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.
Ready to get started? Compare your energy options with help from a broker
Solar Run is a solar retailer who can help you install solar on your rooftop.
- Get quotes for solar panels and battery storage
- Clean Energy Council approved retailer
- NSW, VIC, SA, QLD and ACT
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.
Solar Guides on Finder
Lower your household bills
Compare internet from over 50 providers in our broadband engine.
Check out our select picks of the best plans available.
Mobile broadband is fast becoming a viable alternative to fixed line.
Ask an Expert