Average Costs of Solar Panels and Battery Systems
Price Ranges (Typical Installed Costs After Federal Rebate)
Cost Breakdown
All figures below already include the Cheaper Home Batteries Program rebate, assuming the installer assigns the STCs at the current clearing‑house price. Actual quotes can vary with brand, installation complexity and location, but these ranges reflect mid‑tier equipment installed by accredited retailers in major cities (May‑June 2025).
- 6.6 kW solar + 5 kWh battery: $13,900 – $17,400
- 6.6 kW solar + 10 kWh battery: $15,200 – $18,700
- 10 kW solar + 15 kWh battery: $17,900 – $21,900
Understanding the distribution of costs between solar panels and batteries can help you budget more effectively:
- Solar panels: Generally contribute about 50 – 60 percent of the total installed cost after incentives.
- Battery storage: Makes up roughly 40 – 50 percent, depending on capacity and brand.
Factors Influencing Solar and Battery System Costs
System Capacity and Scalability
Larger systems benefit from economies of scale, reducing the cost per kilowatt-hour (kWh). Additionally, modular systems allow homeowners to scale up their storage capacity as needed without significant additional costs.
Installation Complexity and Location
The complexity of installation plays a significant role in the overall cost. Systems located closer to the main electrical panel typically incur lower installation costs. Additional requirements, such as bollards for garage installations or fire-rated backing for wall-mounted batteries, can also increase costs. Furthermore, installation costs can be higher in regional areas due to increased transportation and labor expenses compared to urban areas.
Brand Reputation and Quality
Established brands such as Tesla, Sungrow, and BYD command higher prices due to their reliability, performance, and comprehensive warranty offerings. Lesser-known brands might offer lower upfront costs but may not provide the same level of durability or support, potentially affecting the long-term value of your investment.
Additional Components
Inverters are a crucial component of the system, and opting for integrated inverters can reduce overall system costs when purchasing solar and battery together. Mounting hardware and monitoring systems enhance functionality and efficiency but add to the initial investment. Ensuring compatibility between all components is essential for optimal system performance.
Types of Solar Panels and Batteries
Solar Panels
Solar panels come in various types, each with its own set of advantages and disadvantages:
- Monocrystalline Panels: Monocrystalline panels are known for their higher efficiency and sleek appearance. They are more expensive but provide better performance, making them a popular choice for homeowners looking to maximize their energy production in limited space.
- Polycrystalline Panels: Polycrystalline panels are more affordable and offer decent efficiency. While they are slightly less efficient than monocrystalline panels, they are a cost-effective option for larger installations where space is not a constraint.
Most Common in the Industry: Monocrystalline panels are the most common in the industry due to their higher efficiency and aesthetic appeal.
Solar Batteries
Solar batteries are essential for storing excess energy generated by your solar panels, allowing you to use solar power even when the sun isn’t shining.
Lithium-Ion batteries are the most prevalent due to their high efficiency, long lifespan, and compact size. They offer excellent performance and are suitable for most residential applications. Common models include Tesla Powerwall, Sungrow SBR, and BYD Battery-Box.
Government Incentives and Rebates
Government incentives play a crucial role in reducing the overall cost of combined solar and battery systems, making them more accessible to homeowners.
Federal Incentives – Cheaper Home Batteries Program
- How it works: The rebate is delivered as additional Small-scale Technology Certificates (STCs) – 9.3 STCs per kWh of usable capacity in the 2025–26 financial year (worth approximately $372 per kWh at the current $40 price). Installers can assign the STCs so the customer sees an upfront discount, or the homeowner can trade them later.
- Value cap: Discount applies only to the first 50 kWh of a 5 – 100 kWh battery. (Maximum rebate approximately $18,600 in 2025.)
- Step-down: The STC multiplier tapers annually until 2030, so the dollar value falls each year.
- Eligibility checklist:
- Battery on the CEC Approved Battery List
- Paired with new or existing solar under 100 kW
- Installed by a SAA-accredited battery installer
- VPP-capable hardware and internet for on-grid systems (off-grid installs are exempt)
- One discounted battery system per premises; extra capacity later only eligible if the first system did not claim the rebate
- Stacking: The federal rebate can be combined with state schemes (e.g. NSW Empowering Homes, VIC Solar Victoria loans) subject to those programs’ rules.
State-Specific Incentives
Different states offer various incentives to encourage the adoption of solar and battery systems:
- New South Wales (NSW): NSW offers a solar battery rebate ranging from $1,600 to $2,800 depending on the battery size. This rebate significantly reduces the upfront cost, making it more affordable for homeowners to invest in energy storage solutions. Learn more about NSW incentives.
- Victoria: In Victoria, eligible households can access an interest-free battery loan of up to $8,800. This loan helps spread the cost of the battery system over time, easing the financial burden on homeowners. Explore Victoria solar incentives.
- Australian Capital Territory (ACT): The ACT provides an interest-free loan of up to $15,000 for solar and battery systems, supporting homeowners in their transition to renewable energy. Discover ACT sustainable household schemes.
- Queensland (QLD): Queensland previously offered the Battery Booster Program, which provided rebates of $3,000–$4,000. However, this program is now closed for new applications.
