In recent years, the Australian government has been actively encouraging homeowners to invest in solar panels. They’ve achieved this by providing additional incentives, such as the solar rebate scheme and feed-in tariffs.
The fact is solar panels are still worth it in 2025. Although the Aussie government rebate amounts are reducing, the cost of solar panels is declining as well. The Return On Investment (ROI) is still 3 – 4 years on most systems with a 25-year warranty. Either way, you slice it, solar panels are worth it.
There are a few other things that make solar worth it such as feed-in tariffs. We take a deeper dive below.
Yes. Going solar will save you thousands of dollars in energy bill savings over the years. With solar panels, your electric bills will be cut by almost 80% minimum, ensuring you receive only a fraction of a bill. Imagine going from $500 per month to less than $100.
The feed-in tariffs also allow you to earn extra utility credits for the surplus power you feed back to the grid. With a good feed-in rate, this goes a long way to offsetting your small remaining energy bills.
Nevertheless, there’s no fixed amount that you can save with solar. How much you save is really up to your usage patterns and your home’s energy consumption.
Electricity bill before solar panels
Here’s a breakdown of how much you spend on energy without solar to put things in perspective.
The average Australian home (3-5 persons) consumes around 20kWh of energy per day. With the country’s average cost of electricity retailing at 30.25cents/kWh, here’s how much you’ll spend:
20 x 0.3025 = $6.05 daily and $181.50 monthly.
Quarterly, the bill comes to $544.5, and annually, $2,178.
Note: The price of electricity differs depending on your State and your utility company. The average price used in this example refers to Australia’s average as of March this year).
Electricity bill after solar panels
With solar panels, the bill you receive will largely depend on how much power you consume from the grid and how much your feedback is.
Here’s a rundown of how the bill would look like assuming you’ve installed a 6kW solar system generating 28kWh daily or 840kWh monthly, and your home consumes at least 40% of the generated power.
For a home consuming 20kWh daily or 600kWh monthly, you’ll receive 11.2kWh daily from your solar panel and rely on the remaining 8.8kWh from the grid.
Therefore, you’ll spend: 8.8 x 0.3025 = $2.66 daily or $79.86 monthly on power.
The remaining 504kWh will be sent back to the grid. Assuming your feed-in rate stands at 8cents/kWh, your feed-in credits will amount to: 504 x 0.08 = $40.32 monthly.
Consequently, your monthly bill is reduced to: $79.86 – $40.32 = $39.54
Quarterly, you’ll only pay $118.62 for your electric bill.
Average savings with solar panels
Here’s an estimate of how much you can save with solar panels annually with different solar system sizes.
| System size | Average yearly saving | Lifetime Saving |
|---|---|---|
| 1.5KW | $690 | $15,525 |
| 2KW | $986 | $22,185 |
| 3KW | $1,478 | $33,255 |
| 4KW | $1,971 | $44,437 |
| 5KW | $2,364 | $53,190 |
| 6KW | $2,981 | $67,072 |
| 7KW | $3,565 | $80,212 |
| 8KW | $3,952 | $88,920 |
Factors that contribute to savings
Other factors like your location, the size of your solar system, and your feed-in tariff rate also play a hand in determining your potential savings.
Your home’s energy consumption
Normally, the higher the average energy consumption of your home, the more you stand to save with solar power. Your consumption also helps you determine the right solar system size for your home.
Size of your solar system
The larger your solar system is, the more power you can generate, and hence, the more you can save. However, having an oversized system that sends back most of the generated power to the grid may not be worth it, in terms of savings.
You save more if you use most of your generated electricity in the house, even with a small solar system.
Your location
Where you live determines how much sunlight hours your solar panels will receive. This influences how much power your solar system generates and, subsequently, how much you save.
For instance, a 5kW system in Brisbane can generate more energy during the day compared to a similar system in Melbourne.
The more the sunlight intensity, the better the power production.
How much do solar panels cost?
After rebates and government incentives are applied, the average cost for solar panels (5kW system) in Australia is about $6,034. Some states pay higher and others lower depending on their state’s rebate amount.
The price for the same solar system also varies depending on the panel brand and the number of panels used in the home.
Here’s how much you can expect to pay for different solar panel systems in different states.
| State | 1.5 kW | 2kW | 3kW | 4kW | 5kW | 6kW |
|---|---|---|---|---|---|---|
| New South Wales | $3,357 | $3,785 | $4,453 | $5,368 | $6,284 | $7,387 |
| Victoria | $3,637 | $3,864 | $4,573 | $5,568 | $6,524 | $7,666 |
| South Australia | $3,357 | $3,785 | $4,453 | $5,368 | $6,284 | $7,387 |
| Western Australia | $3,357 | $3,785 | $4,453 | $5,368 | $6,284 | $7,387 |
| Aust. Capital Territory | $3,357 | $3,785 | $4,453 | $5,368 | $6,284 | $7,387 |
| Queensland | $3,277 | $3,665 | $4,254 | $5,169 | $6,005 | $7,028 |
| Avg. of All combined | $3,390 | $3,778 | $4,439 | $5,368 | $6,277 | $7,373 |
Within the last five years, the prices of these panels have drastically reduced since most of the installation methods are now streamlined.
