Solar Power in Victoria: Benefits and options

Update 3 Sept 2012: The Victorian government has announced that systems must be installed and all paperwork submitted by 30 September 2012 in order to secure eligibility for the Transitional or Standard Feed-in Tariffs. Once secured, rates will remain in place until 31 December 2016. Read more.

Thanks to the falling price of solar PV systems, the rising price of electricity, and the state’s Standard and Transitional Solar Feed-in Tariffs, installing solar power in Victoria is a smart investment for homes and small businesses with high electricity bills. What are the benefits of solar power in for Victoria residents?

The benefits of having solar power in Victoria

Harnessing the financial benefits of Victoria’s sunlight

Most of Victoria receives around 3.7 hours of sun per day, averaged across the year. 3.7 hours of peak sun means that, with a 1.5kW solar PV array, a home will generate 5.55kWh per day on average throughout the year. A 3kW system will produce around 11.1kWh per day, and a 5kW system will generate around 18.5kWh per day. What does this translate to when talking about your electricity bills?

Victoria: Electricity consumption vs solar PV system electricity generation

Understanding a home or business’s baseline electricity usage patterns and levels should the first consideration when thinking about installing solar power in Victoria–or anywhere else in Australia, for that matter. The electricity demand of a home or business depends on the number of occupants and their energy usage patterns, but as a ‘base case’, the average 3-person home uses an annual average of about 20kWh per day. This means that a 5kW solar system will generate just about enough power to cover the electricity usage of such a home. However, it is important to note that, until solar power storage solutions become more affordable, that a grid-connected home cannot rely on a solar power system for all of its energy needs–unless all power used is consumed when the sun is shining and the panels are producing electricity.

However, for Victoria solar households and businesses on the state’s 25c/kWh Transitional Solar Feed-in Tariff (for systems of 5kW in capacity or smaller), it makes more financial sense to attempt to export as much solar electricity to the grid as possible. This essentially means that electricity utility companies are paying more for your solar power than you pay for the electricity that you import from the electricity grid. Additionally, for those receiving the state’s ‘1-for-1’ Standard Feed-in Tariff (for all types of renewable energy generation, including solar PV systems greater than 5kW in capacity), a general strategy of energy use reduction and efficiency will yield the greatest results. (See below for more information on Solar Feed-in Tariffs.)

Calculating the up-front Federal Government Solar Rebates for solar power systems in Victoria

Understanding the government subsidies available through the Federal and Victorian Governments is another important step in identifying and finding the best deals on solar power systems in Victoria. Victorian residents are eligible for both a Federal government ‘rebate’ and Victoria’s Feed-in Tariffs.

The size of ‘Solar Rebate’ available to someone who has a solar PV system installed depends mainly on the amount of sunshine that the postcode in question receives and the size of the solar system installed. Under the Federal Government’s Solar Credit Scheme, households are awarded a greater or smaller number of Renwable Energy Certificates (RECs, also known as Small-scale Technology Certificates or STCs), depending on their location, the size of the system that they install, and the REC price agreed on between the customer and solar installer. It is also important to keep in mind that STC prices fluctuate with supply and demand. Solar installation companies should inform customers what price they give per STC when negotiating a price. (STC prices are also clearly detailed in Solar Choice’s Solar Quote Comparison sheets.)

Most of Victoria is located in STC Zone 4. From 1 July 2012, a 5kW solar PV system installed in STC Zone 4 would generate a base number of 88 STCs. When the Solar Credit REC Multiplier (currently 2x) is applied, however, the total number of STCs generated is (88 + 27 =) 115. (Use the Office of the Renewable Energy Regulator’s STC calculator to determine which STC Zone you are in and how many STCs a system you install might be entitled to).

Assuming an STC price of $30, 115 STCs would entitle the system owner to a discount of $3,450 off the up-front price of the system. Solar PV system prices are currently reaching unprecedented lows across Australia and the world thanks to increased competition and a glut of stock, making solar systems are an attractive investment for homes and businesses. Victoria residents also enjoy the additional support of Victoria’s Feed-in Tariffs, which improve system return on investment (ROI) and shorten payback periods.

Saving money on your electricity bill with solar power in Victoria

All grid-connected Victoria residents can benefit financially from having a solar PV system installed in two ways:

Avoiding purchase of electricity from the power grid/electricity retailers by consuming solar power as it is generated (“self-consumption”). For this to work, the premises with the system must be occupied, or the appliances scheduled to run during the daytime hours when the system is producing power. When solar power is self-consumed, its value to the user is effectively equivalent to that of electricity from the grid.

