Solar Calculator | Panel & battery cost, savings, size, payback & ROI
Guide to Buying Solar > 4. Solar Calculator
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Solar panel cost Calculator
What is the price of a solar system?
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It is important to note, that you neither want to pay too much nor too little for a solar system. It might sound strange that you would not want to pay too little, but think about it as if you were going out to dinner. If you pay a small price, you might get a reasonably tasty meal, but it probably won’t leave you feeling particularly spritely afterward. It is the same with solar in that if you buy a cheap system, you are far more likely to have a headache later on. In order to install cheap systems, the company will need to cut corners somewhere. Either on the components that are being installed, or on installation costs.
With solar, as with eating out, there is a pricing sweet spot. Our Solar Calculator is not perfect (see the disclaimer before using it), but you can use it to get a rough idea of what you should pay. This is another reason why we recommend getting multiple quotes when buying solar, so you have a reference point.
Solar Payback & ROI Calculator
Is solar a good investment?
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Whether solar makes financial sense largely depends on where you live. Your location will dictate how much solar you can produce and the relative cost of solar energy vs buying energy from the grid (factors that dictate your return on investment). There are very detailed answers, and many variables for these different factors, so for this guide we will give an overview of the average payback period for solar in some key regions. You can always use our Solar Calculator for more detailed analysis in your area.
Australia has some of the best payback periods worldwide, due to having lots of sun, good government support, and relatively expensive conventional electricity. The average payback period for a 5kW solar system in Australia, if you use 50% of the solar you produce, it is around 4 years (in 2018). According to the consumer advocacy group Choice, that varies from as little as 2-3 years in Adelaide, up to 5-6 years in Melbourne, Hobart, and Darwin.
In the US, the average payback on a residential solar system is 6-8 years, according to the solar quote comparison website, EnergySage. Interestingly, according to Indian Solar market, the payback period for residential systems in India is also approximately 6-8 years.
Battery Storage Payback & ROI Calculator
Are batteries a good investment?
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Similar to the desire for us to provide a safe and comfortable home for our family, many humans also seem to have an innate, evolutionary desire to be able to have full control of our energy needs. However, this desire is usually at odds with both the financial and environmental reasons for going solar. In order to be fully energy independent you need to be completely off-grid, which means you’ll need an awful lot of solar, batteries and a backup generator to keep you going in the depths of winter. However, if you live or are moving to an area without the grid, you have little choice but to be energy independent.
Going solar (without batteries) will not give you much energy independence, it will allow you to consume some power that you produce, but if the grid goes down your solar system is designed to go down with it (lest exporting energy to the grid and electrocuting anyone working on getting it back up again).
See Battery Storage for all you need to know about buying solar with batteries.
Solar system size calculator
How many panels should I get?
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There are a surprising number of factors you can consider when deciding on what size solar system to get. It is worth looking at all of these factors if you are on a budget and have the time, but the very short answer to this question is that the majority of households are getting as much solar as they can fit on their roof (or are allowed by their electricity distributor).
For Australian properties with single phase electricity (that’s most of us) you can usually install up to 6.5kW of panels, with a 5kW inverter, and often you’ll be able to get as much as a 10kW inverter.
US households are not often restricted in system size by the power company, and the usual system size is between 10-20kW. The average is a bit bigger than in Australia because of less restrictions, higher electricity consumption, and larger houses.
That is the short answer, but if you want to know the full details, the long answer is below. In the last section I will also explain why it’s often a good idea to oversize your inverter (get a larger array of panels [6.5kW] than the inverter size [5kW]).
How much solar can you install?
Every electrical distributor (the company that manages the poles and wires) in Australia has different rules about the approval process for installing a solar system. However, the majority will allow up to 5kW for single phase (which are the vast majority of residential homes) and 30kW for three phase (generally commercial properties). The system size is usually limited by inverter output not the nominal panel output, so you can install a larger panel array, but are limited to a 5kW inverter. In some areas you will be allowed up to 10kW on a single phase, and in a few rural areas you might be limited to 3kW. A good solar company will know all these rules in your area back to front.
The other limiting factor is obviously your roof space. See Is my house right for solar for more specifics on this. In short, bear in mind that you can only install what can physically fit on your roof.
How much will you get paid for the solar that you export?
