Skip to content

Will going solar reduce my energy bills?

Home » Knowledge Hub » Will going solar reduce my energy bills?


Solar panels aren’t just good for the environment – you can benefit from serious savings over the lifetime of your solar panel system. Installing solar will reduce your energy bill, how much depends on the system size and your energy usage.


Solar panels cost money upfront, but will save you money in the long term The average home can save between $10,000 and $30,000 over the lifetime of your solar panel system.

The simple answer to the question “Will going solar reduce my energy bills?” is yes. That being said, how much you’ll save depends on a number of factors. The size, angle and azimuth (how close the direction of your roof points to North) of your solar system are all important. But also your energy demand (how and when you use your electricity) and the price you pay for importing electricity now and in the future are equally relevant.

Saving money by reducing your electricity bill is one of the main appeals and selling points for solar as a product and home upgrade.

So let’s look at an example…

The average annual electricity use required for a kiwi household is 7000 kilowatt-hours (kWh). Multiply that by the current national average electricity cost ($0.36 per kWh) and you’ll find that the typical house is spending just over $2,520 a year on electricity alone.

Then, we need to consider the likelihood of electricity prices increasing or decreasing. When you generate your own energy with a solar system, you’re locking in energy costs at a constant rate so that you no longer have to consider variable retail rates.

Because of the nature of solar as an up-front investment, the only costs associated with a solar system will be the cost of your installation and any import electricity costs to top up, to cover all your demand (likely in the winter months). Whether your system will completely offset your electricity depends on the size of your solar system, you can find out more about sizing a solar system here.

To provide a snapshot for typical bill savings from a solar installation, the following table offers an example for a 25-year savings estimate when installing solar. The data incorporates a number of assumptions:

System size: 5.44 kWp
System Cost: $15,000
Electricity demand: 7000 kilowatt-hours per year.
Electricity generated: 7,573 kilowatt-hours per year.
Percent needs met by solar panels: 60%*
Electricity rate: $0.36 per kWh
Export rate: $0.08 per kWh

Total Savings Per Year: $1,636
Return on Investment: 10%

* 60% due to generation and demand not always being at the same time.

So can I reduce my electricity bill to nothing?

Yes you can, by installing batteries and managing your usage, you can in theory get down to the golden $0 bill. Although it’s likely you will have a very small line charge fee still. We recommend having the backup of the grid, just in case you ever need it.

If you are interested in installing solar panels or batteries then fill out the form below and one of our team will get in touch with you to see how we can help.

  • Queenstown Solar will use your details to contact you occasionally with useful information about solar. You may unsubscribe from these communications at any time.