5kW solar systems: Pricing, output, returns

5kW solar systems: Pricing, output, and returns

by Solar Choice Staff on 17 January, 2017

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

5 kilowatt (5kW) solar systems have become one of the most popular sizes in Australia, thanks to the combination of high energy yields and great value-for-money that they deliver. What are the price ranges, electricity yields and financial returns that a household can expect from a 5kW solar PV system? This article takes a look.

How many panels & how much roof space for a 5kW solar system?

A modern-day 5kW solar system will be comprised of between about 15-20 panels and will require about 20-40 m2 of roof space, depending on the wattage of the panels. You can explore your own roof’s solar potential here.

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 April 2017 is about $1.26 per watt – or about $6,800, with a low of under $1/W ($3,500) and a high of about $2.10/W ($10,500). The table below, from April 2017, provides a snapshot of price trends for 5kW solar systems in capital cities around the country.

5kW solar system prices

5kW solar PV system prices from across the country from August 2012 to April 2017.

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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 (3.5 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 based on average system prices as of April 2017.

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’ (50%) 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 5kW solar systems @ average prices

(Assuming 25kWh electricity consumption/day @ 25c/kWh)

 Sydney

(assumes 11c/kWh feed-in rate from 1 July 2017)

 Brisbane

(assumes 8c/kWh feed-in rate)

 $6,200  $5,100
 @ 30% self-consumption  @ 50% self-consumption @ 30% self-consumption @ 50% self-consumption
 ~5.8 year payback  ~4.8 year payback  ~4.8 year payback  ~3.8 year payback
 ~17% IRR ~21% IRR  ~20% IRR  ~27% IRR
 ~$1,050 annual savings  ~1,260 annual savings  ~$1,030 annual savings  ~$1,330 annual savings
Melbourne

(assumes 11.3c/kWh feed-in rate from 1 July 2017)

Perth

(assumes 8c/kWh feed-in rate)

$6,400 $4,900
@ 30% self-consumption @ 50% self-consumption @ 30% self-consumption 50% self-consumption
~6.4 year payback ~5.3 year payback ~4.5 year payback ~3.5 year payback
~15% IRR ~19% IRR ~22% IRR ~30% IRR
~$970 annual savings ~$1,170 annual savings ~$1,070 annual savings ~$1,370 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.)

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© 2017 Solar Choice Pty Ltd

{ 18 comments… read them below or add one }

Lathen Loibl 13 September, 2017 at 10:51 am

Hi there,

I have a brand new 5 bedroom double storey house with perfect northern facing space for panels in western sydney. Currently, it’s my wife and I plus a 4 year old son. We have a large ducted system and all the usual mod cons of a family home. I was looking at a 5kw system. Do you think that would be sufficient? Thank you
Lathen

Solar Choice Staff 25 September, 2017 at 4:51 pm

Hi Lathen,

A 5kW solar system would probably work fine for your home – it’s currently the most popular system size in Australia and offers great value for money. You might even benefit from going a bit larger.

If you’re after some quotes, feel free to fill out our Quote Comparison Request form – you’ll have instant access to installation prices from installers who operate in your area.

Alternatively, feel free to give us a ring on 1300 78 72 73.

Best of luck!

stevan bartel 27 January, 2017 at 10:07 pm

just a question how much power can i put in my 5kw inverta it says 4000w per mppt the inverta has 2 the max power output i have is about 4kw with about 4.8 input in summer time living in townsville queensland any kind of information would be helpful

Solar Choice Staff 2 February, 2017 at 11:09 am

Hi Stevan,
Thank you for your comment. It is always best to speak with manufacturer to get technical advice on products as each brand is slightly different. You can search the brand name followed by Australian contact to get their head office details

hussien 23 January, 2017 at 6:29 am

i need to know much it cost in cash if i want to install a solar system with power bank that provides 15 to 20 kva 24/7 ?

thanks

Solar Choice Staff 26 January, 2017 at 8:34 am

Hi Hussien,

Solar Choice provides Quote Comparisons for solar PV & battery storage systems in Australia. If you’re interested, fill out the form to the right of this page to get quotes from installers in your area.

William 16 September, 2016 at 8:47 am

Hi, I am designing a completely off-grid system to be installed in Melbourne. I just have 6 LED touch screens, a larger LED Screen TV (x1) about 50″ and an internet modem. I have decide to buy a 5kw system, but I am not pretty sure about the cost of the storage system.

I also have some generator bicycles but as you may know they only produce about 40watts per hour, nevertheless, the touch screens will be only On when the people start pedal (anyway, I am discarting this energy produced).

I think the 5kw is fine, but how much can the storage cost?

Thanks

Solar Choice Staff 29 September, 2016 at 1:38 pm

Hi William,

First you’d need to figure out how much battery storage you want/need. You can check out our Solar and Battery Storage System Sizing Estimator Tool as a place to get started.