Electricity bills may also be credited for solar electricity ‘exported’ to the power grid under the Transitional and Standard Feed-in Tariffs. When electricity is exported on the 25c/kWh Transitional Feed-in Tariff, its value is greater than that of electricity bought from the power grid. On the Standard Feed-in Tariff, however, the value of exported solar power is equivalent to that of electricity purchased from the grid.

(Read more about Victoria’s Solar Feed-in Tariffs.)

It is important to bear in mind that, as the cost of electricity rises, self-consumption will become the increasingly attractive option. As long as the retail price of electricity remains below 25c/kWh, however, the Transitional Feed-in Tariff increases the financial attractiveness of solar power, provided the home or business that operates the system endeavours to export as much solar power as possible.

(Read more: The economics of 1-for-1 Solar Buybacks vs Solar Feed-in Tariffs.)

Download a Solar Power System ROI Calculator for Victoria

How to use the calculator*:

1. Download the Solar Choice Victoria Solar PV ROI calculator (Excel spreadsheet file)

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

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

4. Find out which electricity retailer is offering the best Solar Feed-in Tariff rate in Victoria,

5. 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, as well as Victoria’s Feed-in Tariff rate, may change over time.

© 2012 Solar Choice Pty Ltd 

(Top image via Wikipedia)

James Martin II


  1. Dear Sir/Madam,

    I have a Growatt Sungold 500s. Unfortunately, it is displaying the error message PV Isolation low. The unit was installed about three years ago. Do I need to replace the unit? There are no solar repair technicians in my area, but there are electricians. Also; is the he unit still under warranty?

    I have taken photos of the unit and error message if you need the see them.



    1. Hi Andrew,

      As we’re not solar electricians ourselves we can’t help out in detail on the technical aspects of things, but we can tell you that the standard inverter warranty period is 5 years so it’s definitely worth trying to reach out to Growatt directly to see how they can assist. In a worst case scenario, you can have the inverter replaced with a new one, but you’ll probably need a solar-accredited electrician to do the job.

      Kind regards,

  2. How much power can a system of 27 panals produce in average in winter in Victoria Australia??

    1. Hi Hanna,

      It depends on the wattage of the panels, but assuming they’re 270 watts each (standard size for today but a bit large for a few years ago), that means you’ll have a peak output capacity of about 7.3 kilowatts (kW). In winter in Victoria, that would spell out to about 16 – 18 kilowatt-hours (kWh) per day, depending on the efficiency of the system.

      I hope this helps.

  3. I need to replace my Inverter We have a2.5 kw system installed years ago. Can i replace it with a 3kw unit?

    1. Hi Peter,

      Yes, it’s likely that a 3kW inverter would be a suitable substitute, but you’ll need to speak to an installer about it to work out the exact details. You might also want to consider adding some more panels while you’re at it (again, consult an accredited professional solar installer).

      Hope this helps!

  4. if I install a solar system do I own it ? can I relocate it if I move house?

    1. Hi Russell,

      Yes, you do own all the components (unless you had it installed on a solar lease/PPA deal), but you should have a professional remove and re-install the system. This will cost you a bit with regards to labour. One company you can try contacting about undertaking this sort of work is SolarSafe, who provide after-service for solar installations.

  5. Not sure if you guys can provide advice? I am dealing with a supplier who is suggesting that because there is a long cable run from the panels on the very high (two storey) house to the inverter, we need microinverters for each panel at an extra cost of $110 each (14). I am no electricity expert but surely a better solution is to run a heavier duty cable? I have heard that microinverters are not as reliable as a standard inverter. My guess is that the distance from the furthest panel to a single inverter at ground level might be 20 to 25 metres at max. Surely the power loss from DC would not be that significant in a good quality cable? $1500 extra is huge on a $6,300 installation. Hope you can help quickly. Many thanks.

    1. Hi David,

      Whether to go with microinverters or to just deal with the voltage loss should be relatively easy to calculate in terms of the impact on return on investment & payback times. As a rule, microinverters are generally not a solution that is deployed to fight the problem of voltage drop (although they may go some way in ameliorating this as well), but rather primarily to counteract the effects of shading on solar panels. And yes, you are correct that voltage drop may also be counteracted to a degree by installing heavier cabling.

      We recommend getting a second (and possibly 3rd or 4th) opinion from other installers before you proceed. Solar Choice is a good place to start: You can request a free and impartial Solar Quote Comparison for installers in your area by filling out the form to the right of this page.

      Best of luck with going solar.

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