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Even before soaring energy prices began to place cost-of-living stressors on Australian households, the economic and environmental benefits of installing solar panels were well known. Australia has the highest rate of installed solar PV per capita in the world, according to the International Energy Agency (IEA).
It makes sense then that solar power is popular in Australia because we have a high socioeconomic demographic and an abundance of sunshine.
And with the October 2022 federal budget forecasting that electricity will jump by 56% and gas by 44% over the next couple of years, there has been something of a scramble for solar panel installations among those who can afford the up-front costs. Installation companies have reported a 750% jump in enquiries since the budget was released.
The higher prices of traditional energy sources hastens the payback time of solar and batteries, because solar customers save on bills.
However, while solar presents exciting possibilities of virtually free, clean energy, it is important to research what is involved before making a purchase. There are several variables that will influence the overall potential of solar power, and there are different cost options too.
Does your home receive direct sunlight for several hours each day? Homes in high density areas may be left in the shade by tall buildings. Even periods of sustained rain and cloud will make the panels less efficient, which means taking longer to recoup the upfront investment.
For many, the benefits of using solar power are not solely financial: lessening a household’s reliance on fossil fuels from a carbon emissions standpoint is reason enough to make the switch.
How Much Do Solar Panels Cost?
There are many variables when it comes to determining the cost of installing panels. Factors to consider include where you live, the retailer, the size of the solar power system and how many panels will be installed.
The price is largely determined by the number of kilowatts and the quality of the hardware. The average price starts from about $4000 for a four-kilowatt system and goes up to around $10,000 for a 10 kilowatt system.
The good news is that prices in Australia are dropping and are forecasted to continue to do so, according to SolarQuotes. Its Solar Price Index provides real-time, average prices for full system installations in different states and territories.
Are Rebates Available?
There are many rebates schemes available for homeowners. To view eligibility for each of the schemes, check this comprehensive rebate list.
Many of the solar rebate schemes that were introduced around a decade ago have been phased out by state governments, or will come to an end in the next few years. This is particularly true of tariff rebate schemes. With uptake so high, the need for rebates has been reduced.
In New South Wales, homeowners can swap out their low-income household rebate for a fully installed three-kilowatt solar system. Some conditions apply, such as being limited to certain areas.
Victoria has the Solar Homes Program which provides various rebates, including a solar panel rebates of up to $1400 plus the option of an interest-free loan for rental properties. There are also point-of-sale discounts for solar batteries.
The Northern Territory has the nation’s most generous solar battery subsidy. Eligible homeowners and businesses can access a grant of $450 per kilowatt hour of useable battery system capacity, up to a maximum grant of $6000.
How Much will Solar Panels Save Me?
The amount of savings will depend on different factors, such as the amount of sunlight the panels are exposed to, the size of the unit and how much the retailer credits customers for electricity exported to the grid.
It is estimated that a household in the five major cities across Australia with a six-kilowatt system that gets five hours of sunlight a day and exports half of that power back to the grid can save between $600 and $1000 per year.
Buying a battery means a higher up-front cost, but conversely the savings will be greater over the long term.
Are Cheap Solar Panels Worth It?
A good quality system should last around 25 years, but a lower end brand is less likely to last that long and may require more frequent repairs.
According to the CEO of Queensland Solar and Lighting, Daniel Jarrett, cheap solar panels are simply not worth it because they will break and need to be replaced.
“Often cheap brands of solar panels need to be fully replaced after just four years. A good quality set of panels will last for the duration of the 25 year warranty,” he says.
“The main problem is that rainwater gets in and kills them. If there is a short circuit, it can also become a fire hazard.”
Frequently Asked Questions (FAQs)
Can I earn money from solar panels?
Earning money from solar panels is less viable than it used to be because the feed-in tariffs are lower than they were a decade or so ago.
Back then, a household could make a couple of thousand dollars selling solar power – but Jarrett says to bear in mind that the upfront investment was around $50,000.
Another factor to consider is that installing solar panels will increase the value of a property when it is sold.
Are solar panels worth it?
The initial setup costs of solar power can be high and it can take years to recoup the investment. On average, it takes between eight to 10 years to see the cost benefit of installation, and with a battery it can be longer still. A high-end unit with a battery can cost up to $20,000.
It will also require regular maintenance, and there will be some degradation of the unit over that time as well, so it will not work as efficiently.
“I think that solar panels are worth it because with power prices tipped to go up by 50% next year, a system that saves you two grand this year, will save you three grand next year,” says the CEO of Queensland Solar and Lighting, Daniel Jarrett,