Unless you have lived in the last century, you have now heard of the benefits of installing solar energy. In fact, if you have not installed solar energy, there may only be one thing stopping you-cost.
Although the price of solar energy has fallen sharply in recent years, it is still a huge investment for ordinary households. So how much will your solar system set you back? Canstar Blue took a look.
The cost of installing a standard rooftop solar photovoltaic system is usually between US$3,000 and US$12,000. The price mainly depends on your location and the size of the system you are installing-the larger the system, the more expensive it is.
These prices include discounts on federal government Small Scale Technology Certificate (STC) awards, you can read more here. STC essentially provides substantial discounts (up to thousands of dollars) on renewable energy generators (such as solar panels). Again, it depends on your location and the size of the solar photovoltaic system.
As a very common rule, the average price you should pay for solar installations is $1.40 per watt (or $1,400/kW). In other words, the larger the solar system, the lower the price per watt.
The following table shows the average price of purchasing and installing solar photovoltaic systems in various states and territories:
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Information comes from SolarChoice, September 2019. *The estimated price of the product and installation after the government STC rebate. NT and ACT prices are not included in the table.
These prices reflect estimated costs in the capital city. The actual cost of solar panels can vary greatly, depending on your location, the system you use, and your installer. For a specific quotation, please contact your preferred installation expert.
As you can see, prices vary depending on where you live. Western Australia is the cheapest place to install solar energy (except for 10kW systems), while installing solar energy in the Northern Territory is 2 to 3 times more expensive. According to data from Solar Choice, the average price of installing a 1.5kW system in Western Australia in September 2019 was US$2,460, compared to US$4,860 in the Northern Territory.
System size and location are undoubtedly the biggest factors affecting the price of solar systems, but there may be other factors that affect the price, especially factors related to installation costs.
Although the solar system is undoubtedly expensive, it can still be a profitable long-term investment. In most cases, your solar system can eventually use the savings it generates to recoup its costs. How long this takes depends on countless factors, including household energy use, solar system size, cost, and...weather.
Another important consideration is if you receive a feed-in tariff (FiT), which is a small subsidy for every kilowatt-hour of electricity your solar system outputs to the grid. The feed-in tariff is usually around 6c-16c, although some people who live in rural areas or install solar energy before 2013 may still benefit from a “premium tariff” of 20c or higher for a period of time.
Most solar systems have a warranty period of 10 to 15 years, and you can usually expect your solar system to pay for itself during this time (as shown in the example below). After that, any electricity generated by your solar panels is pure profit.
How long will it take to pay off the solar energy?
In this example, let's use a fictional Sydney house. It has the following details:
Under optimal conditions, a 4kW solar system can generate approximately 16kWh of electricity per day. If there is no solar battery, this energy must be consumed immediately or exported to the grid. Assuming that 6 kWh of solar energy is consumed a day, this means that 10 kWh of solar power is output. This house will receive a feed-in tariff of 100c (10c x 10kWh) per day.
This family consumes 20 kilowatt-hours of electricity every day. Calculated at a rate of 28c/kWh, which is equivalent to US$5.60/day. However, solar energy now produces 6 kWh, which means that only 14 kWh needs to be extracted from the grid. Electricity from the grid now costs the house $3.92 a day. Save $1.68 per day.
When you combine the savings in electricity bills with feed-in tariff subsidies, this house can save $2.68 in electricity bills per day.
The cost of this solar system is US$5,233, so it will take 5.5 years for this solar investment to pay for itself.
Please note that this example does not take into account the degradation of solar panels. It also assumes perfect sunlight throughout the year.
The above example is very general, and the time it takes for your solar system to recoup its costs will depend on your own situation. If your energy retailer supports you, it is easier to save money by using solar energy, which is why Canstar Blue is researching consumer satisfaction with leading solar companies.
Below are some of the cheapest solar specific deals offered by retailers in our database. These fees are based on Sydney's Ausgrid network, but prices will vary based on your situation. We show each retailer a product, arranged in order of price from lowest to highest. The annual price estimate assumes that the general energy consumption of residential customers at a single rate is 3900 kWh/year. The price estimate does not include solar feed-in tariff credits. These are products from recommended partners†. Our database may not cover all transactions in your area, please check the retailer’s website for the latest information.
