6kW solar power system - Pricing, output, and returns

6kW solar systems: Pricing, output, and returns

by James Martin II on July 19, 2012

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

6kW solar power systems are a better investment than ever due to a the falling price of solar power systems, and the steadily rising price of electricity. This article covers the price ranges, yields (in kWh), and economic returns that a home or business can expect with a typical 6kW solar PV system.

Price range for 6kW solar PV systems

The price of solar PV (photovoltaics) has fallen dramatically across the globe since 2009, thanks mainly to government incentive schemes and a huge increase in the manufacture of solar panels in China in the past few years. The resulting competition between manufacturers as well as between system installers has managed to drive down the retail price of solar PV systems at a rate of around 45% per year. This is major news, and it may not be too much to say that a solar revolution is taking place–both internationally and in Australia.

In Australia, the average retail price of a standard solar PV system installation of mid-range quality is 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 6kW solar system is just around $13,000–around a quarter of what it would have been in 4 years ago.

The price of solar systems do, however, vary widely in the market. A more cost-competitive 6kW solar PV systems consisting of cheaper, low-end products will be cost less, while premium offerings will generally be pricier.

Normal output for 6kW solar systems

Depending on a number of factors, the actual power output of a 6kW solar power system will vary. These variables 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 above, depending on where the system is located, it will receive different amounts of solar irradiation throughout each day and each year. The amount of sunshine falling on a solar system’s solar panels directly affects the system’s output. A solar system which is facing the right direction (i.e. north) 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 daily average across the course of the year; it is important to keep in mind that the sun shines for more hours in the summer months and fewer in the winter.

For example, a perfectly efficient 6kW solar system in Sydney would produce about (3PSH x 6kW =) 18kWh of power on a day in the middle of winter, whereas in the summer output from the same 6kW solar PV system would be around (5PSH x 6kW =) 30kWh. (Figures are approximate only.)

6kW solar system financial returns

The financial returns from a 6kW solar PV installation are mainly dependent on the presence or absence of a Solar Feed-in Tariff to the owner/operator of the system. Solar Feed-in Tariff schemes pay solar system owners a premium for each kWh of power that they send to the electricity grid. Financial payback accordingly depends not only on the total output of the system, but also how that power is utilised by the occupants in light of whether or not a Solar Feed-in Tariff is being applied.

There are essentially 3 situations that owners of grid-connect solar systems might find themselves in regarding Solar Feed-in Tariff incentives:

1. They have acces to a Solar Feed-in Tariff, which encourage 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–that is, a premium.

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 mandatory solar feed-in incentive scheme exists, or the rate offered is nominal–e.g. 7c/kWh. In this situation system owners should avoid exporting their solar power to the grid, and instead time their electricity usage to ensure that they are ‘self-consuming’ their solar power–using 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

Download a 6kW Solar Power System ROI Calculator

How to use the calculator*:

1. Download the Solar Choice 6kW Solar System ROI calculator (Excel spreadsheet file)

2. Request a Solar Quote Comparison of the solar system installers in your area to obtain system prices,

3. Visit SwitchWise or a similar site to find the best deal on electricity,

4. Alter the variables in the light blue boxes (system size, system price, etc) in column B to calculate system Return on Investment (ROI).

(You may also open the file in Google Docs if you have a Google account.)

*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. He holds a master's degree in Environmental Management from UNSW.

{ 4 comments }

butler graeme July 27, 2012 at 6:57 pm

Thank you for your independent assistance as there is so much information that I obviously don’t understand.
As I have had “my fingers burnt” with Chinese manufactured goods (they seem to provide cheap & only lasting 1/4 or 1/3 of previous products & so I don’t buy to throw out as I don’t like our disposable age !! Graeme

admin July 30, 2012 at 12:04 pm

Graeme,

Thanks for the comment. Both premium and bottom-shelf solar products come out of China, as well as a number of mid-range ones. The old motto goes ‘you get what you pay for’. We’ve had many a customer who has gone ahead with systems that use Chinese components and been happy with them. There may be more of a guarantee of quality from European brands, but with a bit of discrimination it is also quite possible to find quality components with a ‘Made in China’ label.

Attila Karasszon September 20, 2012 at 1:15 am

What is the rebate rate of the solar power installed 2 years ago?
It was 68 cents but we got a letter from the service prowider ( AGL ) it is 60 cents now. We changed from Origine because it paid only 66 cents…
Is there a better deal with any of other company?
Do you have a list I can select from?

Thanks a lot
Attila

Solar Choice September 20, 2012 at 2:37 pm

Hi Attila,

I think you’re referring to feed-in tariffs as opposed to a rebates. Regardless the options available to you will depend on what state you live in. Unfortunately, we don’t have a comprehensive list of what’s on offer from energy providers as we help people get the best solar PV installation deal for them. I’d recommend you have a look at a comparison site for energy company’s.

As a rough guide, the base level in NSW two years ago was 60¢ per KWh, although energy retailers did offer various options to encourage people (like yourself) to switch. There is currently no mandatory feed-in tariff in NSW so switching to another energy provider may result in you loosing the 60¢ rate, the best on offer in NSW is now 8¢ per KWh! If you speak to AGL they may be able to tell you why the rate was dropped and their competitors may by able to advise as to whether you will still be eligible for the earlier Premium tariff.

Sorry we can’t be of more help, good luck!

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