Cost Breakdown Examples
Below is an overview of average costs after government rebates:
Note: Prices include installation and are after government rebates (STCs).
In 2024, the average system that Solaris Finance (owner of Solar Nerds trademark) customers purchased for their home is a 6.6 kW system. Below I’ll go over sample pricing for different scenarios.
Budget Option
- System Size: 6.6 kW
- Panels: Approximately 16–20 panels (e.g., Risen or JA Solar)
- Inverter: 5 kW budget inverter (e.g., Goodwe or Growatt)
- Typical Pre-Rebate Cost: $7,500
- Government Rebate (STCs): -$2,300 (based on the system size and an installation in a high sun exposure zone, such as Sydney)
- Number of STCs: Approximately 80 (depends on location and system efficiency)
- Final Cost to You: Approximately $5,200
Mid-Tier Option
- System Size: 6.6 kW
- Panels: Approximately 16–20 panels (e.g., Jinko Solar or Trina Solar)
- Inverter: 5 kW mid-tier inverter (e.g., Sungrow or ABB)
- Typical Pre-Rebate Cost: $8,500
- Government Rebate (STCs): -$2,300 (based on the system size and an installation in a high sun exposure zone, such as Sydney)
- Number of STCs: Approximately 80 (depends on location and system efficiency)
- Final Cost to You: Approximately $6,200
Premium Option
- System Size: 6.6 kW
- Panels: Approximately 16–20 panels (e.g., SunPower or REC)
- Inverter: 5 kW premium inverter (e.g., Fronius or SolarEdge)
- Typical Pre-Rebate Cost: $9,000
- Government Rebate (STCs): -$2,300 (based on the system size and an installation in a high sun exposure zone, such as Sydney)
- Number of STCs: Approximately 80 (depends on location and system efficiency)
- Final Cost to You: Approximately $6,700
Note: The rebate value varies based on the system size and the location of installation, as sunnier areas receive more STCs.
These sample quotes are indicative only and serve as general guidelines. Actual prices can vary significantly based on individual circumstances, including system components, installer choice, and installation complexity. This brings us to the factors that can influence the cost of a solar system.
Factors Affecting Solar System Costs
1. System Size
Larger systems obviously cost more, however, they offer better value per watt. Like most things in life, buying in bulk saves you more per unit.
2. Brand of Solar Panels & Inverter
Every year Solar Nerds attends trade shows, I see the exhibition floor flooded with new cheap panels and inverter brands that never existed before. Many of them disappear the next year.
In short, look for a reputable brand that has been in the Australian market for a number of years. We also have an extensive list of panels and inverters that we update regularly.
3. Type of Inverter
There are a few different types of inverters that can significantly impact the cost of your system. Most homes will need a basic string inverter, but if you’d like to add batteries in the future, you’ll need a hybrid inverter, which is more expensive. There are also other types like micro-inverters. If you’d like a longer explanation, feel free to check out our article on the different types of inverters.
Notice I didn’t mention the type of solar panel here—it’s because, for the most part, the type of solar panel is not a major issue. We’ve gone into more detail about the different types of solar panels in another article, but for the most part, you’ll usually be sold monocrystalline half-cut PERC panels.
4. Installation Complexity
- Roof Type: The type of roof significantly affects installation costs. Tiled roofs often require additional labor and materials compared to metal roofs, leading to higher costs. Multi-story homes also require extra safety measures, which can add to the overall price.
- Location: If your property is in a remote area, transportation and accommodation for the installation crew might increase costs. Additionally, challenging roof designs or obstructions like skylights can lead to higher installation complexity and costs.
5. Additional Components
- Solar Batteries: Adding a battery storage system, such as a Tesla Powerwall, can increase upfront costs by $5,000 – $13,000 but allows you to store excess energy for use during evenings or power outages. This can lead to greater energy independence and reduced reliance on the grid.
- Monitoring Systems: Advanced monitoring systems allow you to track energy production and consumption in real time. While basic monitoring is often included, more advanced systems may cost extra, but they can provide valuable insights to optimize your energy use and maximize savings.
Government Rebates and Incentives (STCs):
For an average home, government rebates and incentives can help lower the cost of your solar system by $3,000–$4,000. This is a rough estimate, but in general, the bigger your system, the bigger the rebate.
We’ve covered the Small-scale Renewable Energy Scheme (STCs) in detail, but in short, this incentive is applied as a discount by your installer, making solar more affordable from the start.
Furthermore, depending on your state, you may qualify for additional incentives. These specific incentives are always rapidly changing, and Solar Nerds keeps track of the changes in our continuously updated summary.
Don't Buy Too Cheap
Choosing ultra cheap solar systems might seem attractive, but it’s usually a bad choice. There is a price war going on in the solar industry at the moment, and many installers are slashing prices to win business.
It’s common to see the installer of a cheap system disappear shortly after the install. At Solaris Finance (the owner of Solar Nerds trademark), we are tied to the customer for the entire loan term, sometimes up to 10 years. We’ve seen too many customers burnt by dodgy installers. Over the years, our accreditation process has become more and more strict as a result of this.
I’ve talked about the problem of dodgy installers in detail, but for the purposes of this article, if it seems too good to be true, it probably is.
Financing Options
Cash Purchase
- Immediate ownership and maximum long-term savings.
- No interest payments, making it the most cost-effective option over the system’s lifespan.
Solar Loans
- This is our bread and butter. Solaris Finance (the owner of the Solar Nerds trademark) is a specialist financier of solar.
- It hurts our bottom line, but our honest advice is that if you’ve got the cash, don’t finance it. It’s always cheaper in the long term to pay cash rather than finance.
- The benefit of financing is that the repayments can be structured to match or be lower than your current electricity bill, allowing you to save from day one. This is referred to as “Cash Flow Positive.”
- As this is an area where we are quite knowledgeable, we’ve written an article where we go into detail about the different types of solar loans in Australia.
Power Purchase Agreements (PPAs)
- PPAs are very rare in Australia, especially for smaller-sized systems.
- The concept is that you pay only for the electricity generated, not for the system itself.
- No upfront costs, but you do not own the system, meaning savings might be lower compared to purchasing outright.
- At the end of the day, it’s just finance, but structured in a different way.
Payback Period and Return on Investment
The payback period refers to the amount of time it takes for the savings from your solar system to cover the initial cost of the installation. Essentially, it represents how quickly you will “break even” on your investment. After this point, the electricity your solar system generates is effectively free, leading to significant cost savings.
For most Australian households, the typical payback period for a solar system ranges between 3 to 7 years. This can vary based on factors such as system size, energy consumption habits, and the availability of feed-in tariffs. For instance, if you tend to use a lot of electricity during the day, your payback period may be shorter because you are maximizing self-consumption and minimizing what you draw from the grid. Additionally, rising electricity rates and higher feed-in tariffs for any excess power exported back to the grid can further reduce the payback period.
For example, if you install a 6.6 kW solar system costing $6,500, and it helps you save $1,200 per year on electricity, your payback period would be just over 5 years. After these 5 years, you’ll continue to save money annually, and the system can generate a return on your investment for the rest of its lifespan, which is typically 25 years or more.
Understanding the payback period can help you evaluate whether solar is a good fit for your financial goals. If you’re interested in learning more about maximizing your solar savings, check out our detailed guide on how to make the most of your solar investment.
Conclusion
So, how much does a solar system cost? While the initial investment ranges from $3,500 to $15,000 depending on system size and quality, government rebates and long-term energy savings make solar power an attractive option for Australian homeowners. By considering the factors outlined above, you can make an informed decision and enjoy the benefits of renewable energy.