As manufacturers continue to look for more efficient panel designs, these price declines are only set to continue.
Are solar panels a good investment?
For most Australian homes, yes. The average Aussie home spends more than $1,200 in power bills annually for a one-person home while a 2-person home spends about $1500 annually. The more people reside in the home, the higher the energy bills.
Solar panels provide an alternative way to reduce these bills by generating your own electricity instead of buying it at a high market price. You also get to feed your excess energy back to the grid and earn some credits that offset your bills.
By going solar, you’ll also reduce your carbon footprint in the environment and help minimize your contribution to global warming.
Additionally, solar panels increase the market value of a home or apartment. This allows you to fetch a good price for the property when looking to sell it.
Therefore, even though the return on investment for different solar panels takes a much longer time, going solar seems to be an excellent investment.
How long until I recoup my money?
Between 3 to 6 years. As aforementioned, solar panels are a long-term investment. Most Australian homeowners wait about four years before they can break even on the cost of the panels.
To accurately calculate your system’s payback period, you’ll have to consider the sunlight intensity in your area and your solar system’s size.
Cities with a higher sunlight intensity such as Adelaide and Perth tend to offer a relatively short payback period of almost three years. The high electricity rates in these cities also improve the system’s ROI.
Those with lower sunshine penetration such as Canberra, Melbourne, and Hobart offer the longest payback of 4 – 5 years.
It’s also worth noting that the states with lower sunlight intensities receive lower STCs, hence lower rebate amounts for the panels. This contributes to the extended payback period.
With regard to the solar system size, larger systems usually offer shorter payback periods than smaller solar systems. This is because bigger systems generate more electricity and thus offer more savings.
The table below shows the approximate payback period of solar systems in different states. Take a look and see where your city lies.
| Yr kWh | NSW | VIC | SA | WA | ACT | QLD |
|---|---|---|---|---|---|---|
| 1.5KW | 4.2yrs | 4.5yrs | 4.0yrs | 3.5yrs | 4.0yrs | 4.75yrs |
| 2KW | 3.3yrs | 3.5yrs | 3.2yrs | 2.7yrs | 3.1yrs | 3.7yrs |
| 3KW | 2.5yrs | 2.7yrs | 2.5yrs | 2.0yrs | 2.5yrs | 2.6yrs |
| 4KW | 2.1yrs | 2.3yrs | 2.1yrs | 1.8yrs | 2.1yrs | 2.4yrs |
| 5KW | 1.9yrs | 2.3yrs | 2.0yrs | 1.5yrs | 1.9yrs | 2.1yrs |
| 6KW | 1.7yrs | 2.2yrs | 1.8yrs | 1.4yrs | 1.9yrs | 1.9yrs |
Is there a downside to solar panels?
Of course. Like everything else, solar power isn’t all roses. The first con with solar panels is the initial investment costs. Even with government incentives, the panels are still too expensive for low-income earners.
Secondly, solar energy is limited to sunny days only. And even though you can still use it on cloudy and rainy days, its production drastically declines – It can barely provide enough power for your own household appliances.
Moreover, you’ll still have to rely on your utility company for power at night without a backup battery. The batteries are also very expensive – in fact, more costly than the panels. This makes it hard to invest in the complete system.
Thirdly, homeowners living in states with a lower sunlight intensity generate little energy and need to invest in expensive, more efficient panels to enjoy solar energy.
They also receive a low rebate from the federal and state governments, which leaves them with a huge burden on solar panel costs.
Lastly, solar panels need space on your roof. Depending on the size of your solar system, you’ll need about 32m2 for around 14 – 24 solar panels. Homeowners without big roof space or land space, therefore, become disadvantaged.
Does a solar battery save you more money?
Ideally, yes. Solar batteries will save you more money and reduce your bill to near zero.
With a battery, you’ll be able to store all the excess energy your solar panels generate during the day, then use this power at night and during cloudy days when power generation is low.
To be honest, having a solar battery is the closest you can go to eliminating your power bills and going off-grid.
The only problem with solar batteries is their cost. The average price for a solar battery in the Australian market stands at $14,000 for a 14kWh battery, suitable for a 5kW solar system. This places it at a stiff $1,000 per kWh.
With these hefty prices to come down anytime soon, investing in a solar battery may not help you save money now.
In fact, the battery’s warranty may run out well before you break even with the purchase. Its payback period is usually 6 to 12 years with a well-functioning solar system.
It’ll, therefore, still be much cheaper and better for you to stick to your feed-in tariff. With time, they’ll be much cheaper for homeowners to afford.
