We all assume that we save money with solar power. But do we? Really?

The answer may be as clear as mud. Solar can save you money. But not always as much as you assume and the economics are changing. Even the Energy Efficiency and Conservation Authority EECA says it doesn’t work for everyone.

It costs you money to install

Solar power (or water) systems cost you money to install. I looked at one well known company, Solar King, which charges from $7,000 to $11,000 fully installed, or around $8,000 for solar water heating only the basic $7,000 kit is designed for small homes with power bills around $90 to $120 a month. Big power guzzlers who pay at least $200 to $250 a month will need the most expensive package. It takes a LOT of power bills to pay that off. Some companies (such as Solar City) offer “free panels”. This should still save you money, but not as much as you would if you owned the panels yourself because you pay for the power you receive from the panels on your roof.

That equipment has a shelf life

Have you ever noticed how appliances die as soon as the warranty ends? Your solar panels and solar inverters should last 25 years, but the warranty may be only 10 years. Other parts of the system such as the racking, or cables, could need repairs if you’re unlucky.

It only works in daylight hours

The issue is that you only get solar power during daylight hours unless you have a battery. So you can’t just divide the $11,000 by $250 and say your solar system will be paid off in 44 months.

Batteries cost big money

If you want to be able to store some of your power with a battery expect to spend over $20,000 for your entire package for a family home. As anyone who owns a car knows, batteries don’t last for ever. If a battery dies they’re not standardised as car batteries are, replacements could be expensive.

The price of power you feed back can change

Most solar systems are what’s called grid-tie, which means any power you produce that you don’t use is fed back into the grid. Owners used to be paid to 30c per kWh unit for that excess power, but now most of the big power companies offer just 7c to 8c per unit and that could drop more, making your system less economic. There are other power offers aimed directly at solar users such as SolarShare from P2 Power that could change the economics for customers.

There’s a social issue

Power companies argue that wealthy Kiwis who install solar systems aren’t paying their fair share of the costs of running the electricity network for all. If too many wealthy people pay less to the power companies, poorer citizens have to pay more. Solar power users still need to fall back on the grid on cloudy days, the companies argue, and should pay their share of maintaining the network.

The technology is improving rapidly

Every time I think of getting solar power installed, I realise that next year’s technology could well be more efficient and cheaper than the current systems. So I go back to the drawing board.

There’s a calculator

Use this independent calculator from Energywise to find out if you could save money.

I don’t want to sound negative. If you want toys such as a heated swimming pool or a spa pool, solar energy is amazing and you’re not saddled with huge power bills for water heating.

Ultimately solar versus no solar isn’t just about money either. You might just want solar power to do you bit at reducing fossil fuel usage. I have to say that this idea warms the cockles of my heart.

Make sure you get at least three quotes and you understand exactly what’s included. Not all systems are created equal and sales people can be over enthusiastic in getting you to sign up to their deal.

The post Does solar power save you money on your electricity bill? We crunch the numbers appeared first on Credit Simple NZ.

Switching power companies sounds straightforward. And it is.  It’s just not quite as simple to get the best deal from electricity and gas suppliers as it appears in the adverts. Armed with a bit of knowledge, however, I promise you it’s almost impossible not to find a better deal. Unless, that is, you’ve already switched in the past few months.

Step 1: Choose your site

There is a bunch of comparison websites that claim to get you the best deal – just do a google search and try a few.

Step 2: Know your number

Power costs are very individual and depend on where you live. You need to have your current bill handy. Look for your ICP number on your bill. It will be a minimum of 11 characters, such as 680207NV1F0.

Step 3: Enter your details

You’ll be asked to enter your electricity (and gas) usage from that bill along with the dates it covers and click to compare.

Step 4: As clear as mud

Then the fun stuff starts. One of my colleagues describes the offers as “Confusopoly”. One throws in this and another that. Those thises and thats include magazine subscriptions, account credits, introductory prices, Airpoints dollars, fixed rates for a period and you name it. Weigh these all up to make sure you’re selecting the right one for you.

Step 5: Do you want fries (AKA phones) with that?

Many of the electricity providers also provide internet, mobile, and other services. As soon as you start bundling these all together it becomes harder to work out if you’re really getting the best deal. Your current mobile provider, for example, may have all you can eat phone calls within New Zealand, but the new one charges. You might just want to stick with individual providers. Or at least work out how much you’ve spent on the entire bundle in the past year.

Step 6: Double-check everything

You do need to cross reference the electricity companies’ websites and to read the fine print. The contracts are sometimes full of complex clauses.

Step 7: Watch out for penalties

If you switched companies within the past two years or took a new deal from your existing provider you could have signed yourself up for a fixed term with penalties if you break the contract early.

Step 8: Check the door-to-door guys

The companies that come door-to-door sometimes do have good deals, but not always. If you’re really sneaky you can sign up to the offer and wait for your existing company to call you with a better “retention” offer that you can’t get as an existing customer.

Step 9. Just do your best

Unless you’re a spreadsheet ninja, accept that you might not have clinched the absolute bargain of the century, but have probably saved money. Give yourself a pat on the back and make a diary note for one or two years’ time or whenever your fixed contract ends.

Step 10: Here’s the rub

I did my own numbers on Powerswitch, Glimp and Switchme. Powerswitch asked me many more questions about my usage and I do think I trust it more. It recommended Contact Energy with an estimated cost of $1970 spend per year. Glimp told me I was on the right company/plan already and would pay $2073 a year. Switchme claimed my bill would be $1561 per year, but didn’t ask sufficient questions to make me trust it. Power Compare makes comparisons solely on my address, which isn’t enough to get a good picture of what I could save.

Whew! Does that sound like a whole lot of work? It is a bit of work. But saving money always feels good, so give it a go.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post Sick of paying through the nose for power? Here’s how to switch (and save) appeared first on Credit Simple NZ.