The Price of Electricity Is Rising: It’s Time to Go Solar

What's Causing The Rise?

The Australian Energy Market Operator’s (AEMO) Quarterly Energy Dynamics Report revealed that wholesale electricity prices jumped to an average $87 per megawatt-hour (Mh) during the first quarter of 2022. That’s 141% higher than the first quarter of 2021. Even so, this jump doesn’t mean electricity bills will see the same increase. Bills are comprised of various factors, with wholesale costs making up a quarter of the bill. Even so, the impact could be significant.

Why this jump? The AEMO identifies the following factors behind the increase:

  • Increased energy demand
  • Outages of coal generators
  • Higher fossil fuel costs for generation

And the worst affected? New South Wales and Queensland, which rely most heavily on black coal power. Southern states, which tend to use more renewable energy, fared better.

Coal-fired power generation is soon to be a thing of the past. With the cleaner, more affordable options of renewable energy abounding, it’s surprising that so many still refuse to make the switch.

What Are The Financial Benefits Of Solar?

As electricity prices and power bills continue to soar, more and more Australians will choose solar energy to limit their electricity expenses, saving money and contributing positively to the planet.

Solar system owners in harder-hit states like NSW and QLD will benefit from the increase in feed-in tariffs, or the rate that is paid for excess solar energy produced and exported to the grid. These rates are closely connected with wholesale electricity prices. While owners shouldn’t rely on these tariffs indefinitely, and should be aware that a higher tariff offered by a provider isn’t necessarily the best option, any increase surely helps.

You could ultimately save money when you go solar. According to the SolarQuotes calculator, the first-year savings and payback periods in each capital city are indicated as:

  • Brisbane: saving $1,522 in the first year, with a simple payback period of 4 years, 9 months
  • Sydney: saving $1,425 in the first year, with a simple payback period of 5 years, 9 months
  • Canberra: saving $1,686 in the first year, with a simple payback period of 4 years, 3 months
  • Melbourne: saving $1,142 in the first year, with a simple payback period of 5 years, 3 months
  • Hobart: saving $1,114 in the first year, with a simple payback period of 6 years, 2 months
  • Adelaide: saving $1,585 in the first year, with a simple payback period of 4 years, 6 months
  • Perth: saving $1,071 in the first year, with a simple payback period of 5 years, 11 months
  • Darwin: saving $1,327 in the first year, with a simple payback period of 5 years, 4 months

It’s worth noting these numbers are based on the $6,600 price of a 6.6kW solar system fully installed, with the state rebate in Victoria also factored in. From these findings, it’s clear that a cheaper system means a shorter payback time.

Go Solar With Future Contracting Services

If you’ve made the decision to slash your power bills with a solar system installation in your Sunshine Coast business or home, look to Future Contracting Services. We’ve got years of experience providing efficient, affordable, and high-quality solar installations, repairs, general electrical and automation services to our many valued and repeat clients. Contact us today on 0427 468 568 to chat with our friendly team, to learn more about us or to obtain a quote.