Virtual Power Plant (VPP) Participation
Participating in Virtual Power Plant (VPP) schemes can offer additional benefits such as bonus feed-in tariffs and fixed annual fees. For example, homeowners can earn up to an additional $500 annually by allowing utilities to access stored energy during peak demand periods. This participation can enhance the overall financial benefits of your solar and battery system.
Return on Investment (ROI) and Savings
Payback Period (Updated for Federal Rebate)
The payback period for combined solar and battery systems typically ranges from 7 – 14 years post-rebate, depending on system size, battery capacity, electricity usage and state incentives. For example, the 6.6 kW + 10 kWh bundle that previously paid back in approximately 12 years now drops to roughly 9 years after the federal discount, assuming the same consumption profile.
Energy Savings
Potential annual savings from a 10 kWh battery remain $642 – $2,742, driven by self consumption, electricity tariffs and feed-in rates.
Long-Term Benefits
After payback, the battery continues to supply low-cost energy for its remaining lifespan (typically 10–15 years), lowering electricity bills and carbon emissions.
Critical Perspective on ROI
The new rebate improves ROI but does not eliminate all economic caveats:
- Warranty vs payback: Some households may still see payback periods that approach the 10-year warranty mark if the battery is oversized for their usage.
- Sizing matters: Matching battery capacity to consumption profile remains critical to avoid over-capitalising.
Financing and Payment Options
Upfront Payment
Paying for your solar and battery system upfront offers the maximum savings and full ownership benefits. This method also ensures eligibility for all government rebates and incentives. However, the high initial cost can be a significant barrier for many homeowners.
Loans
Green Loans & Personal Loans: Green loans & Personal Loans are essentially the same thing apart from marketing. When compared to Personal loans, Green loans may offer favorable interest rates tailored for eco-friendly investments, making them an attractive option for financing your solar and battery system. However the underlying product is still the same. These loans may require good credit and a detailed application process.
Power Purchase Agreements (PPAs)
With Power Purchase Agreements (PPAs), you pay for the electricity generated by your battery at a set rate, often lower than traditional energy prices. This option allows you to benefit from solar and battery systems without the need for ownership. However, PPAs require a long-term commitment and do not offer ownership benefits or eligibility for rebates.
Maintenance and Lifespan
Routine Maintenance
Combined solar and battery systems require minimal maintenance compared to traditional energy systems. Routine tasks include regular inspections to ensure all components are functioning correctly and software updates to keep the system operating optimally.
Battery Lifespan
Lithium-Ion Batteries typically last 10-15 years with proper maintenance, offering a longer lifespan and higher efficiency.
Warranty Information
Most combined systems come with 10-year warranties that cover capacity retention (e.g., 70-80% after the warranty period). It is crucial to understand the specific terms and conditions of your warranty, including cycle limits and what is covered.
Tips for Longevity
- Proper Installation: Ensures optimal performance and longevity.
- Avoiding Extreme Temperatures: Protects battery health and efficiency.
- Regular Monitoring: Helps identify and address issues promptly.
Installation Considerations
Optimal System Placement
- Solar Panels: Ideally face north in the southern hemisphere to maximize sunlight exposure.
- Battery Placement: Should be near the switchboard to minimize installation complexity and costs.
Compliance with Australian Standards
Adherence to safety and performance regulations is mandatory. Ensure that all necessary permits and inspections are obtained to comply with local building codes and regulations.
Additional Installation Costs
- Bollards: Required for installations in garages or carports to protect batteries.
- Fire-Rated Backing: Necessary for wall-mounted batteries in habitable areas, adding approximately $200 to $500.
- Distance from Switchboard: Longer cable runs can add $1,000+ to installation costs.
Integration with Existing Systems
Using a hybrid inverter when purchasing solar and battery together can reduce overall system costs by avoiding the need for additional inverters. This integration simplifies the setup and enhances system efficiency.
Value Proposition
Beyond Financial Savings
Investing in a combined solar panel and battery system offers several benefits beyond just financial savings:
- Blackout Protection: Ensures continuous power during outages, enhancing home security and safety.
- Energy Independence: Reduces reliance on the grid, mitigating the impact of rising energy prices.
- Carbon Footprint Reduction: Enhances the environmental benefits of solar installations, contributing to sustainability goals.
Virtual Power Plant (VPP) Participation
Participating in Virtual Power Plant (VPP) schemes can offer additional benefits such as bonus feed-in tariffs and fixed annual fees. For example, homeowners can earn up to an additional $500 annually by allowing utilities to access stored energy during peak demand periods. This participation can enhance the overall financial benefits of your solar and battery system.
Intangible Benefits
- Peace of Mind: Assurance of energy security during power outages.
- Increased Home Value: Attractive to environmentally conscious buyers, enhancing property value.
- Sustainability Goals: Contributes to reducing household carbon emissions.
Conclusion
Investing in a combined solar panel and battery system offers Australian homeowners significant benefits, from substantial energy savings and increased energy independence to environmental advantages and backup power during outages. While the initial costs can be considerable, government incentives and financing options can make this investment more accessible. However, it’s important to critically assess the return on investment, as payback periods may approach or exceed the battery’s warranty period. By carefully evaluating your energy needs and considering both the financial and long-term benefits, you can make an informed decision that enhances your home’s energy efficiency and resilience.
