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How Much Does a 5kW Solar Energy System Cost in Australia?

You might have seen lots of advertisements for a 5kW residential solar system installation for less than $4,000. But beware! You only get what you pay for.

But, you won’t get a premium solar energy system unless you’re prepared to spend at least $5,000 upwards. This will get you a quality system that is durable and should serve for many years without issues.

You can install a cheaper system by hiring a company that will install solar panels and other equipment from unknown brands. But you can also be sure that you’ll be in for a headache when you need technical support or replacement parts. And, you might even find the company no longer exists or the components used are out of production when you try to get help.

Before you buy a solar energy system for your home, consider the following points:

  • If you get several quotes from reputable solar energy companies in your area, you’ll normally find that they’re pretty close in price. Some of the brands they use, the level of service provided, and warranty details may differ, but they’ll all be around the same price.
  • Recent advances in solar energy technology mean that you can now get a top name brand system fitted by experienced installers for around $5,000. What you won’t get is a $6,000 or $8,000 solar energy system on sale for $4,000. It just doesn’t happen!
  • The price of solar panels from the top brands in the industry has dropped significantly in recent years. Why? Because the demand for solar energy systems has increased.

So it’s not unreasonable to expect to install a solar energy system for your home using well-known brands. Or to get it installed by a reputable company offering full technical support.

And you should expect the payback time for your initial investment to be around 3-5 years. Nowadays, you shouldn’t settle for anything less!

Why is all the talk about a 5kW system?

The average household consumes around 20 kWh daily. A 5kW solar energy system is the optimal size of solar energy system to meet that need.

How much does a 5kW solar energy system cost?

Before thinking about other critical factors in choosing the right system for your home, let’s get straight to the point.

A residential 5kW solar energy system costs around $5000 installed.

If you opt for the latest and most advanced high-efficiency solar panels, expect to pay around $9,000. This type of system has the potential to save you around $500 on your quarterly electricity bills.

It’s not just about price – there are other factors to consider, which we’ve outlined below:

What’s the output of a 5kW solar energy system?

The Clean Energy Council Guidelines state the output of a 5kW solar energy system as 20kWh per day. This is the 12-month average. When there is more sunlight on summer days, the output will be higher. And when the weather is overcast or cloudy, the output will be lower.

Your electricity consumption during the day is an important factor to consider. As a guide, if you typically receive a $600 – $1,000 quarterly electric bill, you will be able to maximise the use of a 5kW solar energy system for your home.

Do I need a battery for energy storage​?

If you include battery storage in your solar energy system. You’ll be able to store the electricity generated during the day, and then use it at night. And it will allow you to run your home almost entirely using the solar power your system generates. This is a good option if your home is typically unoccupied during the day, meaning minimal consumption of electricity during the day.

Note: You should consult an expert about the optimal size for battery storage. This will ensure you make the most of the electricity generated by your system.

What happens to the solar electricity if I don’t use it?

If you don’t consume much electricity during the day, you can export around 75% of your solar-generated electricity to the main electricity grid. Even if there are people at home during daytime hours, you may still be able to export around 50% of the electricity you generate.

Solar panel orientation

The capacity of a solar energy system to generate electricity peaks when sunlight directly shines on the panels. If you have a solar array installed that is north facing, this peak period will typically last for four about 4 hours in the middle of the day. The system will continue to generate electricity at a lower rate even in the early evening in some locations, as it catches the late afternoon sun.

It’s also important to remember that daily power output will vary considerably. This will depend on the weather, time of year, and location.

How many solar panels do I need?

What’s important is the total power output of your solar energy system.

Solar panels vary in size and output capacity. So you could use 1 or 2 high-efficiency, high-output panels if you have a small roof space. Or if space is not a limitation, you could install many smaller and cheaper solar panels – and still achieve the same power output from the system.

Tip: it’s cheaper to install fewer higher-quality panels.

We mentioned earlier that the technology used in residential solar energy systems has reduced in price in recent years. What does this mean for consumers? Top brand, high-efficiency solar panels from companies like LG Solar are now more affordable than ever.

These are typically 300W solar panels, so you will need between 15 to 18 of them for a 5kW solar energy system. These, and similar solar panels, can be installed using either a string inverter or micro inverter as part of your solar energy system.

How is a string inverter different from a micro inverter?

There are different types of solar systems. The inverter is the device that converts the DC electricity generated by a solar panel into AC electricity, which is what you use in your home.

A solar energy system with a string inverter consists of a series of interconnected solar panels linked to a single converter. The inverter then converts the electricity supplied by all the panels from DC to AC.


  • only one inverter which can fail
  • cheaper than multiple micro inverters

In a system that uses micro inverters. Each solar panel is fitted with a micro inverter that converts the electricity from DC to AC.


  • optimisation of each solar panel output
  • micro inverters typically come with a 25-year warranty

Which is the best solar PV system?

Honestly, there’s no simple answer. Many factors can influence which solar energy system you should choose.

You should always consult an expert to help you determine the best option for your particular circumstances.

But, in general, 5kW solar panel systems which include the following will offer optimal power output and flexibility:

  • a solar array with optimised panel orientations to maximise the capture of sunlight
  • micro inverters to optimise the efficiency of each panel
  • battery storage to allow electricity to be stored and consumed after daylight hours

When would I need a system bigger than 5kW?

In many places, the average system size is bigger than 5kW. Why?

The costs of installing solar energy systems have come down. At the same time, the FiT (Feed-in-Tariff) has increased – more than doubled in fact. This makes exporting excess electricity to the main power grid even more beneficial.

People take advantage of the lower costs and generous rebates from the government to invest in larger solar energy systems. With a battery storage feature, you can power extra appliances. For example, a pool pump, spa and even your air-conditioning system, by solar power. If you install an adequate solar array and can store the electricity generated, this form of renewable energy can allow you to be energy independent.

One of the fastest-growing sectors of the industry is the upgrading of existing grid connected solar energy systems. More people now want to including battery systems to store the excess electricity generated.