Solar panels are everywhere in Australia, and there’s a good reason for it. They slash your energy bills, reduce your carbon footprint, and add value to your home.
With all those advantages, it’s normal to wonder if they’re really worth the upfront cost. Solar systems aren’t cheap (the good ones, anyway) and the decision can feel overwhelming when you’re staring down thousands of dollars in upfront expenses.
At Penrith Solar Centre, we guide customers through this apprehension with an honest, transparent consultation process. Starting with these articles. Shopping for solar doesn’t need to be overwhelming. We’re here to educate today, cut through some of that chatter, and present some insight that will help you make up your own mind about investing in solar.
In this article, you’ll learn about the following:
- How Much Does a Solar System Cost in Australia?
- How Much Money Does a Solar System Save?
- What’s the Payback Period for Solar Panels in Australia?
- What’s the Environmental Impact of Solar Panels?
- What Factors Affect the Value of a Solar System?
- Additional Benefits of Solar Panels
- When Are Solar Panels a Bad Idea?
This guide breaks down everything for you – cost, savings, benefits, and challenges. By the end of it, you’ll have a better understanding of whether or not solar is for you. Let’s dive into it.
How Much Does a Solar System Cost in Australia?
The average size solar system we install is around 11 kilowatts (kW). We’ll use that figure as we evaluate upfront costs throughout the article.
Average Cost of an 11kW System:
- The cost of an 11kW system ranges widely. There are cheap systems and quality systems.
- On the lower end, you might find a system of this size for around $9,000. A premium 11kW system will be closer to $14,000.
- This is all dependent on the brand and quality of the panels and inverter (or microinverters).
Adding a Solar Battery:
- Adding a battery to your solar system will help you as you produce, store, and consume your solar energy. With a solar battery, you knock even more off your energy bills.
- You can expect to pay an additional $8,000 – $18,000 for a high-capacity battery.
- An 11kW system with both panels and a battery will cost between $19,000 – $29,000.
Government Incentives (Rebates):
There are two government incentives that work like rebates. One is a federal government incentive, and the other is for residents of New South Wales who are purchasing a battery.
Federal Government Incentive: The government regulates the trading of Small-scale Technology Certificates (STCs). These virtual tokens are purchased by companies that need to meet renewable energy goals and the money from those purchases is applied to your solar system as a “rebate.” Your solar installer does all this on your behalf.
How many STCs your system receives is based on a few factors: system size, location, and when it’s installed. The value of STCs fluctuates depending on these conditions. There’s a range of thousands of dollars’ difference across Australia, but in New South Wales, you can expect a rebate of around $4,500 for an 11kW system.
NSW Battery Rebate: This one works like the federal rebate, but it’s for battery installation only. Instead of trading STCs, your solar installer sells PRCs on your behalf to polluting companies looking to reduce their carbon footprint.
The battery rebate is only for eligible new battery installations in New South Wales. There’s a wide range of requirements for this rebate, but you could save as much as $4,000 off the cost of your solar battery.
If you’re interested in learning a bit more about the upcoming solar battery rebate, you might want to check out the following article titled, Everything You Need to Know About the Home Battery Rebate for NSW.
How Much Money Does a Solar System Save?
Energy Bill Reduction:
An 11kW system can generate between 40 and 50kWh of electricity per day, depending on your location, weather conditions, and time of year.
For a family of four, this is enough energy to significantly cut down your energy bills. You could save between $1,500 – $3,000 annually on energy bills.
Feed-in Tariffs and Variable Feed-in Rates:
When you generate more electricity than you can use, you have the option to send it back to the grid and get paid for it.
- Feed-in tariffs: Your energy retailer offers these for customers. The typical rate at which they buy energy from your system is between $0.05 – $0.10 per kWh. This varies from retailer to retailer.
- For an 11kW system, exporting excess energy can add up to an extra $500 or so per year.
Total Annual Savings:
- When you combine the savings from a system with feed-in rates and tariffs and savings with a battery, you could be saving as much as $3,500 give or take a few dollars.
If you’re interested in learning a bit more about the cost of an Enphase solar system, you might want to check out the following article titled, How Much Does a Microinverter Solar System Cost?
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What’s the Payback Period for Solar Panels in Australia?
Payback Period:
For most Australian households, the payback period for an 11kW system is between 3 – 5 years. This depends on the cost of your system, your electricity usage, and different feed-in rates.
Long-term Savings:
Solar panels are warranted for 25 – 30 years depending on the manufacturer. Many solar panel warranties are 25 years for the product and 30 years for performance.
This means after 3 – 5 years, after your system pays for itself, you can enjoy 20 or so years of free electricity. This will lead to significant savings. And nowhere does it say that you have to stop using those panels after 30 years. They will most likely keep going for you after the warranty expires.
Maximising Your Return on Investment:
To make the most out of your system, you can shift your energy usage to take advantage of solar power. Use more electricity during the day for running appliances with solar power.
It reduces your reliance on the grid and makes better use of your energy. If you add a battery to that, you’ll save even more; however, that will extend your payback period because of the additional upfront cost.
If you’re interested in learning a bit more about solar payback periods, you might want to check out the following article titled, What is the Payback Period for Solar Panels in Australia?
What’s the Environmental Impact of Solar Panels?
Solar panels are a form of renewable, clean energy. It comes from the sun and the sunshine doesn’t cost anything and doesn’t pollute anything.
