I’m going to say something that makes solar salespeople uncomfortable: for many Australian homes, spending $2,000 on insulation before spending $6,000 on solar would save more money.

Don’t get me wrong — solar is brilliant. But if your house has no ceiling insulation, single-glazed windows, and gaps under every door, you’re using air conditioning to heat or cool the outdoors. Your solar panels are generating power, and your house is wasting it.

The hidden energy drain

Heating and cooling account for roughly 40% of the average Australian household’s energy consumption. In poorly insulated homes, this figure can be much higher because the HVAC system has to work harder to maintain a comfortable temperature.

Where does the energy go?

• Ceiling/roof: 25-35% of heat loss in winter (and heat gain in summer) occurs through the ceiling. Inadequate or missing ceiling insulation is the single biggest energy waste in Australian homes.
• Walls: 15-25% of energy loss, depending on construction type. Brick veneer performs better than weatherboard, but both benefit from insulation.
• Windows: 10-20% of energy loss. Single-glazed windows are terrible thermal barriers. Double glazing is expensive to retrofit but makes a real difference.
• Floors: 10-15% of energy loss, especially in homes with timber floors on stumps.
• Air leaks: Gaps around doors, windows, exhaust fans, and downlights can account for 15-25% of energy loss.

Add it up and a poorly insulated house might be losing half or more of its heating/cooling energy through the building envelope. That’s energy your solar panels generated that’s literally disappearing into the atmosphere.

The economics of insulation

Ceiling insulation for a typical 3-bedroom house costs $1,500-3,000 for supply and installation (R4.0 batts or higher). Draught sealing costs $200-500 for a professional job, or much less if you DIY.

The energy savings from good ceiling insulation are typically $400-800 per year, depending on your climate, current insulation level, and how much heating/cooling you use. That’s a payback period of 2-4 years — actually faster than solar for many homes.

Window improvements are more expensive and harder to justify. Secondary glazing (acrylic or polycarbonate sheets over existing windows) costs $100-300 per window and is surprisingly effective. Full double-glazing retrofit costs $500-1,000 per window and takes much longer to pay back.

The combined approach

Here’s where it gets interesting. When you fix your building envelope AND install solar, the benefits multiply:

1. Better insulation means you use less energy for heating and cooling
2. Less energy consumption means more of your solar production is surplus
3. More surplus means either more battery charging or higher exports
4. Your solar system effectively becomes “bigger” because your house needs less power

A household that reduces its energy consumption by 30% through insulation and then installs solar will have a much better self-consumption ratio and faster solar payback than one that installs solar on a leaky house.

What to prioritise

If your budget is limited, here’s my recommended order:

1. Ceiling insulation (if missing or inadequate) — highest impact, lowest cost
2. Draught sealing — cheap, effective, often DIY-able
3. Solar panels — once your house is reasonably efficient
4. Hot water upgrade (heat pump) — runs beautifully on solar
5. Window treatments — secondary glazing where practical
6. Battery storage — once the above are sorted

This order maximises savings per dollar spent. Many people skip straight to step 3 and miss the cheap wins at steps 1 and 2.

Government support

Most states have energy efficiency programs that include insulation:

Victoria: VEU (Victorian Energy Upgrades) program offers discounted ceiling insulation, sometimes as low as $200-400 after rebates.

NSW: ESS (Energy Savings Scheme) provides certificates for insulation upgrades, reducing costs.

Queensland: Climate Smart Energy Savers program offers some support, though less generous than Victoria.

ACT: Home Energy Support program includes insulation upgrades for eligible households.

Check your state’s programs before getting quotes. The rebates can make insulation almost absurdly cheap.

The uncomfortable truth

The solar industry doesn’t like this message because it suggests you should delay solar to fix your house first. That’s not exactly what I’m saying — ideally, do both simultaneously. But if you can only afford one thing right now and your house has no ceiling insulation, fix the insulation. You’ll save more money per dollar spent, and when you do install solar later, it’ll work harder for you.

Energy efficiency isn’t as exciting as solar panels. Nobody posts photos of their new insulation on social media. But it’s the foundation that everything else builds on, and it deserves more attention than it gets.