The Australian state in which people live in can have a major impact on the purchase of a solar panel system. Feed-in tariffs vary greatly. Rebates are available in some states and not others. Service providers offer access to a myriad of solar power products and are different in the service they provide and the warranties they offer.
This article will demystify many of these aspects to ensure people are equipped with the right knowledge to make smart, lifechanging decisions. It will be broken down into the following categories:
While this is not an exhaustive list, it will give up-to-date information for homeowners to determine the best choice for their specific needs.
The overhead costs
The solar power industry has benefitted greatly from advances in solar panel technology and reductions in production costs – which have declined by almost 40% over the last six years. However, the price does vary depending on which state a solar panel system is obtained.
In the previous article “Understanding Solar Payback Time For Saving Money Over the Next 4-7 Years,” we examined statistics by using a baseline of a 6.6-kilowatt system. For simplicity, this system will also be the basis for the examples in this article.
When it comes to purchasing a solar panel system there are two primary factors in how much it will cost. The first is the size of the solar panel system, measured in kilowatts andrepresented in the number of solar panels installed. The second is the type of solar panels.
For the latter, two options are most popular: monocrystalline (micro) panels and polycrystalline (poly) panels. There is also a third option in the way of thin-film panels, however, these types of panels have become outdated with advancements in technology – although some solar providers may still offer this choice.
What is the difference between micro and poly panels?
The simple answer is that mono panels cost more per kilowatt but have higher performance in terms of how much electricity they can produce, as compared to poly panels, which cost less but generate less electricity. The average across all states in Australia for a poly panel system (the most common) is between $1,200 – $1,600 per kilowatt. However, if you live in the Northern Territories or Tasmania, you’ll be paying an average of 30% more for your solar panel systems due to location and the logistics involved. In Victoria and New South Wales, you’ll be paying closer to the lower half of the average for your system.
Annual output
The annual output of solar panel systems also differs from state to state due to weather, access to more readily available sunlight, and geographical location. For this example, we will use a 6.6-kilowatt system at a northern facing angle to represent the average. This is because most households and businesses won’t be able to adjust their system to face in the optimal direction for power generation at all times.
Tasmania offers the lowest annual outpost of 7,600 kilowatt-hours, meaning it will be the state with the longest solar payback time and the lowest in terms of the savings. Victoria and New South Wales are about even with 8,000 and 8,600 respectively, making them the next highest. Having said this, many households in Victoria and New South Wales with 6.6-kilowatt systems have been able to reduce their annual electricity costs to almost nothing and, in some cases, generating income.
South Australia, Queensland, the Australian Capital Territory, and the Northern Territory are all very similar sitting at an annual output of 9,400 kilowatt-hours (with the Northern Territory reaching just under 10,000). It is very common for homeowners in these states to generate enough solar electricity to receive positive bills – meaning they are in fact earning income from the electricity that their systems are generating.
Finally, Western Australia is the highest generating state in Australia with a consistent annual output of over 10,000 kilowatt-hours. Homeowners who have solar systems installed in this state generate significant incomes which help to free up their finances more so than other states.
However, solar products vary in quality and efficiency. These factors are tied in with the solar providers available in the states.
Solar providers
There are many different solar providers from state to state and the areas in which they offer their services. The above price per kilowatt is based on the average, but certain areas can see variances of more than 200% in the quotes people can receive. But why is this?
Understanding the differences in quotes can at times seem impossible to navigate, but the discrepancies in pricing are down to several factors. These are:
Just like in every industry, the brand of the product can drastically affect the price and the cost-effectiveness – depending on what you’re after.
Average cost – cheat sheet
But what to do with the information obtained? Compare the quotes with the cheat sheet below:
As mentioned previously, states that have higher logistical costs such as the Northern Territory can see the average prices increase in cost by up to 30%. Inner-city installations also differ in price compared to those made in the suburbs and the countryside.
If the quoted total price is drastically lower than the averages above, you may want to ask them precise questions in terms of the service and warranty offered. This is because they may be sacrificing the quality of the product itself, the quality of installation, the level of customer service they provide, and/or the warranties attached to those systems.
Feed-in Tariffs (FITs)
The solar feed-in tariffs (FITs) currently offered throughout Australia are net schemes. This means that for every unit of solar electricity that you export to the local electrical grid, you receive credit on your electricity bill – saving money and sometimes generating an income.
However, it is important to point out that FITs vary from state to state, which inherently affects the amount of money you received for exporting electricity (generated by your solar system) into the grid.
In Victoria, there are two Government FITs available: a flat rate and a time-varying rate. The flat rate is a minimum of 9.9c per kilowatt-hour. The time-varying rate ranges from 7c – 29c per kilowatt-hour – changing depending on the time of day (example: peak/off-peak). However, households can search the solar market to find better offerings depending on the supplier.
In South Australia, the Australian Capital Territory, Tasmania, Queensland, and New South Wales there are no minimum rates and solar customers often find themselves searching the market for competitive rates. The average ranges in these states are:
In the Northern Territory, there is a special solar buyback scheme through “Power Water,” offering an average of 8.3c per kilowatt-hour. Finally, in Western Australia, there are two electricity networks. Horizon offers a varied rate and Synergy offers a minimum of 7.2c per kilowatt-hour.
It is important to understand these rates because they can drastically affect the savings you generate from a solar system. A perfect example here is that while Western Australia has the highest annual output, it offers a low minimum rate depending on which electricity network the household is connected to.
Will it affect your purchase of solar?
If you are looking to purchase a solar panel system for your home or business, you have probably realized that it is a great way to save heaps on your electricity bills, regardless of what state of Australia you live in. In that respect, lowering electricity bills are universal, regardless of the state in which you live– meaning that as a long-term investment (which solar panel systems are) the sooner you invest, the sooner you save.
In states like Victoria which have a “solar homes rebate” to aid in the initial investment of a solar panel system, it makes perfect sense to act now by purchasing a solar system, so that you can reap the financial benefits associated with solar and relieve the stress of rising energy costs.
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