What is The Cost Of Solar Panel Installation? ( Solar Panels Prices)

The cost of solar panel installation in Australia typically ranges from $3,000 to $10,000 for a standard residential system (3kW to 10kW), depending on the system size, location, and installer. On average, Australians pay around $0.90 to $1.30 per watt after government rebates.

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Are you interested in solar panel installation but unsure of the cost? You’re not alone – this is a common question. When it comes to solar installation, there are a lot of factors that go into the overall cost.

In this blog post, we’ll take a look at some of the most important factors that impact the solar panels’ price and give you an idea of what you can expect to pay for solar panel installation in Australia.

Keep in mind that the final cost will vary depending on your location and the specific system that you choose. So let’s get started!

Solar Panel Installation: How Much Does It Cost in Australia?

Be it a B2B or B2C industry, the first question that pops into mind every time one invests money is related to cost. 

Likewise, the global solar power industry has gone through several cost and technology fluctuations over the years. We’ll discuss these trends and patterns in this article with a special focus on the target market based in Australia.

Solar panel prices over the years in Australia

Before the solar industry underwent the boom around 2008, prices ranged as high as $20 per watt. Such a high cost translated to the adoption of this technology by a specific high-income economic group, while a large segment of the population still hesitated to make the change.

Then, within a year, the government launched high-value tariffs that lured in a lot of new customers.

The offer of 60 c/kWh that consumers sent back to the grid became a huge hit and eventually widened the user base by massive percentages. Around the year 2011, several solar installation companies offering better prices came up, and the federal rebate program was started.

The program, to date, provides a huge benefit to people on the upfront cost of the installation and, in turn, has become a big turning point for the solar scene in Australia. 

How Much Do Solar Panels Cost in Australia?

To understand the actual cost of solar power installation in Australia during current times, you must know that the advertised price of a solar power system mostly includes the cost of installation, too.

Though you might get additional benefits after applying for the solar panel rebates.

So, suppose an installation company quotes $6000 for a 6.6kWh system, then you won’t have to pay any additional amount for the actual installation process. In fact, customers should beware of companies that claim to charge extra for this purpose. 

Another thing one must take care of is that you should avail yourself of services from a certified installer only, as the rebate won’t be applicable if you do otherwise. Now, depending on the state you reside in, the actual cost might differ.

Some areas, for example, might charge more than others. The reason behind this lies in the rebate policy because each state pays different rebate amounts to the centre. 

Also, the number of PV panels that can generate a specific amount of electricity varies by location.

Hence, one might have to invest in a higher number of panels if they reside in an area where the average power generation per panel is relatively lower.

What is the Average Solar Panel Price in Australia

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Per Watt

To determine the cost of the panels per watt, you first have to consider the overall size of the system and the state-wise rebates offered.

For some context, if you go for a 5 kWh system, then the per-watt panel price is around AUD 1.04. However, it comes down to AUD 0.92 if the system size is increased to 10 kWh.

Per kWh

If we keep the global solar power industry in consideration, the panel cost on a per kWh basis in Australia is one of the cheapest.

All thanks to the government rebates, initiatives, and the flourishing solar scene in the country, the prices have come down to an extremely economical level for the common man. 

For instance, if someone goes for a good quality solar panel system, the price per kWh can be anywhere between $900 and $1000.

Does solar panel installation cost the same everywhere?

It is very important to understand what solar will cost in each state because prices vary tremendously depending on the state you live in. And, there are many reasons for this, and the most important one is system size. Now, you must be wondering how this works.

So, if you have a larger system, then the less you will be charged per kilowatt-hour (kWh).

It is more like a business thing; if you buy in bulk, then you will have to pay less compared to buying a single piece.

How Much Do Solar Panels Cost Based on Size

SYSTEM SIZE	AVERAGE SOLAR PANEL SYSTEM COST (BEFORE TAX CREDITS)	AVERAGE SOLAR PANEL SYSTEM COST (AFTER TAX CREDITS)	$/W
2 kW	$6,822	$5,048	$3.41
3 kW	$9,159	$6,778	$3.05
4 kW	$11,524	$8,528	$2.88
5 kW	$14,111	$10,442	$2.82
6 kW	$16,857	$12,474	$2.81
7 kW	$19,436	$14,382	$2.78
8 kW	$21,968	$16,256	$2.75
9 kW	$24,706	$18,283	$2.75
10 kW	$27,541	$20,381	$2.75
11 kW	$29,657	$21,946	$2.70
12 kW	$32,135	$23,780	$2.68

Generally, in some states, homeowners make use of air conditioning more often than homeowners in other states. So, large solar panel systems are installed in sunny and warm states, for instance, Florida and Arizona.

