How much does it cost?
The cost of installing a solar system can start from $4,000 on the small end and cost up to $20,000 for a larger sized system. It depends on a few things including:
- System size
- Potential payback and rebates
- Your property
Upfront cost vs the return you get
A typical 5 kW solar array will cost about $6,000 to install. This could produce around 20 kWh per day.
Are you willing to wait to get a return on your investment?
Depending on where you live, you may be able to save up to $1,500 per year off your power bills through a combination of solar feed in tariffs and relying less on power from the grid.
Add to that any federal or state rebates for installing the system, and you would normally be looking at around 3-6 years for your solar setup to pay for itself.
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Note: Solar service not available in the Northern Territory, Tasmania and Western Australia.
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1. What rebates and incentives are there for solar power?
There are three main rebates that exist to encourage people to switch to solar power: federal rebates, state government rebates, and feed in tariffs.
- Federal rebates. The federal government will reimburse you for installing your solar system, with more powerful systems attracting larger rebates. These incentives take the form of small-scale technology certificates that are worth about $40 individually, explained here. The rebate is set to decrease annually until it hits zero in 2030, so the sooner you install solar the better.
- State government rebates. These are rebates provided by individual state governments to assist with increasing the number of solar users. Current subsidies for solar panels are provided by the Queensland and Victorian governments, while help with the cost of battery installation is available in Queensland, Victoria, the ACT, and South Australia.
- Feed in tariffs. Solar feed in tariffs are provided by your energy retailer, who will refund you a certain amount per kWh of excess solar energy you feed back into the grid. Tariffs vary widely by state and power plan, but typically run somewhere between 5 - 21c/kWh. Feed in tariffs are particularly useful when you don't use as much power as you produce or have a solar battery to feed energy back into the grid over time.
2. How does your property impact whether you should get solar?
Almost anybody can benefit from installing solar panels, but there are some important factors that will affect how much.
- Panel orientation. Since we live in the southern hemisphere here in Australia, you'll get the most sunlight with north-facing panels. Even if your roof doesn't have a north face, east and west facing panels will still produce a fair amount of electricity during the morning and afternoon, respectively.
- Panel angle. This is a relatively minor factor, but having panels around the same angle as your latitude helps maximise power output. For a flat roof, panels can be mounted to achieve an incline.
- Panel temperature. Hotter panels are less efficient. Higher quality panels will deal with heat better.
- Shading or obstruction. The less sunlight that reaches your panels, the less effective they'll be. Microinverters and power optimisers can help generation if some of your panels get blocked during the day.
3. What types of solar systems can I buy?
| Type | Description | Who is it for? |
|---|---|---|
| Grid-tied | The most common system. Power is used from your panels before it's used from the grid. Does not provide power at night. | Most consumers. These are a way to cut down power bills, boost the green level of your energy, and pay themselves off the fastest. |
| Hybrid/battery-ready | Hybrid systems function the same as grid-tied ones except they have backup batteries for the system to function at night. Battery-ready systems are hybrid systems where a battery has not been installed yet, but can be in the future. | People who want a bit more independence from the power grid, or like to have power stored for emergencies. |
| Off-grid | Completely disconnected from the grid. Off-grid systems are far more expensive and function through solar panels and a number of backup batteries. | Owners of properties that are too expensive to connect to the electricity grid. |
4. Is it worth getting a battery?
Buying a solar battery is tempting because it offers you quite a bit more freedom from the power grid as well as giving you a power store to draw upon in emergencies. The issue with solar batteries is that they're extremely expensive (starting at around $10,000) and will only pay themselves off in 10 years plus for the typical household, far longer than the 3-6 years of a grid-tied system.
Batteries may be worth it if you're planning to stay at a property for a very long time and enjoy greater power independence. The good news is that solar batteries are getting cheaper all the time, and you can set up a battery-ready system now and buy it later when the price has dropped.
5. Inverters: what are they and why do you need them?
Inverters are electrical components that convert the DC current produced by solar panels into AC power that can be used by your electrical appliances and such. Without an inverter, most of your devices would be unable to function off of the DC power produced by the panels.
The only thing a hybrid inverter changes is that it allows for conversion in both directions, so that it can both charge and drain a solar battery.
6. How can I pay for my solar system?
There are many ways to finance your solar panel system:
- Cash. If you can afford to pay upfront, it will save you having to pay any extra interest on a loan as well as invest your money in a system that has a relatively good return on investment after the first few years.
- Green loans. A green loan is a low-interest loan offered by a financial institution with an interest in renewable investment. You should be able to find one with generous and flexible repayment options over 1 to 7 years.
- Home mortgage. Adding onto your home mortgage will likely only give dividends if you plan to pay more than the minimum repayments. Compare the cost of a long-term home loan against the cost of a short-term solar loan.
- Rent to own. Under this scheme, the company which leases the system to you owns it until you pay it off. This sort of buy now pay later scheme seems to amount to a no-interest loan but often comes with a substantially higher price built into the cost of the system.
- Power Purchase Agreements (PPA). A PPA means you get a solar system installed for no upfront cost, but pay for the electricity it produces as if were being sold to you by the power company (though usually at a lower rate). While this may seem like a good deal, you are generally contractually obligated to buy a minimum amount of power from the company, even if you don't need or want it.
