The average solar system size in Australia has grown in recent years to about 5 kilowatts (kW). What are the price ranges, electricity yields (in kilowatt-hours, kWh) and financial returns that a household can expect from a 5kW solar PV system?
This article was originally published in 2012 – we’ve recently updated it to reflect how circumstances have changed!
5kW solar systems: Pricing
Australia is home to some of the lowest solar PV system prices in the world, thanks to a broad combination of global and local factors. According to Solar Choice’s own data, the average 5kW solar system price in Australia as of January 2016 is about $1.37 per watt – or about $7,000, with a low of about $1/W ($5,000) and a high of about $2.10/W ($6,580). The tables below, from January 216, provide a snapshot of the current market for 5kW solar systems in capital cities around the country.
A snapshot of average 5kW solar system prices in Australia’s capital cities (excluding Darwin) from January 2016.
Instantly see current pricing for 5kW solar systems in your area of Australia by filling out the Solar Quote Comparison form to the right of this page. We can also help you compare battery storage system prices.
Typical power output 5kW solar system
Depending a number of factors, the actual power output of a 5kW solar power system will vary. These factors include:
-Geographical location of the system and the expected daily and annual solar irradiation and cloud cover levels there
-Actual operating temperature of the panels
-The performance of the individual components- e.g. the panels and the inverter
As mentioned in the first point above, different areas receive different amounts of sunlight. The amount of sunshine falling on a solar panel array has a direct impact on the system’s output. As a rough figure, a rooftop in Australia can expect to receive around an annual average of 4.5 hours of ‘peak sun’ (peak sun hours, or PSH) per day, although this number may range as high as 5.8 PSH per day in places like Darwin or as low as 4.2 PSH per day in Tasmania. This is only the annual average per day, and it is important to keep in mind that there will be more sun in the summer and less in the winter months.
Example: An optimally tilted, 85% efficient, north-facing 5kW solar system in Sydney, for example, would produce about (6.2 PSH x 5kW x 85% =) ~15kWh of power on a day in the peak of winter, whereas in the summer output from the same 5kW solar system would be around (6.2 PSH x 5kW x 85% =) ~26kWh. (Figures are only to be taken as rough estimates.)
5kW solar system financial returns
The financial returns from a 5kW solar installation are a bit harder to work out, and mainly contingent on whether or not a Solar Feed-in Tariff is available to the owner/operator of the system. Solar Feed-in Tariff schemes pay solar system owners a set amount for each unit of solar power that they do not use themselves and instead export to the electricity grid. Returns depend not only on the output of the system, but also how it is utilised by those whose home or business it is attached to in light of the presence or absence of feed-in incentives.
There are basically 3 scenarios that owners of grid-connected systems might find themselves in with regard to this.
- You have access to a generous solar feed-in tariff, which incentivises solar system users to export power to the grid at rates that vary from state to state, but which are usually above the retail electricity rate. If your feed-in tariff rate is higher than the rate you pay for your electricity from the grid, exporting as much of your solar energy as possible will net you the greatest returns.
- You have access to a 1-for-1 ‘Solar Buyback’ scheme in which you are paid an amount equivalent to your retail electricity rate for every unit of solar power that you feed into the grid. People in this category should simply try to reduce their power consumption as much as possible, as they can neither gain nor lose by either exporting or self-consuming their solar power.
- No generous solar feed-in incentive scheme exists. In this situation you should do your best to avoid exporting your precious solar power to the grid, and instead time your electricity usage to ensure that you are ‘self-consuming’ your solar power–i.e. use more electricity when the sun is shining, and less when it is not.
Read more: How to get the most out of your solar system.
Examples using Solar Choice’s solar power system ROI calculator
Using Solar Choice’s Solar PV System Return on Investment Calculator, we’ve calculated payback periods, annual internal rates of return (IRR) and annual savings (in year 1) using 5kW solar systems for common usage situations in some major cities. The examples are below – please keep in mind that the figures in the table are indicative only and will vary depending on system installation price and your individual circumstances.
Indicative returns for 5kW solar systems @ average prices
(Assuming 25kWh electricity consumption/day @ 25c/kWh)
|@ 50% self-consumption||@ 70% self-consumption||@ 50% self-consumption||@ 70% self-consumption|
|~6 year payback||~5 year payback||~4.6 year payback||~3.8 year payback|
|~16% IRR||~20% IRR||~22% IRR||~27% IRR|
|~$1,080 annual savings||~1,300 annual savings||~$1,400 annual savings||~$1,700 annual savings|
|@ 50% self-consumption||@ 70% self-consumption||@ 50% self-consumption||70% self-consumption|
|~7.5 year payback||~6.2 year payback||~4.8 year payback||~4 year payback|
|~12% IRR||~16% IRR||~21% IRR||~26% IRR|
|~$890 annual savings||~$1,085 annual savings||~$1,170 annual savings||~$1,430 annual savings|
Want to learn more? Try plugging some figures into our solar system ROI calculator yourself! Self-consumption is just one of the variables that can be adjusted to determine your likely payback time and return on investment. (Calculator outputs are indicative only–please keep in mind that electricity rates and feed-in tariff rates may change over time.)
© 2016 Solar Choice Pty Ltd