Solar energy system prices vary. Various factors influence how much solar panels cost. For example, your roof space, the type of system installation, and state incentives you’re eligible to receive.
The most important factor is the system size. This is measured by the kilowatt (kW) capacity of the solar panel array. The greater capacity you install, the higher the average cost.
The good news!
Solar panel prices and overall installation costs in the solar marketplace have decreased in recent years. Compared to 10 years ago, nowadays you get a lot more solar panel capacity for your money. It’s more cost-effective than ever to install a solar energy system now and reduce your electricity bills.
The solar market has evolved rapidly. And you are still eligible to receive a generous subsidy from the government for your solar investment through the SRES (Small Scale Renewable Energy Scheme).
Based on current installation costs in 2020, you can expect to save around $555/kW of solar panel capacity through the SRES rebate. The Australian government calculates the rebate value based on the value of an STC (Small-Scale Technology Certificate). The value of an STC is currently $37. It’s an incentive to encourage the development of the Australian solar industry.
The maximum rebate for investing in a home solar installation is $3,100. This helps reduce the total system cost. And means that the solar panel payback period will be shorter than if there was no solar rebate.
How much do solar panel kits cost?
Prices vary, so it’s best to get several solar quotes from different installers. First, a word of advice: it’s best not to consider a DIY solar energy system even if they are available. Installing a solar energy system requires technical expertise and a lot of knowledge to get the best results.
It’s not only the electricity generating capacity of the solar power system that affects the price. The brand of solar panels and inverter, as well as the level of difficulty of installation, also affect the cost of the installation process.
But here’s a price guide to get a good quality solar energy system installed, based on average prices. The prices shown do not reflect the cost of including solar battery storage.
|3||10||$3500 – $5000|
|4||14||$4000 – $6000|
|5||17||$4500 – $8000|
|6||20||$5000 – $9000|
|8||27||$7500 – $11000|
|10||33||$8000 – $12000|
* Prices after SRES rebate applied
** Based on 300-watt solar panels and market prices in January 2020
When choosing the optimal size of the system for your home, you need to think carefully about various things:
- electricity usage
- when you use it
- space available for solar panels
- geographic location
- And you also need to decide if you want an on-grid, off-grid or hybrid solar power system. Solar battery storage is still an expensive option for most people and only necessary in certain cases. Your solar installation company will be able to advise if solar energy storage is a good idea based on your home and needs. They will also consider your energy usage, and how you intend to use the system.
Determine your energy consumption and the type of system you want to install, then get quotes for the solar energy system. Contact a minimum of three solar installers, to get a good idea of the prices for a solar installation in your area.
Pay attention to the details about the brand, size and design of solar panels in the system. Also, check the type of inverter proposed for the system. This is the component which will most likely fail in any solar energy system. So make sure it’s high-quality and comes with a comprehensive warranty.
How does the type of inverter affect the cost of a solar energy system?
A solar energy system that uses micro inverters is more expensive than a system that uses a string inverter. The advantage is that the output from each solar panel is optimised. But this greater efficiency comes at a price. Expect to pay around 20% more for a solar energy system with high-quality micro inverters.
Installing a high-quality inverter is recommended. There are some excellent brands like GOODWE, SUNGROW, and DELTA. The inverter in a solar power system is in constant use, and will eventually wear out. This usually happens after about 10+ years. A high-quality unit, with a comprehensive warranty, should be your priority to ensure hassle-free operation during the first decade.
What about using a cheap inverter?
Yes, you could opt to choose a cheaper brand of inverter. It might save you about $700 on the estimated prices shown in the table. But any initial saving might be eliminated if there are issues with the unit later. It might require costly repairs or even replacement.
You should always choose quality over saving a few hundred dollars on installation costs.
A well designed solar energy system with high-quality components will generate free electricity and operate without issues for many years. That’s ideal!
What’s the best way to buy a solar power system?
Installing a solar energy system is not cheap. But it is a smart investment in the long run. Because it’s a long-term investment, quality matters more than the initial price. With solar installations, you get what you pay for.
Go cheap and you’ll pay more in repairs and problem-solving in the long run. In contrast, a well designed good quality system installed by an accredited installer will provide many years of trouble-free operation and optimal energy savings.
Two important tips
You need to understand the solar payback period and how best to use any system you install. Your installer should provide you with a detailed payback analysis. This will show you how long it will take to recover the initial cost of the system installation.
Learn when you should use the solar electricity generated and when to export it. When you export solar electricity you’ll receive payment from energy companies through the FiT (Feed-in-Tariff).
With a clear understanding of these two critical points, you can decide if installing a solar power system is a good investment or not.
Beware of any quotes for solar energy systems which seem too good to be true price-wise – they probably are!
Yes, there are cheap systems available on the Australian solar market. But they usually consist of sub-par components and solar installers may not provide the optimal design of the system for your home.
We can’t stress enough that quality is more important than the initial cost. Installing a solar energy system which operates without problems for many years should be your goal.
Should I buy a solar energy system with cash or finance it?
The payback analysis provided by the installer is critical in answering this question. If the potential savings on your energy bills will be substantial, then you might find that the system pays for itself. You can finance the purchase through a loan or adding it to your mortgage. If the monthly savings are more than the additional monthly finance payment, it’s ideal.
Choose to pay the solar company in cash and you’ll have instant savings every month after installation. This is the best-case scenario. But we understand that not everyone has enough spare cash to finance such a purchase.
A low-interest loan or adding the cost of the system to your existing mortgage payment is, in most cases, a good solution.
You must understand the total cost of installing the system, optimising generating capacity, and ensuring that the payback period is short enough. You can then get the best possible deal and savings on energy costs and maintain long-term energy efficiency while generating solar electricity.