- Personal loan. A regular loan with higher interest rates than a green loan or home mortgage. Some lenders may take into account what you're planning to use the money for and offer you lower rates because of it, and it leaves you in a situation where you're not beholden to a particular retailer or installer.
7. Are solar panels worth it if I'm not home during the day?
The answer to this is probably yes, due to the fact that solar feed in tariffs are much more generous than they were a few years ago. On top of the fact that you likely still use some percentage of electricity during daylight hours no matter when you're out, thanks to fridges and other static appliances.
As far as tariffs go, the electricity your solar panels are generating during the day that you aren't using will be fed directly back into the grid, earning you a refund on your energy bill that's much higher than it would be a few years ago. In addition, if you are investing in a solar battery, any energy you don't use during the day can be saved for later use or fed back into the grid in the same way.
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Ask an Expert
Can I have a list of feed in tariffs from companies?
Hi Margie,
Thanks for your comment and I hope you are doing well. While we review solar power providers in our pages, it’s helpful to know that we are unable to provide this on our site. It would be best to contact the customer service support of the solar power provider of your choice directly for further assistance.
Hope this clarifies and we hope they find a quick resolution for you!
Best,
Nikki
We live in SW Sydney and looking to install solar panels as we have a pool and ducted A/C. Can you point us in the right direction on provider comparison/s or is it best to speak with an energy broker, and if so, can you suggest any? We are currently with Red Energy but could/would change. Want to choose a reputable form for the panels as anecdotal evidence suggests many are here today and gone tomorrow – which is a major concern for after-sales service etc.
Hi Andrew,
Thank you for getting in touch with finder.
Kindly check out this page to start comparing your energy plan options in NSW. You may click on the green go to site button or enquire now to be redirected to the provider’s official page to learn more on what they offer to new consumers like you.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
I have a residential home in Western Suburbs of South Australia and looking to install a ~5kw solar system. Could you send me a list of solar installation companies who may be able to assist. Also looking into the storage/battery side of things as well. Want to spend between $5000 – $10000
Hi Mark,
Thanks for reaching out.
You may go ahead and click on “more info” on the supplier above if you need additional details. Most of the suppliers may be able to take care of the installation but you may need to speak with their solar experts to get specialised advised.
You may also view this guide so you can get more information on how you can choose the solar suppliers and installers.
Cheers,
Joanne
I am getting cold calls from companies wanting to instal solar panels on my leased business property, on a “rent to own” basis, with the overall costs purportedly slightly lower than my current energy bills. Generally overseas call centres. How do I find reputable local suppliers to quote?
Hello Belinda!
Thanks for your inquiry. :)
On this page, left part you’d see the list of providers we have per state under “Can I switch?”.
We recommend that you click which applies on your location. Afterwards, it will direct you to the page where we have listed the distributors on that state. You can click “Enquire Now” green button of your chosen provider.
Alternatively, you can also send an inquiry to an energy broker.
Hope this helps.
Cheers,
Jonathan
How do I compare my existing provider to a potential provider?
Hi Luis!
You may go to this page and click “Need assistance? Request a callback from an energy broker and compare plans” green button.
Hope this helps.
Cheers,
Jonathan
How as a renter can they access solar power?
Hi Gail!
You can check our full-guide for renters on this page and how they can access energy deals.
Hope this helps.
Cheers,
Jonathan
H
Can you supply a solar application form for Victoria?
Hi Mal,
Thank you for your inquiry.
To check the available energy options in Victoria you may need to visit this page for the list of providers.
I hope this information has helped.
Cheers,
Harold
hi i am looking for an electricity provider who has a great solar rebate scheme and cheaper prices than what i am paying at lumo cheers
Hi Diana,
Thanks for getting in touch.
Unfortunately, we do not have providers that you can compare at the moment. Although you may like to read our full guide to solar rebates available in Australia, which you may find useful.
Regards,
May
In 2012 I installed a small 1.5 kilowatt system for a two storey townhouse. I have been receiving a 68 cent rebate for FIT. I am now being told by my supplier that I should only be receiving 10 cents FIT. Where can I find out if this is correct. Also, if I install a new larger system, what would the current Rebate for feed in be? Thanks for your time.
Hi Bruce,
Thanks for your inquiry.
Solar rebates tend to change more frequently and the amount will vary according to your energy provider and your state location. I suggest that you contact your local government for the current rate of the rebates in your state. Furthermore, if you will change to a larger energy system, there will be a difference in the rebate you will receive. Whichever program permit you get, you will receive a credit through gross or net metering.
Gross metering – all of the solar electricity a home’s system generates is sent into the grid. You receive reimbursement based on every kWh of solar electricity your system produces.
Net metering – you receive funds according to the difference between the home’s usage and the solar electricity produced.
Cheers,
May
Hi
With the solar rebate ending are you doing a group deal with those coming off the rebate?
Hello Fresh,
Thanks for your question.
The rebates that may be available to you depending on your state and solar setup. Solar rebates are a tricky thing, and they tend to change quite frequently, so we’ve devoted an entire article to help you understand and get the most out of them.
I hope that helps.
Cheers,
Harold