How Much Does Solar Cost?

The average cost of installation and the entire solar system ranges between $15,000 and $25,000.  However, solar costs depend on the number of panels, quality of the system, expected output, and various other factors.

Solar installations are popular in residential and commercial areas of Australia because of the increasing cost of sourcing power from the electricity grid.

Solar is an excellent alternative to the electricity grid because of its cost-effectiveness and the abundance of sunlight in Australia. 

While solar power is earth-friendly, it is also a long-term investment that can last for years. 

So if you’re planning to use solar in 2022, knowing the exact amount to set aside can be tricky since various factors influence the cost of solar installation. 

In this article, you’ll learn how solar pricing works, the cost of solar panels in Australia, how to reduce solar costs, and more.

Let’s begin! 

Solar panels cost in Australia

Solar panels in Australia can cost between $2,900 and $14,100 depending on the solar system size, location, brand, and quality. 

When the government rebate is applied, the average cost of a 5kW solar panel, for example, is $5,250. 

According to the Australian Clean Energy Council (CEC), the following is the estimated price of solar panels. 

Solar costs according to the size of the solar system

The size of the solar system dramatically determines how much you pay for solar panels. 

  • 2kW solar system size costs around $2,800 – $5,600
  • 3kW costs around $2,900 – $6,950
  • 4kW costs around $3,400 – $7,900
  • 5kW costs around $3,500 – $9,500
  • 10kW costs around $7,600 – $14,100. 

Solar costs according to location

Where you live in Australia will also determine how much you pay for solar panels because the number of peak sun hours is different in each state. 

For instance, a 5kW solar system costs around $11,000 in Darwin. 

In Perth and Sydney, the 5kW solar system costs $5,000 and $6,000, respectively. 

Cost according to the quality of the solar panel

Solar panels come in basic and premium qualities because energy output and longevity differ from one manufacturer to the next. A 5kW monocrystalline solar panel will cost higher than any other variant.

There are three variants of solar panel cells, which are mostly made of silicon.

The first one is monocrystalline solar cells, which are the most efficient. They are extracted from a single silicon source. 

Polycrystalline is the second most common type of solar cell. However, it is made from a mixture of multiple silicon sources, thus less efficient. 

Lastly, thin-line cells are the cheapest alternative made from newer materials. However, they consume more space, are fragile, and are less efficient than Polycrystalline cells.  

At Instyle Solar, we only work with brands that supply high-efficiency solar panels among the top 2% of the best-performing products in the world. 

Solar costs according to daily consumption

The average Australian household consumes 18-19kW per day. But larger homes with heavy-duty air conditioning systems, pools, etc., would need a 10kW system with about 37 panels to generate about 42kWh of electricity every day. If you live in Melbourne, a 10kW costs about $8,000.

But that’s if you want to shift your energy consumption to solar entirely

Otherwise, you may use power from the electricity grid at night and switch to solar energy during the day to save costs.  

Here’s a detailed guide to determine what solar system size is right for you.

Cost according to additional components

Additional components like inverters, power/utility meters and battery packs can significantly increase the cost of installing solar panels in your home. While these additional components increase solar costs, they can also be rewarding. 

All solar panels need inverters. A premium 5kWh Fronius inverter could cost about $2,000.

A solar battery pack helps you store excess energy produced by the solar panel during the daytime to be used at night or on cloudy days. A 14 kWh Tesla battery could cost about $13,000. You could also take advantage of solar battery incentives to reduce the cost.

Power meters show you the amount of power used from the grid and sent back to the grid. Most inverters come with a standard monitoring system to give you basic information on power production and consumption. You could add a smart meter for extra details like alerting you if your system is underperforming. Additional monitoring helps you figure out what’s wrong with your solar system.

Your electricity provider will pay a feed-in tariff for the excess energy you send to the electricity grid. 

How many solar panels do you need?

You will need around 20-25 solar panels to generate 5kW. However, the number of panels you need depends on the size of your household, your geographical location, and the panel’s capacity. 

Contrary to popular opinion, the quality of solar panels determines the amount of electricity generated, not the number. 

That is, you can produce 5kW of electricity on 20 solar panels if each one produces 250w. Similarly, 25 solar panels that generate 200w each will also produce 5kW. 

Also, the size of your rooftop affects the number of panels you need. This is because solar panels differ in size, with thin-film cells being the largest. 

