5kW solar systems: Pricing, output, returns

5kW solar systems: Pricing, output, and returns

by Solar Choice Staff on January 25, 2016

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

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.

5kW solar system prices Jan 20165kW solar PV system prices from across the country from August 2012 to Jan 2016.

5kW solar system average prices Jan 2016A snapshot of average 5kW solar system prices in Australia’s capital cities (excluding Darwin) from January 2016.

5kW solar system prices high low avg per watt Jan 2016High, low & average 5kW solar system prices across Australia in dollar-per-watt ($/W) format.

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

Orientation and tilt angle of the solar panel array

Whether there is any shade cast on the panels

-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.

  1. 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.
  2. 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.
  3. 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)

 Sydney  Brisbane
 $6,800  $6,540
 @ 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
Melbourne Perth
$7,000 $5,750
@ 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

{ 12 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

Kellie November 15, 2014 at 4:57 pm

Hi, I have a 5kw system. I live in a Rockhampton, Qld.(it’s hot!) My panels produce on average 15-16kwh /day. My sister, who lives across the road from me and has the exact same system install produces 41kwh/day. I’m not sure why? Can you offer any suggestions.
Thanks in advance.

Reply

Solar Choice Staff November 18, 2014 at 11:50 am

Hi Kellie,

Those figures don’t sound right at all–is 41kWh/day from your sister’s system a summer figure? I assume they’re both 5kW systems.

Are there any trees or other objects that could be casting shadows across your panels during the day?

More questions: Have you contacted your installer? Do you have a monitoring system set up? Depending on the answers to these questions, you can begin to get to the bottom of this situation.

Best of luck!

Reply

Kellie November 18, 2014 at 10:28 pm

Thanks for your reply. Yes, the 41kwh is a summer figure (both figures gathered on the same day, both exactly the same 5kw system, no trees or shade covering either system). My sister is about $1000 in credit with Ergon Energy, whilst we’re lucky to get $350 off our $850 bill) no monitoring system set up. I think I will contact the installer to come out and check everything.

Reply

Solar Choice Staff November 19, 2014 at 2:53 pm

Hi Kellie,

Yes–that’s probably the best move. By the sound of it, something might be wrong with one of your strings of panels. It could even be that you have just one defective panel knocking out the rest in that string, but you’re best to speak to an expert about how to remedy that.

Best of luck!

Reply

Julie January 15, 2015 at 1:18 pm

We live at Robina on the Gold Coast and have just received our first full power bill after having 5Kw solar system installed with a 6 cent feed in tarriff. Our previous bill (which had the solar included for only 30 days) showed a significant reduction of 30 percent to our overall bill and a feed in credit of $36. So we were anticipating a significant reduction in our first full summer quarter but were extremely disappointed. Our bill says our average daily use is 4 Kwh MORE and average cost per day is exactly the same as the previous year! We are producing the maximum power allowable and our power usage has increased by 10 percent. How can that be?

Reply

Solar Choice Staff January 19, 2015 at 1:53 am

Hi Julie,

Sorry to hear you’re having problems. Are you sure that there isn’t currently an issue with the system? It sounds highly unlikely that you would have excellent performance one quarter followed by no benefit the next. Either you’re using a lot more electricity this month (so much more that the solar isn’t making a difference) or there’s a problem with your system.

Please also note that you should endeavour to use as much electricity during the day as possible to maximize the amount of money your solar panels can save you. You can read more about this here.

Reply

Ramesh Parmar September 24, 2015 at 10:22 pm

Hi, I want to know the total output of the system. My System parameters are following
1. 5KW Solar System
2. Total Peak Sunny Hours = 8 Hour (9am-5pm)
3. CUF = 19%

What will be the total output in a day and for an hour???

Reply

Solar Choice Staff September 28, 2015 at 10:42 am

Hi Ramesh,

Normally we would ask for your location, but instead you’ve provided us with the number of peak sun hours available in your area. The CUF isn’t really relevant to the calculations because this is already indirectly incorporated in the number of peak sun hours.

In that case, the calculations are relatively easy: 5kWp x 8PSH = 40kWh per day – as long as your system is north facing (or south facing if you’re in the northern hemisphere). It’s best to assume only 80% efficiency just to be conservative: 40kWh x 80% = 32kWh.

Hope this helps. Please keep in mind that these are back-of-envelope calculations only and should not replace the advice of an accredited installer who knows about all of your individual circumstances.

Reply

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