Roughly one can say that for warm states it would cost more, and for cold states it would cost less.

But if there is a difference in a system size, then it might cost less for a warm state if a larger panel system size, and cost more for a cold state if a smaller panel system size.

In Australia, the average cost of solar panels is around $5250 after government rebates. Prices vary in different states, with Darwin being the most expensive, and Sydney and Perth are among the most affordable.

This chart illustrates the average cost of solar panel systems based on their size (measured in kilowatts or kW).

The x-axis shows the different system sizes ranging from 1.5kW to 6kW, while the y-axis represents the cost in dollars, with increments of $1,000 up to $6,000.

Key observations from the chart:

1. There’s a clear upward trend in cost as the system size increases.
2. The smallest system (1.5kW) is the least expensive, costing slightly less than $3,000.
3. The largest system (6kW) is the most expensive, with a price just over $5,000.
4. The price increase appears to be roughly linear, with each step up in system size corresponding to an increase in cost.
5. The mid-range systems (3kW and 4kW) fall in the $3,000 to $4,000 price range.
6. The 5kW system costs a bit under $5,000.

This visualisation effectively shows how the cost of solar panel systems scales with their size, providing a quick reference for consumers to estimate costs based on their energy needs.

The title “Average Cost of Solar by System Size” accurately summarises the information presented in the chart.

In most states in Australia, a commonly sized 6kW Solar PV System would cost $4,000 to $6,000, and a 10kW system would cost $7,500 to $10,500. The average solar price for a good-quality 5kW solar system in Sydney starts at $5,500. You should expect to pay around $7,000 if you want panel-level output.

$9,000 is required for a high-efficiency panel with all the bells and whistles.

At least 627 GW of photovoltaic (PV) cells are installed worldwide according to the International Energy Agency (IEA). Solar contributed almost 3% of the total worldwide in 2020, as a percentage of global power generation.

Small-scale solar (systems up to 100 kW) was responsible for 23.5 per cent of Australia’s clean energy generation, and 6.5 per cent of the country’s total electricity was produced in 2020.

What is the Cost of solar panel systems by state

State	1.5 kW	2kW	3kW	4Kw	5Kw	6Kw
Western Australia	$2,450	$2,710	$3,010	$3,540	$3,650	$4,210
Victoria	$3,215	$3,478	$3,984	$4,599	$5,440	$6,650
South Australia	$2,792	$3,150	$3,650	$4,185	$4,722	$5,320
Queensland	$3,280	$3,620	$3,860	$4,650	$4,980	$5,638
New South Wales	$2,950	$3,230	$3,690	$4,055	$4,450	$5,166
Avg. of All combined	$2,909	$3,211	$3,655	$4,201	$4,633	$5,466
Aust. Capital Territory	$2,770	$3,080	$3,740	$4,180	$4,560	$5,810

The above chart provides a breakdown of the cost of solar panel systems by state in Australia.

It compares the prices for different system sizes ranging from 1.5 kW to 6 kW across various Australian states and territories.

The chart includes data for Western Australia, Victoria, South Australia, Queensland, New South Wales, and the Australian Capital Territory. It also provides an average cost across all states combined.

Key observations:

1. Prices generally increase as the system size increases across all states.
2. Western Australia consistently has the lowest prices across all system sizes.
3. Victoria tends to have the highest prices for most system sizes.
4. The Australian Capital Territory prices are close to the average for most system sizes.
5. The 6 kW systems are the most expensive across all states, with prices ranging from $4,210 in Western Australia to $6,650 in Victoria.
6. The 1.5 kW systems are the least expensive, with prices ranging from $2,450 in Western Australia to $3,280 in Queensland.
7. The average cost across all states for a 3 kW system is $3,655, while a 6 kW system averages $5,466.

This chart provides a comprehensive overview of solar panel system costs, allowing for easy comparison between different states and system sizes in Australia. Copy

The above pie chart breaks down the costs associated with solar installation. The chart is divided into two main categories: Soft Costs and Hardware Costs.

Soft Costs include:

1. Installation & Labour (20%)
2. Assessment & Add-ons (12%)
3. Installer Costs (8%)
4. Inspections & Permits (4%)

Hardware Costs include:

1. Solar Panels (32%)
2. Inverter(s) & Wiring (14%)
3. Racking & Mounting (8%)

The largest single expense is for the solar panels themselves, accounting for 32% of the total cost.

Installation and labour are the second highest expense at 20%. Inverters and wiring make up 14% of the cost, while assessment and add-ons account for 12%.

The remaining costs are evenly split between installer costs and racking & mounting at 8% each, with inspections and permits making up the smallest portion at 4%.

