As energy bills continue to increase, more homeowners are eyeing off-grid systems as a potential escape route, whether for their new build or renovations. But with significant upfront costs involved, the big question remains, is cutting ties with traditional power actually worth it?
Let’s explore the realities of living with off-grid systems and weigh up the rising costs of traditional utilities against the initial investment of off-grid solutions — and how government incentives can help make it more possible.
A change of living habits
Living off-grid means dancing to nature’s rhythm. It’s not as simple as running the washing machine or dishwasher when you like. You’ll learn to use sunlight effectively, running energy-intensive appliances during peak solar production. As the sun sets, gradually reduce energy consumption, switching to low-power tasks and rely on battery storage for necessities.
Your energy habits will need to flex with the seasons. Summer days might have you running at full capacity, while winter calls for more conservative power use and having alternatives like wood stoves.
With water systems, you’ll shorten your showers as you carefully track your water tank levels. Checking the rainfall radar will become as habitual as checking your phone and setting up grey water irrigation for your plants.
Smart off-gridders will also have a Plan B like, water suppliers, battery storage and backup generators to support their eco-friendly homes. Once you’ve got your systems up and running and get into your new habits, the systems themselves are surprisingly low-maintenance.
Initial investment
In Australia, the total investment for a complete off-grid solution (power and water) typically ranges from $55,000-$85,000, depending on system size and household requirements. While this is a significant spend, the long-term benefits and savings of energy independence and environmental sustainability make it an attractive option.
Solar
For a small household using around 10kWh per day, expect to invest $25,000-$35,000 for an off-grid solar setup. Homes with higher energy demands can expect for a mid-range set up (5-10kW): $35,000-$50,000 through to high-end (10kW+): $50,000-$70,000. This includes:
- Solar panels
- Battery storage
- Inverters
- Installation costs
Water
A complete off-grid water solution typically costs around $30,000 and include:
- Rainwater tanks
- Filtration systems
- Greywater treatment
- Plumbing infrastructure.
Property location and distance to existing infrastructure will be major factors in your choices. While most Yarra Valley areas can connect to the grid, remote locations might find self-sufficient systems with generators more cost-effective due to high grid connection fees in those areas.
Recovering your investment over time
A modest family home using around 10kWh daily would typically spend upwards of $4,000 yearly on electricity and $1,600 on water. With annual savings of $5,600, you’d recover your investment in approximately 10 years.
For homes with higher energy demands (15-20kWh daily), annual utility costs often reach $6,000 for electricity and $2,000 for water. Yearly savings of $8,000 make the payback period about 8 years.
Larger homes consuming 25+ kWh daily might spend $8,000+ on electricity and $2,500 on water annually. With potential yearly savings of $10,500, even this premium system pays for itself in roughly 9.5 years.
Government support making off-grid affordable
The Australian Government provides nationwide incentives that significantly reduce your upfront solar installation costs. Victorians switching to solar power receive considerable assistance from the government’s Solar Homes Program. Get up to $1,400 in solar panel rebates, $1,000 in hot water system rebates, and up to $8,800 in interest-free loans for battery storage. These incentives help lower your upfront costs to help make your off-grid dream within easier reach.