See solar rebates article for details on what you will get paid for exporting your solar. The key point when considering this in relation to sizing your system is that if you get paid a lot for exporting your solar (close to, or more than what you pay for your electricity from the grid) then you will be happy to get a big system and export a lot of your power so you can get paid that high price for it. However, if you do not get paid much (or anything) for exporting, you will likely be better off sizing your system closer to your daytime electricity consumption, in order to maximise your own consumption (and therefore offsetting what you would normally buy), and minimising selling your power for a low price.
Most of the US uses net metering, so you will get paid the same for what you export as the cost for what you consume, so if you are in the US you don’t need to worry about this section.
In Australia, if you search around, you should be able to find a retailer that will pay you 50% of what you pay for your electricity, although many will offer closer to 30%. With a feed-in tariff of 50% of what you pay (for example 15c per kWh, if you pay 30c per kWh for consumption), that is still a pretty decent amount you are getting paid for your solar, and by getting the ‘standard’ 5kW inverter with 6.5kW of panels you will likely still get a very good payback period.
What is your current daytime consumption?
If for whatever reason you are getting a very low, or non-existent feed-in tariff, then you will want to size your system closer to your daytime consumption. Although, don’t worry about being too precise with this calculation, as your consumption will likely change over time anyway.
Have a look at your electricity bill, and work out your daily average usage. Let’s say you use 20kWh per day on average. Then work out roughly how much of that power you use during the day (this will vary considerably during summer and winter, so just use an average). Let’s say 50%. That is 10kWh that you use during daylight hours. In most parts of Australia, you will generate at least 4kWh of electricity for every 1kW of solar that you install. Therefore in this scenario, you would only need a 2.5kW solar system to cover your own usage.
Let’s take a look at how you can increase your daytime usage in order to benefit from a larger solar system, and also check if you might need more a bigger system in future.
How can you utilise more of your own solar?
The short answer is, use more power during the day. Do your washing during the day. If you have electric hot water, have showers during daylight hours. If you have gas hot water, you might want to consider changing to electric (and then shower during the day). Use your dishwasher when the sun is out, and your clothes dryer… actually if the sun is out hang your clothes in the sun!
Do you plan to get batteries or an EV? Future proof your system.
This is a moot point if you are maximising the size of your solar system already. However if you are debating as to whether you need a larger system or not, based on your daytime consumption, do consider whether you might want to add batteries in future. The cost of battery storage is still currently a little high to make it a no brainer, however it is very likely that the cost will continue to come down over the next decade or so. Remember that a good quality solar system should last you 30 years plus.
If in ten years time you might decide to get battery storage, then you should consider sizing your solar system accordingly now. It is not simple to add a few panels to your installed system down the track, for many reasons I won’t go into here.
Consider the example I gave above regarding daytime consumption. If there is a chance in future that you will get batteries, then you would want to consider your full daily usage of 20kW, rather than just your daytime usage of 10kW. That means you would be looking at approximately a 5kW system to cover your usage, rather than a 2.5kW.
Oversizing your inverter
As mentioned in the first section of this chapter, most companies will quote for a system with a larger amount of panels, than the inverter size. There are three reasons to ‘oversize’ your inverter.
A 5kW inverter will always output 5kW of AC power if it receives enough input, whereas your 6.5kW solar panel array’s output will fluctuate drastically throughout the day and year. More often than not, your solar array will operate well below its maximum nominal power. Solar panels are also pretty cheap these days compared to the rest of the cost of the system. Your inverter will operate more efficiently if it receives a higher voltage, therefore it makes sense to oversize it and get close to your 5kW output on a regular basis.
As mentioned in the How many panels should I get? section, most electricity distributors in Australia will limit your inverter size to 5kW. In order to maximise on that restriction, as mentioned in point 1, you can oversize in order to get closer to that 5kW output.
Lastly, why not oversize by even more? In Australia, the government rebates are based on the size of the panel array (not the inverter), so in order to restrict consumers from cashing in on rebates for panels whilst having a completely undersized inverter, they have restricted the oversizing to 30% more than the inverter. For good reason, as that is about the max that you would benefit from oversizing your inverter before you would just be wasting the additional solar panels.
After wading through all the details you can see most answers lead us back to a 5kW inverter with a 6.5kW array of panels being the best option. If you can afford the upfront cost, we think this is a pretty good size system for the majority of households.