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5kW solar systems: Pricing, output, returns

5kW solar systems: Pricing, output, and returns

by James Martin II on July 13, 2012

in 5kW,ACT,NSW,NT,QLD,SA,Solar and Renewable Energy Policy,State Government solar feed-in tariffs,TAS,VIC,WA

The market for solar PV systems has shifted in recent years from 1.5 kilowatt (kW) to 3 to 5kW solar systems. This shift has occurred in great part due to a drop in the price of solar power systems, and the rising price of electricity. What are the price ranges, power outputs (kWh), and financial returns that a home or business can reasonably expect from a 5kW solar system?

5kW solar systems: Pricing

The price of solar PV (photovoltaics) has dropped significantly across the globe, thanks mainly to government incentive schemes and a massive ramping up of solar panel production in China in the past few years. The resulting competition both on the manufacturing level as well as the installation level has managed to drive down the retail price of solar PV systems by around 45% per year. This is major news, and it may not be an overstatement to say that a solar PV revolution is underway globally as well as in Australia.

In Australia, the average retail price of a standard solar PV system installation of reasonable quality currently stands at just above $2 per watt, after federal government solar rebates are taken into account. This means that at the time of writing, the cost of such a 5kW solar system is just around $11,000–less than half of what it would have been 4 years ago.

Of course, there is much variation in the market–5kW solar systems using lower quality components will come with a smaller price tag, while offerings from the premium end of the market will be decidedly more expensive.

You can receive a free and instant comparison of quotes for 5kW solar systems by filling out the form to the right of this page and then checking your inbox.

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

-Orientation and tilt angle of the solar panel array

-Whether there is any shade cast on the panels

-Actual operating temperature of the panels

-Whether solar panel array capacity is accurately matched to inverter capacity

-The performance of the individual components–i.e. 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 hours of ‘peak sun’ (peak sun hours, or PSH) per day, although Tasmania receives less than this, and Broome, WA receives more. 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.

A perfectly efficient 5kW solar system in Sydney, for example, would produce about (3PSH x 5kW =) 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 (5PSH x 5kW =) 25kWh. (Figures are approximate only.)

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.

1. They have acces to a Solar Feed-in Tariff, which incentivise solar system users to export power to the grid at rates that vary from state to state, but which are above the retail electricity rate.

2. They have access to a 1-for-1 ‘Solar Buyback’ scheme in which they are paid an amount equivalent to their retail electricity rate for every unit of solar power that they 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 p0wer.

3. No generous solar feed-in incentive scheme exists. System owners in this situation should do their best to avoid exporting their precious solar power to the grid, and instead time their electricity usage to ensure that they are ‘self-consuming’ their solar power–i.e. use more electricity when the sun is shining, and less when it is not.

Read more: The economics of Solar Feed-in Tariffs vs solar buyback schemes

Check out Solar Choice’s solar power system ROI calculator

Want to learn more? Try plugging some figures into our solar system ROI calculator. 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.

© 2012 Solar Choice Pty Ltd

James Martin II

James has been working as analyst and online development manager for Solar Choice since 2011 and has contributed hundreds of articles to the Solar Choice website during this time.

He holds a master's degree in Environmental Management from UNSW, and a bachelor's degree in Philosophy from Bridgewater State University in his native Massachusetts.

He currently works remotely for Solar Choice from New York City.

{ 4 comments… read them below or add one }

pino August 6, 2012 at 1:00 pm

In Vic. Prices on 5 kw system, please.

Reply

admin August 6, 2012 at 1:42 pm

Hi Pino,

You can get a free, instant comparison of about 7 solar PV system installation price quotes for your area of Victoria by filling out the form to the right of this page and then checking your email inbox. We hope to hear from you soon.

Reply

Nam Huu Nguyen October 14, 2014 at 4:13 pm

I am interested in the 5KW or 10KW, is it enough for the family of 4 people and what about supply and installation cost?

Reply

Solar Choice Staff October 18, 2014 at 7:11 am

Hi Nam,

Whether a 5kW or 10kW system is sufficient for such a household would depend on your daytime electricity usage. In today’s Australian solar scene, with feed-in tariffs at low rates, it’s critical that a solar home or business consume as much of its power during the daytime as possible–so an oversized system would be counterproductive.

Any of the installers in our network (or our own staff) can help you out with determining a system size. Request a Solar Quote Comparison go start up a dialogue with us.

Reply

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