Why Is Solar So Cheap in Australia Right Now?

Noticed that solar is incredibly cheap in Australia? Find out why and what you can expect to pay.
Solar in Australia historically cheap

We’re called the lucky country for many reasons, and the price of solar is one of them! Aussies enjoy some of the cheapest solar installations in the world. With more than 1 in 3 homes reaping the benefits of rooftop solar, it’s not hard to see why solar uptake has been steady for decades. We’ll explore the reasons why solar is so cheap and what you might expect to pay when you choose to go solar.

Factors that influence the price of solar in Australia

There are a number of things that impact the price of solar:

  • Rebates and incentives
  • Wholesale solar purchases
  • Competition in the market
  • The Australian dollar
  • End of the financial year and end-of-line components

Let’s take a closer look at the main influential factors.

Rebates and incentives

Australians are spoiled with very generous government incentives to go solar. The federal Small-scale Renewable Energy Scheme has been one of the main driving forces behind reduced upfront costs for solar installations on homes and small businesses. Most state governments have reduced or removed their rebates and incentives, with Victoria being the last remaining state to fully back residential solar and batteries with rebates and loans. However, some states are planning to reintroduce incentives to increase solar and battery uptake.

Wholesale solar purchases

Your solar installer purchases solar panels in bulk. Wholesale solar has increased exponentially due to increased manufacturing efficiency and lower production costs across China and Southeast Asia. The reduced cost to manufacture has seen wholesale prices drastically lowered, with the cost of solar panels hitting as low as 20c per watt. An abundance of panels has also seen an oversupply and many large solar installers housing excess stock.

Competition in the market

Scan through the CEC-approved components lists and you’ll find that there’s no shortage of options for Aussies! Competition has driven down the overall cost of solar panels while improving the quality of the panels and inverters manufactured.

The Australian dollar

A weak Aussie dollar will cause the cost of solar energy to increase. This is due to purchasing power and the cost of wholesale. AUD has slowly been strengthening against the USD, which naturally brings down the cost of wholesale solar for Aussie businesses.

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Copyright Energy Matters 2024

End of the financial year and end-of-line components

As the financial year draws to a close, solar retailers will be offloading their excess stock at reduced costs. This is fantastic news for homeowners looking to take advantage of the end-of-financial-year sales. Something else that drives down the cost of some components is when they reach the end of the line for their CEC approval. For example, models certified to IEC 61215:2016 will expire on the 30th of September 2024. Any component with this certificate will not be eligible for STCs after this date. Installers will be very keen to clear any stock that will soon be obsolete, though perfectly safe to install and use.

What can I expect to pay for solar in Australia?

It is important to keep in mind that there are two different prices involved here: what your installer pays and what you will pay

While solar is historically at its cheapest, solar retailers will still add their margin, and they are not impervious to the increased cost of living. The figures in the graph below, provided by Solar Choice, display the average price per watt for solar installation – not the cost for the retailer.

As of May 2024, the following is what you can expect to pay for solar in your state and across Australia. The figures factor in state and federal rebates and incentives.

Adelaide, SA$3,760$3,910$4,610$5,300$6,370$8,530
Brisbane, QLD$3,700$4,540$4,980$5,420$6,210$9,140
Canberra, ACT$4,510$4,760$5,150$5,810$6,770$8,770
Darwin, NT$4,730$6,780$7,760$9,320$10,060$13,060
Hobart, TAS$5,050$5,610$6,180$6,750$7,710$11,190
Melbourne, VIC$4,300$4,420$4,940$5,420$6,330$8,510
Sydney, NSW$3,850$4,230$4,700$4,880$5,920$7,970
Perth, WA$3,370$3,890$4,210$5,360$5,950$9,760
Source: https://www.solarchoice.net.au/solar-panels/solar-power-system-prices/

Should I invest in solar now or wait for prices to fall further?

The overall cost to install solar has plateaued since December 2020. Small-scale Technology Certificates (STCs) will be reduced again on January 1, 2025, as they did on January 1, 2024. This will decrease the amount of upfront discount you will receive and increase the overall cost of your solar system. The amount you receive as an upfront discount will reduce each year until it vanishes completely in 2030 – the end of SRES. 

Looking across to the USA, they have experienced drastic increases in the cost to install solar due to the removal of almost all incentives. While we may not end up in the exact same boat, we should expect the overall cost to install solar to be more expensive in the future.

That was a long way of saying that the time to install solar is now! Here are some quick tips to make sure you’re getting the best bang for your buck:

  • Get multiple quotes
  • Utilise seasonal sales periods (EOFY, Christmas, etc) to shop around for the best deals
  • Do your research. Understand how much energy you use, your future needs, the brands and models of solar panels, inverters, batteries, etc available, and what your budget is.

Energy Matters provides a 100% FREE service for quotes for solar, batteries, EV chargers, and more. We work with a nationwide team of solar installers who will provide you with tailored quotes to get you started on your solar journey. Follow the link below and go solar today!

Get a quick solar quote, or contact us today toll free on 1800 EMATTERS or email our friendly team for expert, obligation-free advice!

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