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Why you should switch to Solar Power in 2022

The Australian Energy Market Operator’s (AEMO’s) Quarterly Energy Dynamics Q1 2022 report has garnered a lot of attention recently. The report notes wholesale electricity prices in the National Electricity Market (NEM) 1 jumped to an average $87 per megawatt-hour (MWh) for the first quarter of 2022 – up 67% from Q4 2021 and 141% on Q1 2021. The NEM consists of Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania. Higher retail electricity prices have added to increased financial strain for the common Australian population and has simultaneously made installing solar panels an even more attractive prospect.

The reasons for the increase in electricity prices according to the AEMO are as follows –

  1. An Increase in demand for electricity
  2. Coal generator outages / Frequent power outages
  3. Higher fossil fuel costs for electricity generation

The states that observably suffered the most were those with the greatest dependence on black coal power – New South Wales and Queensland. The inclination of the Australian population to rely on non-renewable sources of power is gradually diminishing. The days of non-renewable power generation in Australia are numbered. This is largely supported by the fact that wholesale electricity prices and consequently power bills have been significantly increasing for a large population which consequently means that more Australians will turn to self-generated solar energy to rein in or obliterate their bills. This transition to green energy with the widespread shift to solar power is not only a smart financial investment but is also a step towards a cleaner, greener planet.

Better Solar Feed-in Tariffs – A respite as Electricity Prices rise higher

The increase in electricity prices have reached a record high. Wholesale electricity prices may have jumped 141% during the first quarter of 2022 compared to the same quarter in 2021. Although an electricity bill is made up of various components, and wholesale costs of electricity account for around a quarter, there could still be a significant effect on the overall bills for a large Australian population.

Those who have installed solar power systems have been able to still benefit in such times, especially those solar system owners in the hardest hit states in terms of increased electricity prices with the help of feed-in tariffs. Feed in tariff is the rate paid for all the surplus solar energy exported back to the grid. This feed in tariff rate has also noticeably increased as these rates are largely tied to wholesale electricity prices.

While higher feed-in tariffs generally shouldn’t be counted as a long-term benefit and the focus should largely remain on being able to use the solar energy for self-consumption to maximise value from a system, any extra benefits or perks are nonetheless appreciated. On a related note, solar owners should also bear in mind an electricity retailer offering a higher feed-in tariff isn’t necessarily the best overall deal – it really pays to compare electricity plans.

To see an estimate of savings and payback in your specific circumstances, solar calculators available online can come in handy to help you get a better idea of the potential savings you can make with the installation of a solar power system. If you’re eager to switch to this renewable energy source and how to ensure you get best system suitable for your personal energy needs, contact Solar Power Nation today and our sales representative will help provide a comprehensive guide to buying solar power.

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