Reduced Emissions:
By generating your own power, you’ll rely less on the grid. The grid supplies electricity that’s generated at coal-fired power plants. The emissions from burning fossil fuels are a major source of greenhouse gas emissions.
Solar panels offset about 50g of carbon dioxide for every kWh of energy they produce. That’s about the weight of an egg.
An 11kW solar system can offset around 730kg of CO2 per year. It’s the equivalent of taking two cars off the road for a year.
Australia’s Solar Potential:
Australia has some of the highest solar irradiance levels globally. Solar panels can generate more energy here than in other places worldwide. We have the ideal conditions for solar.
All year round, we’re absolutely drenched in sunlight. Compare this to countries in Europe, where solar and battery systems are a big focus – even though (in winter) some places only get 4 to 6 hours of sunlight a day.
Here in Australia, we often take our abundant sunlight for granted. It’s such a reliable source of energy for us, far more so than in many other parts of the world.
If you’re interested in learning a bit more about which way to point your solar panels, you might want to check out the following article titled, Which Way Should Solar Panels Face in Australia?
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What Factors Affect the Value of a Solar System?
Location:
As we mentioned, some areas of Australia get more direct sunshine than others. Systems in these areas will see the greatest savings than systems in other areas. There’s just better, more consistent sunlight that leads to greater efficiencies.
Seasons:
There are seasonal variations to consider as well. Energy output will be higher in the summer months. The days are longer, and the sun is high in the sky. However, even in winter, an 11kW system will still produce enough to cover most household needs.
Roof Orientation:
In Australia, we’re in the vast and beautiful Southern Hemisphere. That means that the sun is to the north. For this reason, northern-facing roof space tends to receive the most sunshine consistently throughout the year.
However, there are other orientations to consider: an east/west split will always produce better energy for your home in the morning and evening. Especially in summer. When the sun is high in the sky for half the year, southern-facing panels will produce too. But they will drop in efficiency at different times of day or year.
Shading:
Shading from trees, buildings, chimneys, and anything else that obstructs the panels will reduce energy production. If you invest in an Enphase microinverter system, shading will be less of a problem. Other systems just can’t handle shade efficiently.
Make sure your roof is assessed for shading when you’re designing it with a solar consultant. Also, remember to cut back branches as they grow out over time.
Roof Size:
A larger roof is preferred for solar systems. An 11kW system will require more space because there are more panels than there are in a smaller system. More panels mean more energy from the sun.
A small roof is not entirely a deal-breaker: consider high-efficiency panels that can generate more power per square metre. You could also explore ground-mount solar.
If you’re interested in learning a bit more about how microinverters compare to string inverters, you might want to check out the following article titled, Microinverters vs. String Inverters: A Transparent Comparison.
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Additional Benefits of Solar Panels
Increased Property Value:
Solar panels are an attractive feature if you’re selling your home. They last a long time with warranties up to 30 years. You do not have to replace solar panels after 30 years. They degrade naturally, but after 30 years, they’ll still produce around 90% efficiency.
All that free energy is something a potential buyer would love. This is especially true in areas where energy costs are high and where Australian irradiation conditions are ideal.
Low Maintenance:
Solar panels are warranted for up to 30 years. They are intended to be left alone up on the roof.
Panels are installed at an angle to allow rainwater to flow across them and keep them clean. Dirt, bird and bat droppings, and occasional debris can build up. Cleaning the panels a couple of times a year is a good idea. This is especially true if you live in an area without much rain.
If you’re interested in learning a bit more about the benefits of microinverters, you might want to check out the following article titled, What Are the Benefits of an Enphase Microinverter Solar System?
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When Are Solar Panels a Bad Idea?
Upfront Costs: The initial investment for an 11kW system can be a lot for some families. Government incentives help, but the price is still significant for many households. However, there are green loans and financing options to help Australian families produce, store, and consume their own energy.
Aesthetics: Some homeowners dislike the look of solar panels on their roofs. Appearances mean more than savings for some. However, newer designs are sleeker and more integrated than older models. At Penrith Solar Centre, we install Trina All-Black panels that are a sharp addition to any roof.
Weather Risks: While panels are durable, extreme weather events like hailstorms can occasionally cause damage. There are other potentially damaging things in the sky besides hail to consider as well. We recently had a customer who had a panel in his system stop working. He lived close to a golf course. We figured this one out quickly.
If you’re interested in learning a bit more about the importance of a good installer for your solar (the most important component of any system, seriously), you might want to check out the following article titled, In-house Installers vs. Subcontractors: Which is Better?
Conclusion: Are Solar Panels Worth It?
Yes, for most Australian households, an 11kW solar panel system is absolutely worth it.
The Benefits:
- Save up to $3,500 annually on electricity bills and feed-in tariffs.
- Reduced emissions and reduced reliance on fossil fuels.
- Increase your property value while enjoying energy independence.
When They Might Not Be Ideal:
- If your roof is shaded, too small for a large system, or you don’t plan to stay in your home for several years, the payback period may not work in your favour.
Next Steps:
Get quotes from reputable solar providers, compare feed-in tariffs, and use an online solar calculator to estimate your potential savings.
At Penrith Solar Centre, we believe in what solar panels will do for customers and what they will do for the planet. We know a thing or two about this, we do it every day.
If you’re interested in learning a bit more about the process of choosing components for your solar system, you might want to check out the following article titled, How to Shop for a Solar System.
