Solar Panels Sydney, NSW | Comparing Cost To Savings

Let’s get something out of the way first: Sydney, and New South Wales, for that matter, is not the sunniest place in Australia.

Despite that, however, NSW is still one of the best places on Earth for installing solar panels.

I’m talking affordable solar installation costs through incentives, an otherworldly return on your investment, a shorter-than-average payback period, and, of course, massive amounts of savings.

Today we’re talking all about solar panels in NSW. Here’s a list of everything covered here:

• How much power do solar panels in NSW generate?
• How much money can you save?
• NSW Government incentives (rebates, tariffs, etc.)
• What’s the cost of installing solar in New South Wales?
• Are solar panels worth it?
• Do you need to buy a solar battery?

How much power can solar panels generate in NSW?

New South Wales trails behind the Northern Territory, Western Australia, and Queensland with regards to sunshine hours. That doesn’t mean it’s a bad place to invest in solar panels, though.

It is, in fact, great for the simple reason that solar panels installed here can still generate a generous amount of solar power. This, in turn, equates to a lower electricity bill.

Having said that, the table below shows how much power you can expect a standard-quality solar system to generate in NSW.

Note that these figures are calculated using PVWatts‘ calculator with a roof pitch of 22.5% and an inverter efficiency of 96%. If your solar panels are of higher quality and/or your roof’s pitch is more optimal, your solar system should be capable of generating more solar power.

Recommended:

• The best roof pitch for solar panels in Australia
• What direction should solar panels face in the AU?

How much money can you save with solar panels in New South Wales?

Well, that depends on a lot of factors, including the size of your solar system, how much energy you consume, how your solar panels are oriented, the value of your feed-in tariffs, and other things.

We have a separate article dedicated to discussing how much money you can save with a solar panel system. But, to give you some context, listed below are sample savings profiles based on the following assumptions:

• Electricity costs 34 c/kWh (the average price of electricity in NSW).
• Households have an annual average electricity usage rate of 4058.82 kWh and a monthly average usage of 338.24 kWh (based on the average quarterly bill of $345).
• A system size of 1 kW puts out 1500 kWh of power annually and 124.91 kWh monthly (based on the table above).
• Solar batteries are used to store all energy, and all solar energy is used by households.
• Feed-in tariffs and varying weather conditions are disregarded.

Needless to say, the savings here are all just rough estimates. There are many things to consider here, after all.

For example, solar batteries. If you don’t have a solar battery, then you’re going to end up sending your excess solar energy to the grid, and they don’t pay you for your energy nearly as much as you pay them! This brings us to our next topic.

Government incentives (rebates and feed-in tariffs)

Solar rebates in NSW

Solar rebates in New South Wales come in the form of small-scale technology certificates (STCs). They’re a big part of how the Australian government is incentivizing the switch to cleaner energy because they make buying solar panels so much more affordable.

The more STCs your system is eligible for, the more rebates you get. We have another article that discusses this eligibility in better detail, but, for brevity’s sake, the Australian government (Clean Energy Regulator) has a free STC calculator that you can use.

Solar feed-in tariffs in NSW

Another one of these incentives in New South Wales is the solar feed-in tariff (FiTs). These are credits that you get for sending your excess solar energy to the electricity grid. Your electricity retailer will then, in turn, deduct these credits from your electricity bill. Thus putting more money back in your pocket.

The catch is that the rate of feed-in tariffs is far lower than the price to buy electricity. For context, the highest feed-in tariff rate in NSW right now is 15 c/kWh from the electricity retailer AGL. But, as previously mentioned, the average price of electricity here is 34 c/kWh.

Other incentives from the NSW government:

• Solar for low-income households: Provides financial assistance, grants, and subsidies to eligible households.
• NSW rebate swap for solar (for homeowners): Allows eligible homes to swap their low-income household rebates for a 3 kW solar system.
• Rebate swap for energy-efficient upgrades: Low-income households can choose to swap their rebates for home and appliance upgrades that lower their electricity consumption.

How much do solar panels cost in New South Wales?

Based on the data we’ve gathered, the average cost of solar panels in New South Wales is roughly $1025 per kW. This, of course, includes solar installation costs and rebates.

