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Costing Your Solar Power Project

Last Updated May 17, 2018 · Written by Rob Schneider


Solar power can be a great home improvement, but how much does it cost? Having solar panels or solar tiles installed can be an expense, but over time, solar power will pay for itself in the form of lower energy bills. Here's what you need to know about costing your solar power project.

  1. Is solar power worth the expense?
  2. STCs and the zone system
  3. How much does solar power cost?
  4. What can affect the cost of solar panels?
  5. How much to solar tiles cost?

Is solar power worth the expense?

Most homes are provided with electricity, but electricity bills are going up and with air conditioning and heating included, electricity in the home can represent a significant amount of money. Solar power has come down in price and solar panels are more efficient than they were in the past, but are they worth investing in?

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Solar power systems cost about 40 percent less in 2018 than they did in 2012. Prices plummeted until about 2016 and have remained stable since then. You also need to consider the savings on power bills when you have solar panels or tiles installed. On average:

  • A 3kW system will save $85 per month
  • A 5kW system will save $115 per month
  • A 7kW system will save $135 per month
  • A 10kW system will save $200 per month
  • A 15kW system will save $270 per month

At $85 per month, a 3kW system will save you $1020 per year and a 10kW system will save $2400 per year. Since a 3kW system is less expensive than a 10kW or 15kW system, the savings are about equal and solar power systems can usually pay for themselves in 5 to 8 years, with 8 years being the longest period.

The difference in the payback period is due to the efficiency of solar panels in any zone and the cost of solar panels in that zone. For example, the payback period is 8.2 years in Hobart and 4.2 years in Adelaide. Hobart is a colder area than Adelaide, which gets more sunlight and the cost of solar power is around $5730 for a 5kW system in Adelaide and $7070 in Hobart.

STCs and the zone system

The Australian government initiated a Small-scale Renewable Energy Scheme (SRES) which includes STCs, an incentive to purchase solar systems. They have divided Australia into four zones:

  1. Zone One includes Darwin, Rockhampton and Townsville
  2. Zone Two includes Alice Springs
  3. Zone Three includes Adelaide, Brisbane, Canberra, Perth and Sydney
  4. Zone Four includes Hobart and Melbourne

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The zones include surrounding areas as well. The discounts offered in each zone for a 5kW system amount to:

  • $4000 in Zone One
  • $3800 in Zone Two
  • $3400 in Zone Three
  • $2900 in Zone Four

Any solar panel supplier who is accredited can offer a discount based on the value of the STCs. The important word there is "accredited." Most solar panel suppliers and installers are accredited, but some may not be. To get a discount, you must buy solar panels from an accredited solar installer.

Is solar power worth investing in? According to surveys, about 15 percent of Australian homes now have solar power and the number of homes investing in solar power is rising.

How much does solar power cost?*

On average, solar power for supply and installation costs:

  • $4000 to $7000 for a 3kW system
  • $6000 to $10,000 for a 5kW system
  • $10,000 to $19,000 for a 10kW system

These costs are for supply and installation and can vary in different states. Solar power is most expensive in Darwin, where a 5kW system costs $11,000 and is the least expensive in Sydney, Perth, Adelaide and Canberra where it costs between $5100 and $5700 to install.

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Since a 3kW system saves up to $1020 per year, it can pay for itself in 4 to 7 years depending on the cost of the system. Solar panels are designed to last for decades, so after the system has paid for itself, you are saving money on electricity bills.

Some other things you need to know about solar panels are:

  • They output DC power, but have converters to AC power
  • Some systems have monitoring included with the inverter. Monitoring gives you the opportunity to see how much energy solar power saves you
  • Battery storage is now the norm in Australia. Battery storage allows you to use excess energy at night, but it costs extra. Some battery storage systems cost around $5000 and others go as high as $15,000 for a large system that is probably not needed in a residential home

Most homes in Australia that have solar panels also have storage batteries. This brings the cost of installing solar panels up, but the batteries, too, have a payback period and having solar power at night saves on electricity bills.

What can affect the cost of solar panels?

Some things that may make the cost of solar panel installation higher include:

  • Split arrays
  • Meter board work
  • Access to a high roof

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Split arrays are solar panels that are located in two different places. A split array may cost $150 to $300 for additional hardware. A meter board must be up to Australian Standards and a new meter board may cost $100 or if it has to be moved, it could cost $700 to $1000. Access to a high roof may require the use of a cherry picker, which will be an extra cost.

How much to solar tiles cost?*

If the idea of having solar panels installed on your roof doesn't appeal to you, you can also have solar tiles installed. Basically, solar tiles are actual tiles that are able to absorb solar power and convert it into electricity, which is what solar panels do. Read The future of the solar panel is cheaper and integrated into your roof for more information about solar tiles.

Solar tiles can be expensive, but they don't need to cover the entire roof. On average, different brands will have different costs:

  • Bristile solar tiles for a 4kW system cost around $15,675 and have a 16 percent solar efficency rater. They come with a 25 year/80 percent capacity warranty. They also come with a 10 year product warranty
  • Tractile solar tiles for a 4kW system cost around $13,000 and have a 20 percent solar efficiency rating. They come with a 25 year/80 percent capacity warranty and a 30 year product warranty
  • Nulock solar inserts cost between $8000 and $14,000 and have an 18.6 to 22.3 solar efficiency rating. They come with a 25 year/80 percent warranty and a 12 year/90 percent warranty.
  • Tesla solar roof tiles cost $318 per square metre or the price could be higher or lower depending on the exchange rate. They come with a 30 year warranty.

These are average prices for some brands, but you may need fewer or more solar tiles. Choose a brand that has high solar efficiency and a long warranty and have them installed by a solar roofing specialist. Like solar panels, you will need more than just the solar tiles to make the solar system work and you may also want to install a storage battery.

Solar tiles are more expensive than solar panels, but with long warranty periods, you also need to compare their cost with the cost of regular roofing tiles. Read How Much Will a New Roof Cost? for some examples of the cost of roofing tiles. When you subtract the cost of regular roofing tiles from the cost of solar tiles, the price difference isn't that extreme and solar tiles have a payback period just as solar panels have.

*Costs and prices in this article are indicative and should only be used as a guide. They also vary locally and are subject to market forces.

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