To assess whether it’s a worthwhile investment, first, it’s important to understand how installing solar panels will reduce your electricity bill. We are ignoring the environmental benefits for now! Offsetting Your Energy Consumption The primary way solar can help you tackle your energy costs is by reducing the amount of electricity you need to buy from your electricity retailer, which typically will cost between 15-40c per kWh. A grid-connected solar system will prioritise solar energy and harmoniously supply any remaining energy needs from the grid. A typical household may expect to offset 30% to 70% of their energy usage with solar panels, depending on how much their electricity is consumed during daylight hours. This offset percentage can get closer to 100% by installing a battery storage system. Feed-In Tariff For Excess Energy The amount of energy generated by your solar panel system is dictated by the sun, not your energy consumption, so there will be times when surplus energy is created and can be sold back to the grid for a rate called a ‘feed-in tariff’. These feed-in tariffs vary by state and which electricity retailer (e.g. AGL, Origin etc.) you are with. Typically you can usually find a feed-in tariff between 3-12c per kWh. Your ability to access a feed-in tariff is usually limited to a maximum solar system size – for a full explanation of what is possible state by state, read this guide.  Some Options For Increasing Self-Consumption Increasing your self-consumption of solar energy will reduce your energy bills. In addition, to improve your return on investment, you can consider applying a timer on common household appliances, such as: Electric hot water system Washing machine Dishwasher Swimming pool pump Underfloor heating system You can buy programmable wall-socket timers from a hardware store for under $50, or an electrician can install one for you.