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.
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?
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:
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.
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:
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The zones include surrounding areas as well. The discounts offered in each zone for a 5kW system amount to:
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.
On average, solar power for supply and installation costs:
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.
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:
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.
Some things that may make the cost of solar panel installation higher include:
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.
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:
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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