3kW solar PV systems: Pricing, output, and returns

How much does a 3kW solar system cost in Australia, and how much energy can you expect it to produce? This article takes a look a these questions, as well as returns and payback periods for 3kW solar systems.

How many panels & how much roof space for a 3kW solar system?

A modern-day 3kW solar system will be comprised of between about 9-12 panels and will require about 15-25 m2 of roof space, depending on the wattage of the panels. You can explore your own roof’s solar potential here.

Price ranges for 3kW solar PV systems

Solar PV system prices in Australia have dropped significantly in recent years – from a national average of about $2.25 per watt (about $6,800 for a 3kW system) in 2012 to around $1.26/W (around $4,000) in early 2019 – a reduction of about 45%. Solar Choice knows this because we’ve been tracking PV system installation prices in Australia since August of 2012 in our monthly Solar PV Price Index.

The first chart below shows how average 3kW solar system installation prices have changed since then, while the other two tables offer a snapshot of solar PV system prices from February 2019.

3kW solar PV system installation price trends from August 2012 to February 2019. (Data from the Solar Choice installer network.)

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Power output for a typical 3kW solar system

How much solar energy will a 3kW solar system produce? That depends on a number of situational factors such as location, orientation & tilt of the panels, the presence or absence of shading and the overall efficiency of the components in the system are chief among them.

It’s convenient to summarise solar system output in a single figure – namely, kilowatt-hours per day (kWh/day). But the reality is that most locations receive more sunshine in the summer than in the winter; accordingly, PV system energy yields will usually be higher in the summer and lower in the winter.

The table below provides some rough figures on average daily outputs from 3kW solar systems in a handful of Australia’s capital cities (keep in mind that figures will be higher in summer and lower in winter). All situations assume north-facing aspect, panels tilted at latitude and an overall system efficiency of 80%. (Data source: Bureau of Meteorology.)

 Average indicative 3kW solar system energy yields for Australian capital cities
 Sydney Brisbane Melbourne Perth
10.9kWh 11.6kWh 10kWh 12.8kWh
AdelaideHobartDarwinCanberra
11.6kWh9.2kWh14.2kWh11.5kWh

 

Getting the most from your system by maximising ‘solar self-consumption’

These days, the best way to save money with solar is to use the energy yourself (‘self-consumption‘). For every unit (kWh) of solar energy that you use directly, you reduce the amount of energy that you have to purchase from the grid – at rates around 25c/kWh in most of Australia. In contrast, if you let your solar energy go into the grid, you will earn about 8-12c/kWh.

By running appliances during the day when your solar panels are generating power, you automatically consume the solar energy instead of grid electricity; only the excess solar energy is ‘exported’ to the grid. We recommend that you aim to consume at least 30% of the energy generated by your system, but higher rates of self-consumption will result in better returns and shorter payback periods.

Home energy management systems, hot water diverters and timers are some popular strategies for increasing solar self-consumption. Home battery storage is also increasingly in demand, but high out-of-pocket costs for battery systems make this approach less attractive for the time being (although battery system prices are expected to come down dramatically in the coming years).

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Examples using Solar Choice’s solar power system ROI calculator

Using Solar Choice’s Solar PV System Payback Estimator Tool, we’ve calculated payback periods, annual internal rates of return (IRR) and annual savings (in year 1) using 3kW 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. Also note that payback times depend heavily on the amount of solar energy that you consume directly vs export to the grid (‘solar self-consumption ratio’), so we’ve included both ‘low’ (30%) and ‘high’ (60%) scenarios.

If you do not or cannot use much electricity during daylight hours, you’re more likely to be on the ‘low’ end of the self-consumption spectrum, while if you do use a lot of energy during the day (e.g. because you’re home or because you can run devices like dishwashers while you’re away) then you may be on the ‘high’ end.

 

Indicative returns for 3kW solar systems @ average prices

Sydney

(assumes 11c/kWh feed-in rate from March 2019)

Brisbane

(assumes 8c/kWh feed-in rate)

$3,470$3,900
@ 30% self-consumption@ 60% self-consumption@ 30% self-consumption@ 60% self-consumption
~5.7 year payback~4 year payback~5.8 year payback~4.1 year payback
~16% IRR~24% IRR~16% IRR~24% IRR
~$677 annual savings~$1,040 annual savings~$620 annual savings~$880 annual savings
Melbourne

(assumes 11.3c/kWh feed-in rate from March 2019)

Perth

(assumes 8c/kWh feed-in rate)

$4,260$3,110
@ 30% self-consumption@ 60% self-consumption@ 30% self-consumption60% self-consumption
~6 year payback~5.3 year payback~4.7 year payback~3.1 year payback
~12% IRR~20% IRR~21% IRR~31% IRR
~$641 annual savings~$933 annual savings~$747 annual savings~$1,080 annual savings

*Assuming 25kWh electricity consumption/day @ 25c/kWh

3kW or 5kW system?

If you’re reading this article, you may very well have decided that 3kW is the right size for your home. If you’re not yet sure about the right size for you, however, it might be useful for you to know that 5kW is now the most popular solar system size in Australia. In fact, we’ve worked out that a 5kW system may even be a better investment for many homes than a 3kW system – see this article.

 

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Since 2008 our knowledge and sophisticated software has allowed over 160,000 Australian households and businesses to make a well-informed choice on their solar & battery installer.

 

© 2019 Solar Choice Pty Ltd

Comments

  1. Hi,
    I am setting up a mobile home and have an area of approx 2meters x 2meters in which to mount panels. My usage will be for fridge,lighting and PC/audio. I would have the best batteries I can find. I am imagining more batteries will allow for more storage and better usage.
    Can you tell what size system would work best for this?

    Cheers
    John

    1. Hi John,

      We specialise in solar for grid-connected stationary homes, and off-grid system sizing is always tricky. The batteries will only be useful if you’ve got plenty of excess solar energy to fill them up on a regular basis. I recommend googling ‘solar for caravans’ as there are a number of solutions designed specifically for your type of situation.

      Hope this helps!

  2. I live alone in a 30sq house. I am currently doing fly in fly out work. Am away from home 28 days and then home for 7 days. Is it worth my while to go for solar panels. My average bill is currently around $230/$250 per quarter.

    1. Hi Russell,

      Unless you live in the top end of the Northern Territory, where the local utility still offers a generous feed-in tariff, it’s probably not worth your while. These days, solar is worth the most to people who can consume the energy while it is being generated (during daylight hours).

  3. Hi
    I have an energy management business in South Africa dealing in renewables. I am planning to immigrate to Australia in the next few months.

    I notice your systems are extremely well priced with very attractive payback periods. That same system in South Africa would cost over 10000 AUD. Does the system have battery back up and is there surplus to push back into the grid?

    Regards
    Grant

    1. Hi Grant,

      Yes, Australia is home to some of the lowest solar PV system installation prices in the world – lucky given the turbulence surrounding government incentives for solar here.

      The prices mentioned in the article do not include battery storage, which is not yet financially attractive here (although early adopters are already moving ahead with systems, and prices are coming down fast).

  4. What is a 3kw system/Does 3kw the maximum power the system will e under generate /favourable conditions

    1. Hi Laurie,

      Yes, 3kW is the maximum instantaneous (‘peak’) power output you can expect from a 3kW solar system. However, inherent system inefficiencies usually mean that the actuall max output of a 3kW system is something in the range of 2.55kW.

Comments are closed.