Because of our position in Australia’s solar industry as a comparison and advisory service, we get feedback and comments of all sorts. One of the most confounding that we have heard the broadsweeping statement that ‘solar power is a scam’.
The fact alone that there are nearly 2 million homes around the country that have made the decision to go solar should be a clear indication that the solar game can’t be all smoke and mirrors – but we wanted to take a close look at this idea with open eyes and examine the reasoning (or emotion) behind the scam suspicion.
Possible reasons some people might think solar is a scam
Where does the idea that solar power is a swindle come from? There are three main explanations that we can come up with.
1. Solar feed-in tariff rates are much lower than what customers pay for grid electricity
It’s true that solar feed-in tariffs are not what they used to be. Once upon a time, every state and territory in Australia had a government-backed scheme that paid solar system owners very generous rates for their solar energy; while some of those payments continue for households that signed up before those schemes closed, these rates are no longer on offer to new solar system purchasers.
This means that if you’re looking into getting a solar system today, you’ll continue to pay at least 25c per kilowatt-hour (kWh) in most states, while receiving feed-in credits of only 8-15c/kWh (the notable exception being the top end of the Northern Territory, where a high rate is still on offer). This feels to many like a complete ripoff – and it’s certainly not great.
That being said, low solar system prices across the country mean that solar feed-in rates are much less important than what they used to be. Instead, focussing on maximising solar-self consumption is usually enough to make it worthwhile, with feed-in credits being an added sweetener to the deal.
2. There are some dodgy solar operators out there
There’s also no doubt that Australia’s rooftop solar industry has seen its share of cowboys and fly-by-nighters, but on the whole the industry if full of people who are dedicated to doing a good job while offering a fair product at a fair price. As a solar shopper, do your due diligence and stay far away from anything that smells like a scam. (The Clean Energy Council has a great list of things to be wary of when shopping around for a system.)
On a related note, we’ve also been alerted to instances where particularly suspicious overseas operators were calling homes out of the blue warning them about unclaimed ‘solar rebates’. These cases are examples of scams in their pure form, and not just questionable tactics from legal businesses.
Although both certainly warrant caution and will undoubtedly put some people off the idea of solar altogether, neither of these things justifies lumping the entirety of Australia’s solar industry into the scam bucket.
3. Subsidies for home solar systems drive up electricity prices for non-solar customers
Another argument could foster ‘solar is a scam’ thinking is that solar & other ‘green’ incentive schemes increase the price of electricity for those who do not have solar. While it’s true that such programs do increase electricity prices, the amounts are small compared to the other components of electricity bill pricing. The Clean Energy Council’s 2016 Clean Energy Australia Report shows that environmental policies contribute 8% to residential electricity prices, while wholesale & network costs account for the remaining 92%.
Furthermore, the CEC’s report also indicates that there has not been a strong association between renewables such as wind & solar and electricity price increases over the past decade or so.
Solar is actually a great investment
Going solar is actually one of the best things an Australian household can do to help curb their electricity bills, which is why millions of Aussie homes have made the switch to solar. The most important thing is that you understand how solar can help you and how to make sure you get a good deal on a system from a reputable company.
We encourage you to do your own research. You can crunch the numbers yourself using our Solar System Payback Estimator tool and by comparing electricity & feed-in tariff rates on EnergyMadeEasy.gov.au. These will give you the building blocks to understand how solar works and how it may benefit you.
Solar Choice works with a network of solar installers around the country to help those in the market for a solar system to get a bird’s eye view of the market and make an informed decision. Since 2008, we’ve helped over 120,000 Australian homes and businesses make an informed choice about solar. Let us help you by requesting a free & impartial Solar Quote Comparison.
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Unscrupulous contractors and companies are at fault for this. I know many people that got cheated and misinformed by solar companies. And it’s still happening. When you try to get quotes about a solar system you will always get some “cheaper” deal that is super fishy. All is needed in this case is a bit of research and more public reviews on solar systems.