Therefore, installing 20kW of thin-line solar panels will require a large amount of roof-top space. 

If your home doesn’t have enough space, your installer may advise you to select a smaller cell type or reduce the required capacity. 

In addition, the amount of sunlight in your location determines the number of power your solar panels would produce. 

Since Australia enjoys a massive amount of sunlight, you will get enough power for your panels in most locations. 

You can use this solar calculator to determine how many solar panels you’ll need.

How much does it cost to install solar panels in Australia? 

Solar panels installation costs $5,250 on average in Australia after applying the government rebate. 

The cost of installing your solar system depends on your location and the number of panels needed to meet your energy consumption needs. 

We have covered this in the previous sections. Other factors that affect the solar installation cost in Australia include the following.

Type of equipment

The solar energy that a solar panel produces per unit size (power density) determines the cost. Therefore, the more dense the panel, the higher cost per watt. 

Type of roof

You can install solar panels on any type of roof, but the installation process and the type of equipment required differs. Hence, installers can charge you more if your roof type is considered laborious. 

Interconnection process

Connecting your solar panel system to the community power grid to benefit feed-in tariff rates is essential. 

But the cost of this process can significantly increase the cost of installing solar panels. 

The requirements for each local utility vary. Also, the distance of your home to the connection point may increase the cost.

Aftersales services

After the installation, you need to contact the installer company to monitor the solar system’s performance. Including after-sales services in your budget is essential. 

Solar system installer in Instyle Solar uniform

How to reduce solar installation costs in Australia

A high-quality solar panel can reduce your bill for as long as 30 years. 

However, installing one requires a significant upfront cost. 

These are some innovative ways to reduce the cost of solar installation in Australia. 

Finance your solar installation

Organisations that offer loans, PPAs, and micro-leasing opportunities can help you with funds to reduce the cost of solar installation. 

For example, a Green Loan is a credit provided by a financial institution on the condition that you use the funds for an environmentally friendly purpose, such as installing solar panels.

Green loans interests are lower when compared to personal loans. Banks and microcredit organisations like Plenti in Australia offer green loans.

You have to be an Australian and have a high credit score to qualify. The lender considers factors like your income and whether you have filed for bankruptcy. 

You can also explore the option of a Power Purchase Agreement (PPA).

Unlike green loans, a Power Purchase Agreement (PPA) is not a loan. Instead, PPA allows you to enjoy the benefits of solar panels without an upfront cost. 

That’s because PPA organisations take full ownership of the solar system. They service it and also cover all the maintenance costs. 

All you have to do is purchase the electricity produced by the solar system, often at a price lower than usual electricity tariffs. 

When you’re ready to switch to solar panels, see if you qualify for green loans or PPAs to reduce installation costs. 

Optimise energy consumption at home

Reducing the amount of energy consumed in your home is a great way to reduce the cost of solar installation. This is because solar electricity works just like power generated from the grid, only cleaner. 

The amount of solar power required is equivalent to the rate of electricity consumed from the grid. 

Let’s say you use around 20kW daily and need to switch entirely to solar PV; your budget will be around $8,000 to $12,000, depending on several factors.

However, reducing the number of units consumed daily can help you save more on that budget. This doesn’t necessarily require that you sacrifice comfort. Instead, you need to make some energy-saving choices. 

One way to do that is switching from halogen and incandescent light bulbs to energy-saving LED bulbs. 

Similarly, turning off electrical appliances when they are not in use reduces power consumption. 

Another effective way to reduce the cost of solar installation is to switch old power-consuming appliances to modern energy-saving versions. 

Optimise energy consumption on your own this way. You’ll be able to determine the exact unit of power required for your daily needs.  

With that calculation, solar installers can recommend a budget-size solar quote

Take advantage of solar incentives

The Australian government rewards small and large installations under its Renewable Energy Target (RET), 

As a residential user, the Small-Scale Renewable Energy Scheme (SRES) issues a Small-scale Technology Certificate (STC) once you install a solar unit under 100kW. 

STCs are calculated based on the solar system’s predicted output. But the STC refund will be phased out by 2030 

One megawatt-hour (MWh) of renewable energy is equal to one STC. 

To calculate your STCs, you’ll need to figure out how much MWh your system produces each year until 2030.

