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How Solar and Battery Savings Are Really Calculated

Updated: Apr 27

The main reason most people switch to solar and batteries is to save money on their electricity bills.


But too often, we hear from people who say "I didn’t get the savings I was promised." In many cases, that’s because the savings were calculated unrealistically during the quote process.


In this guide, we’ll show you how solar and battery savings should be calculated—using real data, clear steps, and what to keep an eye out for.


Step 1: Understand Your Energy Usage

Before we design a system it’s important to understand how your household currently uses electricity. There are different ways to gather this data, and some are more accurate than others.


The best sources of usage data (ranked):

1. Smart Solar Monitoring -If you already have solar and a consumption meter already installed, this is the gold standard. It shows:

  • How much energy your panels generated

  • How much you used directly

  • What was sent back to the grid

2. Smart Meter Data - If you don’t have solar yet or don't have consumption monitoring on your exisiting solar system, we can often access your smart meter data through your electricity retailer. This shows how much energy you pulled from the grid (and exported if you have solar) but not how much solar you used directly, this is referred to as "self-consumption".

3. Electricity Bills - Your bills give a rough picture of your daily usage, peak seasons, and hot water loads. Not as precise, but helpful.

4. Rough Estimate (🚨 Red Flag)If a solar company only asks "What’s your average bill?" and doesn’t check any of the above, it’s a warning sign. They’re not designing a system around your actual needs.



This graph shows an average daily energy usage profile in Australia. Note the peaks in the morning and evening are typical of the rush to and from school or work.
This graph shows an average daily energy usage profile in Australia. Note the peaks in the morning and evening are typical of the rush to and from school or work.

Step 2: Designing the Right System

With usage data in hand, a good system designer will consider:

  • How many panels you need now and in the future

  • How many panels will fit on your roof

  • Whether a battery makes sense for your usage

  • Your goals and your budget


They’ll then overlay solar production vs. your usage profile to model where your energy will go:

  • What you’ll use directly (self-consumption)

  • What you’ll store in a battery (if included)

  • What you'll send back to the grid



The graph shows that with a 8kW solar system (the average size of a solar system installed in 2024). It demonstrates that for much of the day energy is flowing to and from the home as the generation of the system does not match the usage in the home. This results in a lower lower percentage of self-consumption.
The graph shows that with a 8kW solar system (the average size of a solar system installed in 2024). It demonstrates that for much of the day energy is flowing to and from the home as the generation of the system does not match the usage in the home. This results in a lower lower percentage of self-consumption.

Now if we add in battery both the imports and exports reduce significantly and importantly avoiding importing from the grid in the highest demand period of the day, the late afternoon and evening.
Now if we add in battery both the imports and exports reduce significantly and importantly avoiding importing from the grid in the highest demand period of the day, the late afternoon and evening.

These are just average figures and estimates to provide an insight to how solar and batteries change the flow of energy in the home. Every home is different and all solar systems perform differently, so it's important that your quote is tailored to your needs.



Step 3: Applying Real-World Energy Rates

With your energy flows mapped out, we now apply actual electricity rates to calculate savings.

  • Grid electricity (what you’d otherwise buy)

  • Feed-in tariffs (what you’re paid for sending solar back)

  • Controlled load rates (if relevant)

If estimating long-term savings, we use a 2–5% annual increase in energy prices—a common, conservative assumption.


In this example solar and batteries reduces the grid imports by over 85%. With the right designed system this result is possible for most households.
In this example solar and batteries reduces the grid imports by over 85%. With the right designed system this result is possible for most households.

⚠️ Buyer Beware: Common Quote Tricks

Unfortunately, some companies inflate savings to win your business. Watch out for these:


1. Unrealistic Feed-In Tariffs

Feed-in tariffs above $0.07/kWh are rare. If they’re quoting higher, check if that rate requires you to pay more elsewhere.

2. Overstating Self-Consumption

If you don’t have smart meter data or consumption meter data, assumptions should be:

  • ≤ 45% self-consumption for solar-only

  • ≤ 75% self-consumption for solar + battery

These are Aussie household averages. Real-world usage varies, so personalised modelling is key.


3. Inflated Electricity Rates

Make sure the rates used in savings calculations match your actual bill. Higher rates equals artificially inflated savings.


4. Time-of-Use Tariff Swaps

Sometime when you install solar your energy distributor may switch you from a flat rate to a time-of-use tariff. That can help or hurt, depending on what you get installed. Make sure to factor this into your quote and decision making process.


The Bottom Line

Going solar will reduce your energy costs, but how much depends on your usage, your system and your energy plan. A good solar company will:

  • Ask for your data

  • Build a system that matches your needs

  • Use realistic savings calculations

If they skip those steps, get a second opinion, it could save you thousands upfront and overtime.


Ready to get a properly designed system? Request a quote from our team.


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