The savings you get from using solar power at home or in your business depend on how you actually use the electricity produced by the system. It’s all about making the most out of the energy you generate.
Running appliances (self-consumed)
Sent to the electricity grid (exported)
Wasted if the export limit, or how much electricity can be exported to the grid, has been reached (curtailed)
Used to charge a battery if the system has one.
Solar reduces your electricity bill through:
Self-consumption
Solar Export
Reducing Peak Demand
You can save the most money by self-consuming, or using, the electricity generated by your solar system.
In the middle of the day, your rooftop solar setup is cranking out 4 kW of power. When your fridge, lights, and computer are running, they use up 1 kW altogether. This 1 kW of solar energy is being used right where it’s made, while the extra 3 kW is sent back to the grid.
Later in the day. Your rooftop solar system is only generating 2 kW of power. At this time, your using your washing machine in addition to the fridge, lights, and the computer. All in all, they are using 3kW. All the power being generated by your solar system is being used, and the other 1 kW is being imported from the power grid.
Late in the night, you’re using the lights, dishwasher and the TV, for a total of 2 kW. Your solar setup is not generating any power right now, so your importing all your electricity from the power grid.
You can think of a solar panel as being a bit like a tap with water flowing out of it.
The power output (measured in watts or kilowatts) is like the flow rate of water from a tap, indicating how fast electricity flows out of the panel.
The quantity of electricity produced during a specific time frame is super important for figuring out how much energy we’re using. It’s kind of like measuring how much water flows out of a faucet to see how much electricity is being consumed. Keeping track of watt-hours or kilowatt-hours helps us understand our energy usage better. This measurement is really handy for keeping an eye on and controlling energy consumption effectively.
SELF-CONSUMPTION SAVINGS
When you use solar power for your home or business gadgets, you end up needing less electricity from the power company. This drop in power usage from the grid is commonly known as solar self-consumption.
When you use solar energy generated by your home or business, you’re basically cutting down on the amount of electricity you have to buy. The money you save for each unit of solar power you use will vary depending on the price you’re charged by your electricity provider. This price can change based on the time of day, day of the week, or season, depending on your electricity plan.
SOLAR EXPORT EARNINGS
If your rooftop solar panels produce more power than you need, the extra electricity goes back to the grid. With a feed-in tariff included in your energy plan, you’ll get a credit for the surplus power on your bill.
In case your system has a pre-determined export limit set with the distribution network service provider, any surplus solar energy exceeding this limit will be cut off and not compensated. It is important to understand and adhere to the specified export limits to avoid any loss of generated energy.
To optimize cost savings on electricity bills, it is crucial to prioritize utilizing the solar energy you generate for your own consumption instead of selling it back to the grid. This is because the remuneration for excess energy fed back into the grid is typically lower than the cost of purchasing electricity. By enhancing your self-reliance on solar power, you can effectively increase your overall savings. Discover strategies to enhance self-consumption and maximize the benefits of your solar energy production.
PEAK DEMAND REDUCTION
The demand charge tariff is a common feature in many business pricing plans and some household plans. It involves a charge based on the peak demand, which is the highest amount of power drawn from the grid at any given time. When a solar system is generating electricity during this peak demand, it can help reduce the peak demand charge on the electricity bill.