Below are some of the cheapest solar specific deals offered by retailers in our database. These fees are based on Melbourne's Citipower network, but prices will vary based on your situation. We show each retailer a product, arranged in order of price from lowest to highest. The annual price estimate assumes that the general energy consumption of residential customers at a single rate is 4000 kWh/year. The price estimate does not include solar feed-in tariff credits. These are products from recommended partners†. Our database may not cover all transactions in your area, please check the retailer’s website for the latest information.
Below are some of the cheapest solar specific deals offered by retailers in our database. These fees are based on Brisbane's Energex network, but prices will vary based on your situation. We show each retailer a product, arranged in order of price from lowest to highest. The annual price estimate assumes that the general energy consumption of residential customers at a single rate is 4600 kWh/year. The price estimate does not include solar feed-in tariff credits. These are products from recommended partners†. Our database may not cover all transactions in your area, please check the retailer’s website for the latest information.
Below are some of the cheapest solar specific deals offered by retailers in our database. These fees are based on Adelaide's SA power network, but prices will vary based on your situation. We show each retailer a product, arranged in order of price from lowest to highest. The annual price estimate assumes that the general energy consumption of residential customers at a single rate is 4000 kWh/year. The price estimate does not include solar feed-in tariff credits. These are products from recommended partners†. Our database may not cover all transactions in your area, please check the retailer’s website for the latest information.
*New South Wales, Queensland and South Wales: Prices include GST and are: Assuming that all discount conditions provided (if any) have been met, according to AER as stated at the top of each table, simulating the annual usage of the distribution area .
~VIC: The price includes GST and is: Use the annual reference consumption provided by the Victorian government for domestic customers in your distribution area, as stated at the top of each table, the estimated minimum price that customers may charge for the plan within one year, And assuming that all discount conditions (if any) provided have been met.
ACT: The price includes GST and is: Use the annual reference consumption provided by the Independent Competition and Regulatory Commission (ICRC) for domestic customers in your distribution area, representing the estimated lowest price that the customer may charge within a year for this plan, as shown below Describe the top of each table and assume that all discount conditions (if any) provided have been met.
TAS: The cost is based on the annual household usage of Tasmania’s TasNetworks grid of 6,775 kWh/year in November 2021. For more information on annual cost calculations, click here.
Some plans may require you to meet certain conditions before you can receive a discount. Check the energy supplier’s program information for details of all possible discounts that may apply and any conditions that need to be met to obtain these discounts. Some plans may have a minimum period of more than one year. In this case, the total cost during that period will be much higher than the price (only one year). Before making a decision to adopt a new plan or change a power supplier, please consider the supplier’s detailed product and pricing information.
^What is the reference price?
The reference price is provided by the Australian Energy Regulatory Agency (AER) for a fiscal year to supply electricity to residential users in the distribution area, and is based on an assumed annual usage. Any difference between the reference price and the planned unconditional price is expressed as a percentage above or below the reference price. Shows the terms of any conditional discounts, and any further differences between the reference price and the discount applied when the conditions are met, expressed as a percentage above or below the reference price.
>What is VDO?
Victorian Default Offer (VDO) includes daily supply fee and usage fee (per kWh). The difference in electricity prices between distribution areas reflects the unique cost of providing electricity services in each area. The difference between the VDO and the planned unconditional price is based on the Victorian Government’s annual reference consumption for domestic customers in the distribution area, expressed as a percentage higher or lower than VDO. The terms of any conditional discounts are shown, as well as any further differences between the VDO and the discount applied when the conditions are met, expressed as a percentage above or below the VDO.
The annual cost estimate does not include solar payments. The feed-in tariff shown is only a single rate. Solar products may only be provided to solar customers, and some products may only be provided to customers who purchase solar photovoltaic or other products through retailers.
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As far as we know, all the information in the article on the Canstar Blue website was correct at the time of publication. This information may change over time. Please refer to the product fact sheet (or related similar documents) before making any purchasing decision. Canstar Blue's website terms and conditions apply.