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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!
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.
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, became a big turn point for the solar scene 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 higher than others. The reason behind this lies in the rebate policy because each state pays different rebate amounts to the center.
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.
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 5kWh 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 10kWh.
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 extremely economical 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 to $1000.
It is very important to understand what solar will cost in each state, it is because prices vary tremendously depending on what 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 does this work?
So, if you have a larger system then the lesser 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 comparatively than buying a single piece.
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, the homeowners make use of air conditioning more often than the 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 average solar panels cost are around $5250 after government rebates. Prices vary in different states with Darwin, which is 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:
This visualization 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 summarizes 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 are required for a high-efficiency panels with all the bells and whistles. At least 627 GW of photovoltaic (PV) are installed worldwide according to International Energy Agency (IEA). Solar contributes 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 percent of Australia’s clean energy generation and 6.5 percent of the country’s total electricity was produced in 2020.
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:
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:
Hardware Costs include:
The largest single expense is for the solar panels themselves, accounting for 32% of the total cost. Installation and labor is 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.
Not only does your location and panel system size matter there are also many other factors other than these two.
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 of your home matter so much because if your roof has better sun exposure than 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 then it can cause additional installation costs.
When you install solar panels, you would also have to fulfill 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 some fee, once you obtain your solar permit documents.
So, finding yourself ways to make your interconnection process cheaper and quicker is also a very important factor.
Since there are different installers and 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.
A Solar panel provides direct current and our home needs alternating current for usage, therefore a solar inverter is also needed to be installed which can convert the direct current power from 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.
Not always the solar panels will 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, or dimensions. This also has a direct effect on the total cost you will incur to install the PV modules.
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.
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 rate.
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.
It is not very wise to install solar panels by DIY because it is also 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, then 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 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.
Cash upfronts have many benefits for your solar panel installation. Some of them are:
Once you buy an upfront, then any benefit of solar energy is yours.
A solar lease is renting the installed components that you take advantage of. The solar panel installation company which 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 as same for that long.
Solar leases might seem amazing to some people but the problem lies here –
The real owner gets benefited from all of the tax incentives that is all that money is obtained by the solar panel installation company. And sometimes there is going to be a lesser sunny month thus lesser power production but you would still have to pay the full price of the lease. In the end, you might not save enough money.
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, Federal, and also depending upon where you live.
The average cost of solar panel installation in Australia ranges from AUD 3,500 to AUD 9,000 for a typical 6.6 kW solar system. Prices can vary depending on factors like location, type of panels, and installation complexity. Larger systems, like a 10 kW solar system, might cost between AUD 8,000 and AUD 14,000.
As of 2024, the price per watt for solar panels in Australia averages around AUD 0.80 to AUD 1.40. The price depends on factors such as the quality of the panels, the size of the system, and market conditions. Lower-cost systems tend to use more affordable, less efficient panels, while higher-cost systems use high-efficiency panels.
Yes, there are several government incentives and rebates available in Australia to reduce the cost of solar installations. The most significant is the Small-scale Renewable Energy Scheme (SRES), which provides Small-scale Technology Certificates (STCs) to households. The number of STCs you receive depends on your location, the size of the system, and the current market price for STCs, which can reduce installation costs by up to AUD 3,000 to AUD 4,000 for a 6.6 kW system.
Location significantly affects solar panel installation costs due to differences in labour rates, availability of solar installers, and transport costs. For example, installation costs in major cities like Sydney, Melbourne, or Brisbane might be slightly lower due to a higher number of installers, while rural or remote areas might see higher costs due to limited availability and increased transport expenses.
Several factors influence the overall cost of solar panel installation in Australia, including:
The payback period for solar panels in Australia typically ranges from 4 to 7 years, depending on the system size, energy consumption, electricity rates, and available incentives. Households that consume a lot of electricity or have high daytime usage will see faster payback periods due to greater savings on their energy bills.
Yes, solar panel installations can increase the value of a home in Australia. A study by the Australian Bureau of Statistics suggests that properties with solar panels sell for approximately 2-5% more than similar properties without solar, particularly in regions where energy costs are high and solar adoption is prevalent.
Solar panels typically require minimal maintenance, but occasional cleaning and inspections are recommended. The average cost for professional cleaning and inspection in Australia ranges from AUD 150 to AUD 300 per year. Inverters may need replacement every 10-15 years, which can cost between AUD 1,000 and AUD 2,500, depending on the type and quality of the inverter.
Yes, several financing options are available for solar panel installations in Australia, including green loans, interest-free payment plans offered by solar providers, and options through energy retailers. Some states also offer specific loan schemes to help with upfront costs. Financing terms and conditions vary, so it’s important to compare offers to find the best deal.
The size of the solar system directly affects installation costs. Larger systems have higher upfront costs but typically offer better economies of scale, meaning the cost per watt decreases as the system size increases. For instance, a 3 kW system might cost around AUD 4,000 to AUD 6,000, whereas a 6.6 kW system might cost between AUD 5,500 and AUD 9,000. Bigger systems generate more electricity, which can lead to higher savings over time.