Many people dream of disconnecting from the grid only to be rudely awakened when confronted with the costs involved in achieving self-sufficiency. While an off-grid solar energy system might be able to pay itself off over the course of its lifetime, the initial up-front expenses cannot be ignored.

Let’s take a look at the costs involved with a typical off-grid solar energy system and help you decide whether transitioning to in-home power generation is right for you.

Meet Jim and Sarah, the stars of our renewable energy case study 

Jim and Sarah are the quintessential modern electricity customers. They’ve worked hard to make their three-bedroom suburban Sydney home as energy-efficient as possible by replacing all their light bulbs and appliances with new, less power-hungry models. This wasn’t cheap, but they understand that it will be better for them financially in the long run. In addition to the economic factors, they have a pretty good understanding of how traditional electricity generation affects the planet, and they want to do everything they can to minimise their environmental impact.

Jim and Sarah are conscious of their power usage and strive to switch off electrical products when not in use. They’re not afraid to switch to a new energy provider if it means they can save on their power bill or make better use of sustainable energy.

As a result of their efforts, Jim and Sarah have seen their power bill drop significantly over the last few months, but now they want to take things to the next level. They start planning on how they can disconnect from the grid and power their home using a comprehensive solar system.

The first step to attaining renewable energy in the home

Before they begin looking at their options, Jim and Sarah use a smart meter to identify exactly how much electricity their household uses. This is a helpful step, as it shows them how much power they’ll need their in-home renewable energy system to generate reliably.

After measuring their power consumption for a few weeks, Jim and Sarah determine that their energy use is around 120-kilowatt hours (kWh) per week – right in line with the nationwide average, according to figures collated by the Australian Bureau of Statistics. This means that their renewable energy system will need to be able to produce around 17 kWh every day, but Jim and Sarah think that they can further reduce their energy consumption with some careful planning.

Jim and Sarah go shopping

Armed with this information, Jim and Sarah begin shopping around and comparing solar energy companies to find out where they can get the best deal. After doing their homework and checking out prices from a few different suppliers, they realise that a renewable energy system that meets their demands will cost around $30,000-$35,000, before taking incentives and feed-in tariffs into account. The research they read echoes these figures, with a report from global investment bank UBS finding that the average off-grid solar energy system costs around $39,000.

On paper, this seems like an exorbitant amount of cash, but Jim and Sarah are thinking of the future and believe that they’ll be able to recoup the up-front costs within a few years. After all, they won’t be paying a cent for electricity, and they won’t be susceptible to price hikes if their old energy provider had chosen to increase its rates. In addition, they know that they can sell surplus electricity back into the grid (at a rate of 4.7-6.1 cents per kWh, according to the New South Wales Department of Industry) to further offset the cost of their investment.

How long is the payback period?

In a report from the Climate Council, Jim and Sarah read that in some parts of the country, the average solar photovoltaic system is paid back within seven years. However, Sydney doesn’t get the same level of sunlight exposure as Western Australia and Northern Territory, meaning that it could take them significantly longer to pay off their system.

Jim and Sarah decide to get in touch with the electricity experts for further insight into their options and to help them make an even more informed decision.

This is just one example of a renewable energy solution that may be right for a typical Aussie household.