However, we also observed that solar panels cost less per kW the larger your system gets. For example, let’s say you have two homes. Homes A and B.

• Home A is a smaller house, so you only needed a 3 kW system that cost you $3780. That’s $1260 per kW.
• Home B is a mansion, so you had a 10 kW solar system installed that cost you $9800. That’s $980 per kW.

Needless to say, these numbers are averages. They will be subject to change depending on multiple factors, including the quote you get from your installer.

To that point, we have a network of pre-vetted solar panel installers at our disposal. Just let us know if you need their help, and we’ll get you 3 FREE quotes from them right away.

“It looks expensive. Is it worth it?”

Good question. And yes, solar panels are a big investment, but, yes, they’re well worth it. Especially in New South Wales.

I say this confidently because the return on investment (ROI) and payback period say so. Let’s do some math so I can show you what I mean:

Return on investment (ROI) of solar panels

To calculate the estimated ROI of solar panels, you’ll need the following equations:

• ROI = (net savings ÷ total cost) x 100.
• Net savings = annual savings x life span of the solar system (25 years).
• Cost of installation = cost per 1 kW x system size

Now, let’s use these equations using the projected savings and solar panel installation costs listed above. Also, let’s use a 6 kW solar system as our example because it’s the most commonly used system in Australia.

• Net savings (6 kW solar system) = $3060 x 25 years
  • Net savings = $76,500
• Cost of installation = $1025 x 6 kW
  • Cost of installation: $6,150
• ROI = ($76,000 ÷ $6150) x 100
  • ROI = 12.36 x 100.
  • ROI = 1236%

In non-math terms, this just means that if you spend $6150 on a 6 kW system, you’ll save a total of $76,500 over the life of your solar panels. That’s a 1236% return on your investment. Any businessman will tell you that those numbers are an absolute win.

Of course, this isn’t a perfect example. These equations don’t account for degradation, dirt buildup, weather, and all other things that could impact your system’s solar power generation, but it will still be a wildly impressive ROI.

Payback period for solar panels in New South Wales

The payback period refers to the time it takes for your solar power system to recover the cost of installing it. This is important because after this period, you will enjoy free solar power.

As always, there are many factors that can affect how long it takes to pay for your solar panels, but let’s keep it simple using this equation:

• Payback period = total system cost ÷ annual savings

Let’s use a 6 kW solar panel system as our example again.

• Payback period = $6,150 ÷ $3060
  • Payback period = ~2 years

Imagine investing 6150 AUD and, after 2 short years, having free energy for 23. Wouldn’t that be cool? However, again, this is all under perfect conditions. Your payback period might be longer than this, but it still shouldn’t be by a lot.

Depending on your financing situation, a payback period of 6–10 years is still considered normal and, more importantly, good.

What about solar batteries? Should you buy them?

As it is everywhere else, the price of a solar battery can vary widely. For residents of NSW, you can expect a battery to cost $820 to $1960 per kWh. This includes the cost of installations.

These prices depend largely on the capacity and brand of the battery. Larger-capacity batteries tend to be cheaper per kWh. More well-known brands, like Tesla, for example, also cost more than their counterparts.

Yes, you should buy a battery, but only if…

You have a lot of excess solar power, and it financially makes sense for you.

Having a battery to store your unused solar power makes you less reliant on the grid. It also makes you capable of maximizing your solar energy usage. Both of these reasons significantly lower your electricity bills, bloating your savings even more.

However, they’re still quite expensive, so we can’t recommend them to everyone in good conscience. Make sure you size your solar panel system appropriately instead, so you don’t have excessive amounts of unused solar power.

But if a battery makes sense for your system and financial standing, here’s a list of solar batteries that we recommend.

Conclusion

In summary, harnessing solar energy in New South Wales is both financially wise and environmentally beneficial. Homeowners who switch to solar can anticipate considerable reductions in their electricity bills, a strong return on investment, and a relatively short payback period.

Not only that, the government also has a host of incentives, including feed-in tariffs and small-scale technology certificates, that make the initial setup costs even more accessible.

And, last but not least, we’re here to help, too. If you don’t have a solar installer yet, we have a pre-vetted network of them ready to give you 3 FREE quotes at a moment’s notice.