Do solar panels save energy?
Yes. Depending on the size of your solar system, your solar panels generate enough electricity that’s used in your home. This enables you to reduce your reliance on power from the grid and hence lowers your power bills.
The surplus power generated can also be rerouted back to the grid, ensuring that no energy is lost. If you have a solar battery, you can also store the excess power for night use instead of reselling it to the grid.
This saves a lot of energy and minimizes the rate of pollutant emissions each day.
Is the solar rebate still in effect?
Yes. The Australian federal government’s ‘solar rebate’ program is still active and open for any Australian homeowner to take advantage of. However, the program is slowly being phased out, and it’s set to end on 31st December 2030.
Besides the federal rebate program, some states also offer solar incentives to their residents. This includes Victoria, South Australia, New South Wales, and ACT.
In Victoria, the rebate program was launched in late 2018 and includes solar panel rebates for owner-occupiers, interest-free loans for owner-occupiers, and solar panel rebates for rental properties.
Since 1st July this year, the solar panel rebate was slashed to $1,850.
In South Australia, there are numerous rebate programs, including the South Australia Home Battery Scheme and the Virtual power plant and sustainability incentives in Adelaide. The subsidies offered can go as high as $6,000. Check here if you qualify for this.
In NSW, the state government has introduced two solar and home battery programs in 2020, i.e., Solar for Low-Income Households and Empowering Homes. These programs will run for 10 years until 2030 and target the installation of over 300,000 battery systems. Check your eligibility here.
In the ACT, the government provides two incentive programs to the residents for both solar and home battery installation, i.e., the Solar for Low-Income program and Next Generation Energy Storage Program. These rebates are worth $825/kW for systems up to 30kW. Check your eligibility here.
All other states, Queensland, Western Australia, Tasmania, and Northern Territory, don’t run state rebate programs. Residents can check if they qualify for the federal government rebate.
Solar feed-in tariff
The feed-in-tariff, or net metering, is among the best ways for Australian homeowners to increase their solar savings and improve their system’s payback period.
The homeowners feed back to the grid on the excess power generated by their solar system in exchange for credits from their utility company.
The amount of credits you receive from your utility company depends on the amount of power you feed back to the grid.
This is why homeowners prefer investing in oversized solar systems – so they can generate more electricity and tap a lot of it into the grid.
Who has the best feed-in tariff?
Since your utility company determines the feed-in rates, you won’t find a standard rate for your area’s tariffs. However, some companies offering the best rates include Energy Australia, Origin Energy, Jacana Energy, and AGL.
Here’s a list of the best three companies by state and their feed-in rates.
| Company | 1st Company (Average rate)- c/kWh | 2nd Company (Average rate)- c/kWh | 3rd Company (Average rate)- c/kWh |
|---|---|---|---|
| NSW | Origin Energy – 16.5 | AGL – 15.55 | Mojo Power – 15.0 |
| VIC | Origin Energy – 17.0 | AGL – 15.65 | DC Power Co – 15.0 |
| QLD | Energy Australia – 16.1 | AGL – 15.3 | DC Power Co – 15.0 |
| SA | AGL – 18.15 | Origin Energy – 16.5 | Powerdirect – 16.3 |
| ACT | Origin Energy – 14.0 | Energy Local – 12.5 | Energy Australia – 12.5 |
| WA | Horizon – 30.0 | Synergy – 7.2 | N/A |
| NT | Jacana Energy – 23.6 | Power Water Corporation – 19.23 | N/A |
Keep in mind; these prices are subject to change based on the utility company’s policies. The company may pay higher for supply during peak hours and lower on off-peak hours.
How is the feed-in tariff calculated?
Your net feed-in tariff is calculated based on the fixed rate your utility company offers you at a time. The calculation is easy:
The amount you feed to the grid x feed-in rates = Net feed-in
So, assuming you have a 6kW solar system in New South Wales and you’re connected to Origin Energy, here’s how much you’ll receive as a feed-in tariff:
A 6kW system generates at least 25kWh a day. This is about 750kWh monthly. The average Australian home consumes about 18kWh, which is 540kWh monthly.
You’ll, therefore, have 750 – 540 = 210kWh to feed back to the grid monthly.
Since Origin Energy’s feed-in rate in NSW is 16.5c/kWh, the net feed-in credits you’ll receive will be worth: 210 x 0.165 = $34.65
FAQs
There are numerous solar panel brands in Australia, each outshining the other in either quality, longevity, or cost. However, SunPower, LG, Trina Solar, REC Solar, and Winaico have produced some of the best panels in the market.
Yes! Despite their bad reputation in the market, Chinese solar panels are among the best quality panels. They’re also so much cheaper than panels from anywhere else around the world. However, this doesn’t mean that all Panel brands from China are good; there are a few low-quality brands in the market too. So, be extra cautious when choosing a Chinese solar panel.
