Sydney is a great place for solar power, and roughly 10-15% of Sydney area homes have solar panels installed on their roofs. This article is an overview of everything you need to know if you’re considering solar power for your Sydney home – including how you can compare system prices and installers who operate in your area.

Compare solar & battery quotes instantly: Complete our Quote Comparison Request form on the right of this page.

Five good reasons to go solar in Sydney

1. Sydney gets plenty of sunshine

Although it may not be as sunny as Brisbane or Darwin, for example, Sydney is still a fairly sunny place. This is great news for anyone with (or thinking about getting) solar panels for their home.

The table below provides an overview of how much solar energy you can expect solar systems of various popular sizes to produce on the average day in Sydney. It’s helpful to remember that kilowatt-hours (kWh) are the units that appear on your electricity bill – and which your electricity retailer uses to calculate your quarterly or monthly electricity bill.

Solar PV system output in Sydney (Popular system sizes)
Solar system size (kilowatts)
Avg daily system output (kilowatt-hours)
1.5kW 5.8kWh
2kW 7.8kWh
3kW 11.6kWh
4kW 15.5kWh
5kW 19.4kWh
10kW 38.7kWh


What do these numbers mean for me if I go solar?

Solar power is a great investment for virtually any home that has a reasonably-sized, unshaded roof and some electricity consumption during the daylight hours (see the sections below). This is because your home-generated solar energy can save you money in two ways:

  • a) Solar helps you reduce the amount of energy you need to purchase from your electricity retailer / the grid. This is commonly referred to as ‘solar self-consumption‘, and it is the key to making the most of your solar system – you should do everything you can to maximise your self consumption. In practice, self-consumption entails running your appliances (pool pump, washing machine, dish washer, etc) when the sun is shining.
  • b) You can earn credits on your electricity bill for your system’s surplus energy. This is usually referred to as a solar feed-in tariff. Any solar energy produced that is not immediately put to use in devices in your home will automatically be sent back to the grid, earning you a feed-in credit. A few years ago, feed-in tariffs were state-sponsored and quite generous (and many solar homes still receive them), but these days the rates offered are significantly lower – and so therefore is their impact on your energy bill savings.

The value of your solar energy is based on a combination of how much you self-consume and how much you export. If you have a 3kW solar system that produces 11.6kWh/day (as in the table above), but you only manage to self-consume 50% of that, then your savings will be smaller than if you managed to self-consume 80% – or even, ideally, 100%.

It’s therefore fairly important that the system you choose is appropriately sized for your home and electricity consumption. Fortunately, we have developed a tool to help you select a solar PV system size based on the amount of energy that you consume and your consumption pattern: Check out our Solar PV System Sizing Estimator Tool here

2. Incentives through the federal government

Like everyone everywhere in Australia, Sydney residents who install solar can benefit from the nation’s Renewable Energy Target. It’s a bit complicated, but in essence the Renewable Energy Target provides an up-front incentive off the cost of installing a solar PV system based on the system’s size and how sunny your location is, plus certificate market forces. These days, this ‘discount’ works out to about 30% off the sticker price of a fully installed solar system. Keep in mind that this incentive only applies if your system is installed by accredited solar installers using accredited products. In most cases, you should be able to see how much this incentive is worth in the quotes you get from installers.

As an example, a 4kW solar system installed in Sydney in 2016 would be eligible for a ‘discount’ of approximately $2,800-$3,100.

3. Solar power is affordable in Sydney

Thanks in part to the federal incentives explained above, Australia is home to some of the lowest solar PV system prices in the world – which is one of the reasons that so many homes and businesses have solar panels installed. Solar Choice has been keeping rack of installation price trends since 2012 in our Solar PV Price Index articles.

The chart below shows how prices have changed (in terms of dollars per watt of capacity – $/W) over the last four years for a range of popular system sizes. On average solar system prices in Sydney have dropped by about 35% since we started publishing figures. According to our data, these days, a 3kW system in Sydney costs about $4,800 on average – although lower-priced systems are out there.

Sydney, NSW

Instantly compare current prices for a range of installers & system sizes in Sydney: Request a Solar Quote Comparison by entering your details into the form to the right of this page.

4. Solar power systems offer attractive returns for Sydney households

The table below shows payback periods, ‘internal rate of return’ (IRR) and annual savings in the first year for a Sydney home, using 4x different solar system sizes at average prices (as of August 2016). Keep in mind that returns may be better for systems whose price points are lower. But also be mindful that you’ll want to be selective about the products and companies that you consider – some deals are too good to be true.

