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Solar energy offset is not the same as electricity-bill savings

Separate annual solar production, self-consumption and exports before estimating a reduction in your electricity bill.

Method

Annual energy offset compares estimated solar production with annual electricity use. It does not say when the energy is generated or used. A home can produce almost as much electricity as it consumes over a year and still buy electricity from the grid after sunset.

Start with the solar-offset calculator’s production estimate: array capacity multiplied by peak sun hours, 365 days and a performance ratio. Use local, realistic assumptions. Peak sun hours describe equivalent full-strength sunlight, not the number of daylight hours or the panel’s operating time.

Where the example’s solar energy goesAn illustrative 8 kW array with 5 peak sun hours a day and an 80% performance ratio produces 11680 kWh a year. Against 12000 kWh of annual use, the energy offset is about 97.33%. This is an energy ratio, not a promise that the bill falls by 97.33%.Where the example’s solarenergy goesUsed at home4,672 kWhExported to grid7,008 kWhMyCalCute.com
Where the example’s solar energy goes

An illustrative 8 kW array with 5 peak sun hours a day and an 80% performance ratio produces 11680 kWh a year. Against 12000 kWh of annual use, the energy offset is about 97.33%. This is an energy ratio, not a promise that the bill falls by 97.33%.

View data
Used at home
4672 kWh 11680 × 0.40
Exported to grid
7008 kWh 11680 × 0.60

Worked example

An illustrative 8 kW array with 5 peak sun hours a day and an 80% performance ratio produces 11680 kWh a year. Against 12000 kWh of annual use, the energy offset is about 97.33%. This is an energy ratio, not a promise that the bill falls by 97.33%.

Suppose 40% of that production is used at home and the rest exported. Self-used energy is 4672 kWh and exports are 7008 kWh. With hypothetical import and export values of 0.25 and 0.08 per kWh, their combined value is 1728.64 currency units. Valuing all production at the import price would instead give 2920 and overstate this example.

⁦Production = 8 × 5 × 365 × 0.80 = 11680 kWh/year⁩

⁦Annual energy offset = 11680 / 12000 × 100 = 97.3333%⁩

⁦Self-used = 11680 × 0.40 = 4672 kWh; exported = 7008 kWh⁩

⁦Illustrative value = 4672 × 0.25 + 7008 × 0.08 = 1728.64⁩

From production to bill estimateUse your actual tariff, export agreement and time-of-use periods. Fixed charges may remain, exports may be limited, and batteries introduce losses and costs. Shading and seasonal variation change production. This simple annual estimate does not model hourly flows, battery dispatch, financing or guaranteed payback. Concept diagram; not to scale.From production to billestimate1Estimate production8 × 5 × 365 × 0.82Separate use and exports4672 + 7008 = 11680 kWh3Apply the relevant tariffs4672 × 0.25 + 7008 × 0.08MyCalCute.com
From production to bill estimate

Use your actual tariff, export agreement and time-of-use periods. Fixed charges may remain, exports may be limited, and batteries introduce losses and costs. Shading and seasonal variation change production. This simple annual estimate does not model hourly flows, battery dispatch, financing or guaranteed payback.

View data
Estimate production
8 × 5 × 365 × 0.8
Separate use and exports
4672 + 7008 = 11680 kWh
Apply the relevant tariffs
4672 × 0.25 + 7008 × 0.08

Checks and limits

Use your actual tariff, export agreement and time-of-use periods. Fixed charges may remain, exports may be limited, and batteries introduce losses and costs. Shading and seasonal variation change production. This simple annual estimate does not model hourly flows, battery dispatch, financing or guaranteed payback.

Related calculators

Sources: Australian Government — solar self-consumption and bill savings