How much does solar power cost in Australia?

There are 2 main ways in which a home solar system offer benefits, both of which have the effect of reducing your energy bill.

1. Offsetting your energy consumption

The primary way in which solar can help you reduce your energy costs is by reducing the amount you need to buy from your electricity provider which typically will cost between 20-40c per kWh.

Solar systems are installed with technology that tell your appliances to use solar power first before ‘buying’ energy from the grid.

This is usually referred to as ‘self-consuming’ your solar energy.

2. Feed in tariff for excess energy

Any surplus energy that is generated by the system can be sold back to your energy retailer at a rate called a feed in tariff. In some states (WA and NT) these rates are fixed and in other states its up to your energy retailer what rate they offer you.

In Victoria there is a mandatory minimum of 10.2c per kWh.

Generally speaking, your feed-in tariff rate is always lower than the rate you are buying power for.

Your ability to access a feed-in tariff is also usually limited to a maximum solar system size.

The feed in tariffs are usually fairly low compared to how much you buy energy for (and rates have been dropping lately).

It usually doesn’t make sense to go for a large system size unless you have large energy usage.

Maintaining a high ‘solar self-consumption’ rate will help you optimise your return on investment.