The amount of financial incentive you derive from your STC varies depending on your geographical location. 

You can expect a 91 STC If you install a 6.6 kW solar system at your home in Melbourne today. Although its value fluctuates, one STC currently costs $39. At that price, 91 STC equals $3,549 worth of financial incentive

So, depending on the cost of installing a solar panel, you will get a certain percentage back in the STC incentive. 

You can learn more about government incentives for your state here.

Compare prices among solar installers 

To reduce the cost of installing solar, compare quotes from various installers to get the best deal. 

However, it is best to find installers that offer a fair price without compromising on quality. 

Instyle Solar has 4.7 of 5-star ratings on Trustpilot. We have helped many homeowners save with solar and maintained a high-level service delivery since 2014. 

Install solar system batteries 

Although solar system batteries cost more, installing one is efficient to save more on electricity bills. 

Without the battery, solar power is active during the daytime only.

Depending on the size, solar system batteries can store enough power during the daytime for you to use at night. 

This way you can save more money on your electricity bills. 

You don’t want to buy a solar battery that is too small or too large for your solar panels. In the same way, you don’t want to buy solar panels that are too little or too huge. 

So, for instance, a 400Ah battery will last between 4 and 16 hours, depending on the capacity of your home appliances. At 50 amps, you can expect a 400Ah battery to last 16 hours. 

How much savings should you expect after installing solar 

Given the abundance of sun in Australia, you will save a lot of money on your electricity bill after installing. For instance, a 6.6-kW solar system that generates around 10,000 kWh per year can save about $1,400 – $1,600 yearly. In 20-years, you can expect to have saved $28,000 – $32,000. 

But calculating the exact figure is tricky because of many factors. 

Your electricity tariff changes constantly based on your consumption habits. 

So, the first step to understanding how much you can expect to save with solar is determining the average unit of power consumed. To do that, divide the unit of electricity used over some time by two. 

Your solar savings will also increase over time as the electricity tariff increases. 

Over time, solar panels pay for themselves by lowering your power cost and, in some cases, earning you money through feed-in tariffs. 

Solar panels in Australia have a payback period of 5 to 8 years, depending on where you live.

For instance, it takes 5.4 years to regain the cost of a 5kW solar system in Brisbane and 7.4 years in Melbourne.

Solar panels are well worth investing in, even with Hobart’s highest payback period of 8.2 years. 

The payback period will most likely be much shorter if electricity prices continue to rise.

Will the cost of solar decrease?

The cost of solar is higher than usual at the moment in Australia, but a significant fall in decrease is expected in the coming year.

While switching to the solar system after the price falls is plausible, you may miss out on the high value of solar rebates today. 

Similarly, investing in solar panels will start reducing your cost of electricity tariff from the first day, so it’s best to start now. 

Australia is a booming market for solar installation, with over 3 million households generating energy with the rooftop Solar PV system. 

Federal support through incentives and tax credit and an abundance of sunshine are the primary motivations for adopting solar in Australia. 

However, solar installation prices increased in 2021 due to the COVID19 pandemic, global shipping crisis, and the energy crunch in China that disrupted the production and distribution of solar in Australia. 

Nevertheless, experts have projected that Australians will enjoy low solar prices by 2023

A surge in the manufacturing capacity of PV in China and Australia’s steady recovery from the pandemic are reasons for this prediction. 

Solar system installer in Instyle Solar uniform holding a solar panel

Conclusion

Solar pricing in Australia depends on the number of energy units required to meet your needs, location, and quality of the solar panel and types of equipment. 

Despite the high upfront cost, solar panels pay for themselves within 5-8 years in Australia.  

To get the best out of solar panels, ensure to optimise the energy consumption at home, consult various installers, and take advantage of federal government incentives. 

Lastly, solar installation is booming in Australia. The best time to install solar is now. Contact us now to start saving on electricity.  

Next Steps…

Interested in solar? By clicking below you can use our smart solar calculator to find out just how much you could save with solar, what rebate you are eligible for, and the impact you will have on the environment.

Don’t wait until next quarter’s bloated bill, and get started today!

Click here to calculate your solar savings!

Join over 20,000 homeowners who have made the switch with Instyle Solar, or the 1000+ positive reviewers who have been more than happy with their solar install.

Otherwise, you can always contact us on 1300 133 556, or email if you prefer at [email protected].

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