How you could save $3000 in power bills by making simple changes

Australian households could save more than $3000 a year on power bills by making simple energy-efficiency upgrades including insulation, solar panels and home batteries.

Fresh analysis commissioned by a renewable energy advocacy group shows millions of Australian households are missing out on cheaper bills totalling more than $23 billion each year, prompting calls for more government subsidies to help people switch to renewable energy.

Jane Barnes enjoys her cool and energy-efficient home.Credit: Louise Kennerley

Jane Barnes, who lives on Sydney’s north shore, recently installed solar panels and a battery in her home, which on Tuesday was so cool that a friend was visiting to escape the heat in her own home.

“I’ve never used so much electricity in all my life,” Barnes said. “I now have an all-electric home, and I am getting money back every month; it’s just incredible.”

According to analysis by Springmount Advisory, which built on work by the Climateworks Centre and CSIRO, the average Australian home could save $1579 a year by installing “quick fixes” such as electric cooking and water heating, and basic thermal upgrades.

By also installing solar panels and a battery, households could save an average of $3039 a year, the analysis found.

Some neighbourhoods would benefit more than others if every household upgraded fully. Areas with larger numbers of standalone houses would reap the greatest rewards, partly reflecting the practical difficulties of installing solar in apartments.

“We have seen electricity price increases, but on average, it’s about 3 per cent per annum,” said Springmount Advisory managing director Tom Quinn, who conducted the analysis for the Renew Australia for All coalition.

“For the past decade, gas has been increasing by 6 per cent per annum. So it’s a big driver – just the sheer increase in gas prices – on people’s ability to deal with the cost of living.”

In November, the number of Australian homes with solar panels reached 4 million. According to the Smart Energy Council, these homes collectively have more generation capacity (24.4GW) than all coal-fired power stations across the country (22.6GW).

Council chief executive John Grimes said the cost-of-living crisis was driving more people to take up home solar systems.

“The reason why solar has been so successful in Australia, and there are now 4 million homes in Australia with solar rooftops, is because solar is eye-wateringly cheap,” he said.

“The cost of energy produced by a solar system in Melbourne or Sydney is around 4¢ per kilowatt-hour .... [when they’re] buying electricity from the grid, people are typically paying well above 30¢ per kilowatt-hour.”

Grimes argues that while residential renewable-energy systems save money in the medium and longer term, the upfront cost of upgrades remains a financial constraint for too many Australians.

“People are doing it really tough,” he said.

David and Ruth Hudspeth invited guests to demonstrate what was possible with clean energy.Credit: Eddie Jim

“If you give someone a handout with an energy bill rebate, it helps them for a quarter. But if you actually help them set up the house [with renewables], that helps them for a generation.”

Melbourne retirees Ruth and David Hudspeth have embraced their “energy efficiency journey” so wholeheartedly they once powered a Scouts fundraising barbecue with their electric vehicle to show it could be done.

The couple acknowledge they are fortunate to have been able to afford solar panels and a hot water heat pump, which they credit for their annual power bills of $1000.

“What I’m really keen to see is government helping more householders to put on solar and install batteries,” David said.

“The price of solar and batteries is continuing to come down [but] there is a great inequity: making the benefits of energy transition accessible to more people is a really important thing to do.”

The analysis of cost savings was undertaken for Renew Australia for All, a coalition of 65 environment groups, churches, unions and community groups pushing for greater federal investment in electrification and home-energy upgrades.

While millions have adopted solar systems, uptake of batteries has been relatively slow – Renew estimates just 250,000 homes with solar power also have a battery.

On Tuesday, Energy Minister Chris Bowen announced he had asked the Australian Renewable Energy Agency (ARENA) to consider funding more community-electrification demonstration projects.

Bowen said the demonstration projects could take place in thousands of homes across the country, including rentals, and help people install solar, batteries, energy-efficient appliances and shared community energy storage.

It’s the first time Bowen has used his statutory ministerial referral powers to ask the ARENA board to back specific projects and followed the government’s deal with crossbench senators David Pocock, David Van, Jacqui Lambie and Lidia Thorpe to pass its Future Made in Australia Bill.

Property Council chief executive Mike Zorbas said communities nationwide could reap benefits from household electrification.

“Helping households electrify is a no-brainer. This will help cut emissions and, most importantly, lower power bills,” Mr Zorbas said.

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