spectrum seems to be able to explain how we make steel or concrete or fertiliser, or plastics, or pharmaceuticals, or chemical feedstocks, or paint, or consumer electronics … we could be here all day … without hydrocarbons, mainly because all of these things are impossible at net zero.
The world would be quite different if we achieve net zero. (And definitely not better.)
At the extremes, both teams treat climate change like The Crusades of the 11th and 12th Centuries.
Somewhere in the middle, though, between these two nutbag poles, are people like me, and maybe you, who want to take effective action to minimise emissions where possible, feasible, whatever. To do this reasonably, without the quasi-religious zealotry. It’s nice to feel like you’re doing the right thing. Helping. Whatever.
(Even though, as a nation, we are the world’s number one and number two exporter of coal and natural gas, respectively. So it’s important to retain a sense of perspective.)
Anyway, my Sungrow app tells me that during calendar September my array generated 658.5kWh of electrical energy.
I’ve previously run the numbers on emissions from generating electricity nationally, using data from the Australian Government Clean Energy Regulator, which has a helpful page called ‘Electricity sector emissions and generation data 2022-23’.
Total energy production, they reveal, was 218 million megawatt-hours. Total emissions: 141 million tonnes of CO2-equivalent.
You have to convert MWh to kWh and tonnes to grams, by multiplying by 1000 and 1 million, respectively, and then divide one by the other, and if you can do that without bleeding from the ears, it’s 647g/kWh.
This is the CO2 emission cost, on average, of producing electrical energy for the grid.
That’s the national average, so it’s probably a fair bit higher than that in the eastern mainland states, because South Oz and Tasmania are the poster-children for renewables. They pull the average down.
The 658kWh I produced in September was, therefore, roughly 426 kilos of CO2 from which I divorced myself. (I know it’s not that simple - equilibrium of supply and demand, and all that - but still, this is the downward pressure which the widespread installation of home solar and battery storage puts on coal…)
SOLAR Vs ELECTRIC VEHICLE
426 kilos for September times 12 equals 5.1 tonnes of CO2 for 12 months. That’s roughly the same as the tailpipe emissions from two seven-seat diesel SUVs, driving average annual kilometres of roughly 15,000 kays apiece. (I’m basing that on 160 grams per kay, times 15,000, times two.)
If that’s you - two diesel SUVs in the driveway - and you buy one EV, and you only charge it with renewables, and it replaces one of those diesel-burners, here’s how this breaks down:
It’s going to cost 2-3 times more for the EV than for the solar. The EV is only going to be half as effective at reducing your emissions. The solar adds value to your home. The EV is going to depreciate like a stuck pig.
This is less economically rational, and less effective in terms of CO2. It’s not a close race.
HOME BATTERY SAFETY
Batteries and safety, and longevity, and the concerns orbiting all that:
The battery in an EV is in a very harsh operating environment. It’s overwhelmingly likely to be using the less stable nickel-manganese-cobalt chemistry.
The battery on your home is in a far less harsh environment. It doesn’t discharge anywhere near as aggressively. It doesn’t shake or vibrate, there’s hardly any risk of it crashing into another vehicle at high speed, and water doesn’t spray it mercilessly at 100km/h, because you don’t drive it down the freeway in the pouring rain.
A home battery is far more likely to be Lithium-iron-phosphate chemistry - which is much more stable. EV batteries discharge at peak rates of 100 to 200 kilowatts, typically. Batteries attached to houses discharge at five kilowatts.
The battery in an EV is also likely to be 6-10 times bigger than the one on the house, in terms of storage capacity. (That’s a lot more resources tied up, and a lot more pollution at the end of life.) The EV is likely to come with a five-year warranty (that’s the average car warranty in Australia). Some EV manufacturers extend the battery warranty to eight years.
My Sungrow battery has a bunch of hard-to-get regulatory standards compliance and a 10-year warranty. I’m not concerned about its longevity. They’ve got a tonne of local stock, and onshore support. I just upgraded my battery (they’re modular).
I ordered the upgrade (of two more modules) on a Friday. The tradies lobbed the following Wednesday. The stock was clearly available in the warehouse.
They were in and out in under an hour. I asked them if they wanted to go up on the Bridge of Death, for old time’s sake. They thanked me for the offer but explained that unfortunately they were quite busy that day. Otherwise, you know…
CONCLUSION
So, the bottom line here is: the EV is essentially double the price for half the CO2 benefit, more risky and more resource-intensive. And any ROI from fuel-saving will be offset by depreciation, and any time you use a public charger, that’s going to be more expensive than liquid hydrocarbon fuel in a conventional car.
To me, home solar is a no-brainer, at roughly the cost of any similar home upgrade - kitchens, bathrooms, extensions - whereas an EV is a much harder sell, on rational criteria. I’m pretty happy with my 10 per cent tax-free return on investment.
Like, what’s the return on investment for a new kitchen? It’s the intangible benefit of having a less shit kitchen. You probably add value to your house, but the payback period is infinity - or when you sell the joint, perhaps.
Obviously you can’t withdraw the capital from home solar or a new kitchen - it’s locked up in the house. So, if you install solar, it has to be for the return only, and/or the climate action, and it has to be using funds you won’t foreseeably need to liquidate.
Considering it in terms of return-on-investment - with those caveats - is more sensible than what most people do, which is considering it through the prism of ‘how long will it take to pay for itself?’.
If you put your funds in a term deposit, the payback period is about four decades, after tax… Which, I suppose, people loathe banks more, even, than electricity suppliers.
If you want solar at your place - or an upgrade to an existing system - more panels - add a battery - blackout protection - all that stuff: Click fill in the form below.
SLASH YOUR POWER BILL. GET SOLAR NOW!
I’m convinced home solar is a decent investment, as well as something pragmatic and viable you can do - without acting like a total plonker in the climate action domain.