Indicative returns for solar systems @ average Sydney prices

(Assuming 85% system efficiency, 25kWh electricity consumption/day, retail electricity @ 25c/kWh, solar feed-in rate @ 8c/kWh)

1.5kW 2kW
$3,200 $3,900
@ 50% self-consumption @ 70% self-consumption @ 50% self-consumption @ 70% self-consumption
~7.4 year payback ~6.1 year payback ~6.8 year payback ~5.6 year payback
~11% IRR ~15% IRR ~13% IRR ~17% IRR
~$411 annual savings ~$500 annual savings ~$550 annual savings ~$670 annual savings
3kW 5kW
$4,900 $6,800
@ 50% self-consumption @ 70% self-consumption @ 50% self-consumption 70% self-consumption
~5.8 year payback ~4.7 year payback ~4.8 year payback ~4 year payback
~17% IRR ~21% IRR ~21% IRR ~26% IRR
~$820 annual savings ~$1,000 annual savings ~$1,370 annual savings ~$1,670 annual savings

Want to play with the numbers yourself?

Calculate indicative solar power system ROI & payback periods for Sydney, NSW

calculator icon

5. Energy independence – like growing vegetables in your own back yard

Solar is about more than just saving money – to some degree it’s also about self-reliance. With the advent of affordable solar power, Australian homes are no longer completely beholden to their electricity retailer for their energy needs. A good analogy home-grown vegetables: having a garden in your back yard can not only help you save on your grocery bills, it also feels good.

Battery storage technology promises to support Australian households in reaching higher levels of energy independence. Interest in homes batteries has increased substantially since the beginning of 2016 and the solar industry is rushing to catch up with it – there are now dozens of battery products available on the market. As technology prices come down over the next couple of years, more and more homes will be looking to make themselves mostly or completely energy self-reliant with solar & batteries. Most homes will remain connected to the grid (although a handful of the more adventurous will go off-grid), but even then will undoubtedly be quite proud that a good chuck of their electricity is home-grown.

Further reading:

Solar battery storage in Sydney, NSW

Commercial solar power in Sydney & NSW

Ready to shop for solar & batteries? Compare quotes from installers in your area.

Find out what sort of solar installation prices are available from installers who operate in Sydney by filling your details into the Solar Quote Comparison form to the right of this page.

© 2016 Solar Choice Pty Ltd 

{ 11 comments… read them below or add one }

marian January 22, 2017 at 11:29 am

G’Day, could you please explain for me the following : 2.5kw solar x 10 panels system + inverter conected to grid. Does that mean the total number of panels (10 ) produces 2.5kw of power or is each panel 2.5kw = 25 kw power? I don’t have a clue re this. Cheers Marian.


Solar Choice Staff January 26, 2017 at 8:19 am

Hi Marian,

In this scenario, each panel would be 250 watts (W). 1 kilowatt (kW) is equal to 1,000 watts, so 10x 250W solar panels would equal 2,500W or 2.5kW.

Hope this helps.


tony mcgarvey November 12, 2015 at 6:16 pm

Am a Carpenter and would like to know the best roof pitch facing north that would give me optimal usage for a new system of panels.

Thanking You


Solar Choice Staff November 13, 2015 at 8:29 am

Hi Tony,

Best practice for a standard grid-connected solar system is to tilt the panels in accordance to the latitude of the location of the roof (e.g. 32 degrees for Sydney). For homes or businesses with heavy summertime cooling loads, the panels can be tilted at latitude minus 10 degrees (e.g. 22 degrees for Sydney). Conversely, for homes with heavy electrical loads in winter, panels can be tilted at latitude plus 10-15 degrees (e.g. 42-47 degrees for Sydney).

Hope you find this useful! You may also want to check out our article on solar panel tilt & orientation.


Tanya Birkmann September 11, 2015 at 7:33 pm

I dont understand why so many People dont have Solar . The Sun is over there more then in Europe!


Leonard gentin April 25, 2015 at 4:09 am

Does Solor heating for a pool get the government discount


Solar Choice Staff May 4, 2015 at 11:26 am

Hi Leonard. If you’re talking about a solar hot water system, then the answer is yes – both solar photovoltaic and solar hot water systems are eligible for the federal incentive available under the Renewable Energy Target.


Simeon March 1, 2015 at 5:48 pm

What I find frustrating is the choke hold current energy produces seem to have over solar buyback systems. Surely if more homes could afford solar technology, and the power channeled back into a grid, we could begin to create a sustainable eco-friendly future.


Barbara Newman February 22, 2015 at 4:03 pm

We are so behind the rest of the world in solar and we should NOT be in this position. Professor Martin Green did so much of the early pioneering work on this innovation in the 80’s and 90’s and we have NOT utilised this value adding of the sun. In places like Israel and Jordon, most have solar powered homes and they get snow in winter!
Why can’t we get a government that pushes along this technology to improve the more than 16% unemployment rate we have in Australia?


David Palmer August 26, 2014 at 1:55 pm

There is not enough sun on my home to install solar power but I want to explore the feasability of running my pool pump only by solar. There is an area on my site which may have enough sun so I need advice.


Solar Choice Staff August 27, 2014 at 2:18 am

Hi David. Solar-powered pool pumping should indeed be an option for you as long as you have space outside your roof to mount solar panels. Best to get in touch with one of our brokers on the topic by either emailing or filling out our Solar Quote Comparison Request form to the right of the page.


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