Overall, the soft costs (44% total) are slightly less than the hardware costs (54% total) in a typical solar installation project.

What affects the cost of solar panel installation?

Not only does your location and panel system size matter but there are also many other factors other than these two.

Brand of the equipment

While installing some solar panels, one must make sure to choose the brand of the equipment wisely because this has a huge impact on the final cost you pay.

Characteristics of the roof

Characteristics of the roof of your home matter so much because if your roof has better sun exposure, then not many panels are needed, which in turn decreases your costs.

It is easier for installers to install panels on such a single roof plane, for instance, a south-facing roof, than on a roof with multiple levels, because it can cause additional installation costs.

Interconnection fee

When you install solar panels, you would also have to cover the cost of the interconnection fee and solar permits.

Interconnection is basically getting your solar energy system connected to the grid, and this interconnection is obtained by paying a fee once you obtain your solar permit documents.

So, finding ways to make your interconnection process cheaper and quicker is also a very important factor.

Labour

Since there are different installers, the amount they charge for their services varies.

Finding yourself a well-regarded solar installer providing a premium warranty offer would definitely charge more for their installation job, but it will be worth your money.

Solar inverter

A Solar panel provides direct current, and our home needs alternating current for usage.

Therefore, a solar inverter needs to be installed, which can convert the direct current power from the panels into alternating current so that you can use it at your home.

Thus, keeping in mind the cost of solar inverters is also one of the factors.

Does sunlight affect solar panel system installation costs?

Not always will the solar panels get direct sunlight; sometimes the surrounding trees or buildings might cover the solar panels, or maybe the sun is affected by the weather conditions like rain, snow, or clouds.

An installer considers some factors like location, shade, material, and dimensions. This also has a direct effect on the total cost you will incur to install the PV modules.

What are the Ways to pay for solar panel system installation

You can pay for solar panel installation in five different ways. Each of them has its pros and cons. But there are only two ways worth considering for the vast majority of businesses, farms, and homes.

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1. Power Purchase Agreement (PPA)

To avoid the upfront costs, PPA is the best way. They own your system.

You do not even have to pay a fixed amount every month. In this case, you are supposed to pay for whatever your solar power system generates per kilowatt hour.

Your traditional power company will give you the power you need to draw from the grid. The solar panel installer charges you for the power that your system produces. Therefore, the solar panel installer is your new power company.

So, it is like having two power bills. PPA helps you with lowering your rates compared to your normal power company, which helps you save money. PPA and lease also help you with zero tax credits.

2. Solar Panel Kits (Installation is DIY)

It is not very wise to install solar panels by DIY because it can also be dangerously life-threatening at worst. Honestly, DIY solar panel installation is not going to cost you less, but more. The main reason is the huge tax incentives. When a solar panel installation is done by a certified professional, only incentives are given out.

There is only one benefit provided by the solar kit peddlers, and that is cost savings, but except for the fact that when you later find out, you didn’t actually save any money.

Why?

Because the system might not be installed or designed properly, so, this way you can lose the tax incentives, and you might also lose because your installed system might not produce enough energy as it should, where you have spent months and a pro would have installed it in less than a week.

Therefore, a DIY solar panel installation is the worst option out of five.

3. Cash upfront

Cash up front has many benefits for your solar panel installation. Some of them are:

• First, you get all the tax incentives
• You can get a maximum value for your panel in the resale whenever you sell your house.
• You can also get an advantage over inflation because you would see an increase in bill savings over time.
• The system you have will be owned by you from the beginning
• There is going to be no recurring bills

Once you buy an upfront, then any benefit of solar energy is yours.

4. Solar Lease

A solar lease is renting the installed components that you take advantage of. The solar panel installation company that has installed the panels, inverter, and all the other components own it, and you pay rent for it.

You pay a fixed amount per month, and this does not depend on the amount of power generated.

This price might not remain the same for a whole 20 years because the owner of solar panels definitely doesn’t want to lock the price the same for that long.

Solar leases might seem amazing to some people, but the problem lies here –

The real owner benefits from all of the tax incentives, and all of that money is obtained by the solar panel installation company.

And sometimes there is going to be a less sunny month, thus less power production, but you would still have to pay the full price of the lease. In the end, you might not save enough money.

5. Solar financing

Solar financing is far better than leasing because of the money that you save.

With financing, you own the whole system and have to pay only once while buying it and with a lease, you would have to pay for it again and again, and you do not own it unless you decide to buy it outright, which will cost you even more.

Another important thing is that you get tax incentives, unlike leasing.

You can save 26% to 60% on your solar panel installation bill because of local tax incentives, state, and Federal, and also depending on where you live.