You can also use our Battery Product Performance Comparison Tool to narrow down your options (there are a lot), and get battery storage quotes from installers in your area by filling out the form to the right of this page.

Sheldon 6 August, 2016 at 2:59 am

thinking of getting a 5KW inverter with 6.5KW worth of panels. At the moment, its only myself and my partner. As we both work during the day and our 2 months avg bill is about $150 (8 units avg in winter and 12 units in summer). trying to determine if it is worth it to get solar system? as we use electricity mostly after work during night time, will the solar system help reduce our bill to minimal amount or into credit? and am I investing for the future with this size of a system?

Solar Choice Staff 22 August, 2016 at 3:31 pm

Hi Sheldon,

The way that most people get value out of a solar system these days is by self-consuming the energy as it is generated, so you’re correct that it may not be in your best interests to get a system (especially one as large as 5kW). There are two main rules for homes going solar in post feed-in tariff Australia – make sure your system is sized correctly, and try to shift your energy consumption to the daylight hours as much as possible. (Check out our simple solar system sizing estimator tool.) Any reputable installer will be up-front with you about this fact. You should also be aware that it is impossible to reduce your electricity bill to nothing without going completely off-grid because of the fact that there are fixed daily supply charges from all electricity retailers – these rates don’t disappear regardless of how little energy you purchase from the grid.

You could look into getting battery storage for your home, but batteries are still a bit expensive. While a battery bank when combined with the right solar system size will save you a lot on your electricity bill, this doesn’t necessarily mean that it will pay for itself over 10 years (or whatever the warranty period is). However, with your energy bills as low as they are you’re probably in as good a position as any for batteries to work for you financially.

Feel free to get both solar and battery quotes through our system – simply fill out your details in the Quote Comparison Request form to the right of this page.

Best of luck!

Trevor Mahoney 26 July, 2016 at 7:41 am

The example in bold above under heading “Typical power output 5kW solar system” has exactly the same PSH of 6.2 for both winter and summer yet it produces 15KWh in winter and 26KWh in summer. According to my calculations the PSH should be 3.5 hours for winter to give 15KWh.

Solar Choice Staff 26 July, 2016 at 9:07 am

Hi Trevor – thanks for pointing out that typo. We’ve gone ahead and fixed it.

Cate 7 June, 2016 at 1:46 pm

We have 15kw installed and we are getting zero savings on our bill. Before we installed out QUARTERLY bill was around $1800 which is incredibly high so we got solar panels to reduce the bills. We are still getting the same bills. Both the Solar company and the Electric company are saying they are working and we are saving. How can we be saving if our usage is the same or less, and the bills are the same price. We are at a loss of what we can do now.

Solar Choice Staff 7 June, 2016 at 3:27 pm

Hi Cate,

That doesn’t sound right at all – a 15kW system is substantial and should at least put a dent in your bill provided that you are ‘self-consuming’ a good portion of the solar energy produced (see: How to get the most of your solar PV system).

Do you consume a lot of energy during the daylight hours? If you don’t (or can’t shift more of your usage to the daylight hours), then the company who sold you the system should have let you know that solar might not be the best option for you (or at least sized your system to meet only your daytime needs).

Paul 29 May, 2016 at 7:10 pm

Hi I have a 5kw system and new to all this it makes anywhere from 3.0 kW to 4.5 kW at this time of year is that about correct . I’m in Melbourne

Solar Choice Staff 30 May, 2016 at 9:56 am

Hi Paul,

First off we should clarify the terminology a bit – if your 5kW solar system is producing only 3-4.5 kilowatt-hours (kWh) per day, that’s definitely on the low side. Kilowatt-hours represent the units of energy produced over time, while a kilowatt is instantaneous system output. So for example, your system could be producing 3kW or 4.5kW at a given point in the course of the day, but it will be at its highest around midday, when you should be producing roughly 5kW summer or winter (depending on how your panels are tilted, but as long as it’s north facing the figure should be in this ballpark).

What changes most in summer and winter is the total daily energy output of your system. On a good day in summer (e.g. December), you should get a good 20-23kWh from your system for the whole day, while in winter (e.g. July) you might get only about half that – 10-12kWh.

I hope this helps clarify things. Again, if you’re only getting 3-4.5 kWh of energy per day right now, you might want to double check that you’re not getting shading on your roof or have some other problems (hopefully not to do with the system itself). If you’re seeing instantaneous output of 3-4.5 kW of power when you occasionally check the inverter, then the system is probably functioning without an issue.

Omshree 21 April, 2016 at 1:49 pm

Refer http://www.solarchoice.net.au/blog/5kw-solar-system-price-output-return/
Second paragraph “…….and a high of about $2.10/W ($6,580).”
Could you possibly mean ($10,500)?

Solar Choice Staff 31 May, 2016 at 4:03 pm

Absolutely – that was a mistake. We’ve updated it now. Thanks for pointing it out.

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