Call it what you want. A u turn. A pivot. An about face. A full 180. A flip flop. But we are have changed our minds on solar panels.
In May, we spoke of our thoughts on solar panels which we were considering for the new build.
The conclusion at the time was that we would be around $7,000 better off over 20 years not getting solar panels and investing the money instead.
Since that time though, I have been doing more research into solar panels and how to make best use of them. Some further calculations have been done that now make it seem much more worthwhile.
So what has changed?
For one, my original estimate of 8,500kw per year electricity use was well off. That was based on 2022 numbers. With a growing family, that number is now closer to 10,500kw. Why does that make such a big difference? Quite simply, the more power you use, the more money solar panels can save you.
Secondly, originally I anticipated saving around 50% with solar panels. But based on getting the right number of solar panels and a solar hot water diverter, I believe we can get that number closer to 55-60%. Less grid use makes a massive difference to how much we can save using solar. Based on having a real close look at our power usage, it seems our family uses around 45% of our power towards hot water. This is a number much higher than the 30% use most calculators assume. The fact that hot water makes up such a high percentage of our power, means we can take advantage of a solar hot water diverter. We have a large 300L hot water cylinder, and the diverter can connect to the cylinder. Basically, any surplus solar energy that is not required is sent to the hot water cylinder before being sold to the grid. The hot water essentially being free, or close to, for most of the year. It’s much more better financially speaking if we can store and use the solar than sell it at half the price. We would change our patterns of use too.
Thirdly, we didn’t realise at the time, but those in Nortland pay more in power than the rest of the country. From what I understand, about 10% more than we currently pay in Wellington. This is money that tilts the results further more in favour of getting solar panels.
Fourthly, another benefit that I hadn’t considered is that we can now move to a power company that looks after customers with Solar. We are currently exploring a few options, including Contact Energy, Electric Kiwi, and Octopus Energy. Contact offers 3 hours free power between 9pm and midnight. Which is great for those with solar because it extends free power beyond just the daytime/sunshine hours. Electric Kiwi have one hour free power daily and half price night and off peak power, which again is great for periods when we don’t have solar production. I haven’t received much information on Octopus yet as our smart meter is yet to be installed so they can’t quote us, but I see they offer 17c per kwh buyback on any solar power we would sell to them, which is much higher than the next highest I know of – 12.5c for Electric Kiwi. Obviously how much they charged on the fixed daily rate and standard variable rate is important too, and we will be weighing up the three options there. Either way though, we will find extra ways to benefit from having a solar set up here.
Fifthly, in the original article I had assumed the alternative of using the $14,000 that would have gone on solar panels to invest. But what I didn’t assume, and should have, is that now that we would be saving around $1,500 a year minimum, then that is an extra $15,000 we have in our pockets. $1,500 a year we are not spending. $1,500 a year (increasing with inflation) that we can now invest. It wasn’t a fair comparison that I included investing the full $14,000 but didn’t include investing the savings.
So, armed with the new information, I made some changes to our assumptions and also some changes to the spreadsheet. It seems instead of being better off not buying solar panels, we would now be better off buying solar panels in about 8-10 years. This even includes the opportunity cost of not investing that money too. If we didn’t include the opportunity cost it would be around 7 years.
Before you ask, yes it also includes an assumption of the effectiveness/efficiency of the solar panels decreasing by 0.5% per year. And it didn’t include any sale of surplus solar which is unlikely. Both these assumptions meaning my assumptions are pretty conservative and probably more in favour of not getting solar panels.
Then everything after that 8-10 year period is pure savings. The panels with a guarantee of 25 years, should provide us savings of around $50,000. Even after consideration of buying a new $10,000 inverter after 15 years.
Of course assumptions can and do change in reality, but I feel these assumptions are more in reality of what will happen than in my original article.
I wasn’t looking for reasons to buy solar panels and turning data to suit my narrative. I would have been ok without solar panels, especially if it meant they cost more than they save. I was just researching more information, and this is the data that presented itself.
I guess one lesson I hope others can take from this is it is ok to change your mind! New information becomes available. Especially as you start learning more and going deep into rabbit holes. To not be willing to change your mind based on new information could be seen as stubbornness.
I see it a lot in the political arena where one party will change their mind on a policy or an idea and the opposition party will label them as flip flopping or flaky. But I see the ability of changing your mind as a sign of strength, confidence and intelligence. Not to brag 😊
One other note, and one that was made in the comments section of the original article was the feel good factor in owning solar. On the original numbers, the feel good factor doesn’t help pay the bills. But now that it seems the panels will well and truly pay for themselves, then the feel good factor comes back. I’m not going to lie, knowing that we aren’t consuming as much electricity will be a nice feeling. And it is a feeling we can share with our kids. Having solar panels becomes an educational lesson for the kids that we are delighted to pass on. The meaning of saving money, saving power, being smart about power use are all good lessons we feel.
Finally, the competitive person I am who likes to go against the grain, is relishing the opportunity to make savings. With solar, an opportunity presents itself to really stick it to the system! Ok, that may be a bit over the top, but I like to dramatize things to make money a bit more exciting in my own life! I like to turn things into a game that needs winning. Me against the electricity companies. I can’t let them win. Ok, ok settle down there buddy. Am I talking out loud again? Oh crap. Delete. Delete.
But in all seriousness, looking for extra ways to make better use of power is something that will be fun. We of course don’t want to get to the point where we become pedantic with power use, like 1 minute showers. But we will find a point where we are happy with.
So there we are. The deposit has been made and we are getting solar panels.
For anyone interest we have decided on the Q Cells Q Peak panels. We are getting a 6.4kw system, which is 16 x 400 watt panels. For the inverter we are going with the Fronius Primo Gen24 5kw. And for the solar hot water diverter we are going for the Eddi. We are also getting a smart meter so that we can monitor our usage. Total cost is just north of $19,000 with Harrisons Solar.
We will be utilizing a 1% loan from ANZ as part of the good energy scheme they have running. It is a 3 year loan where we have to pay a 1% interest rate. We will likely put the money in a 2-3 year term deposit returning around 4% after tax. Pocketing the 3% difference, saving us an extra couple of thousand dollars too. From there we will most likely pay off the system unless interest rates come crashing down again!
If you are interested in seeing the spreadsheet I used, I have uploaded it here. Let me know what you think or if you have any ideas on how to make it better.
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