The time it takes for a household to pay off their solar system could soon drop to as little as three years, according to new data from an industry regulator, prompting industry experts to pin this as the time to get solar.
In its quarterly carbon report, the Clean Energy Regulator (CER) forecasted that the average payback period for rooftop solar could drop from four to three years for households in the next 12 months.
A payback period is essentially the amount of time it would take for a household to see the savings generated from their solar system outweigh the total cost of the installation.
The shorter time period was forecasted as a result of rising electricity prices, with the CER claiming that if prices increased by 50 per cent over the next two years, as estimated in the most recent Federal Budget, then now could be a good time for capable households to invest in rooftop solar.
Mick Fell, General Manager for Qcells’ Arcstream Virtual Power Plant (VPP), agreed with the CER’s sentiments and said it was time for households to pull the trigger.
“The best time to get solar was yesterday and the second-best time is today,” he said. “This time last year, we weren’t worried about the war in Ukraine. For those of us energy nerds who watch the market, we might have been worried about LNG (natural gas) prices, we might have been thinking about electricity prices in the forward market, but the rest of the world wasn’t.”
“All of that has changed in the last six months.”
In the July to September quarter this year wholesale electricity prices were at their second-highest figure on record and double what they were 12 months ago, according to the Australia Energy Regulator (AER). Some states even recorded as much as a $194 increase in prices since the same quarter in the previous year.
Mr Fell reiterated that the energy price-ache was far from over and prompted consumers to consider their options when it comes to solar and battery systems.
“The report does say in a roundabout way that if the price for hardware stays the same and the current policies stay the same, then the best time to buy solar is now. Bank your three years, be happy,” he said.
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If now’s the time to install solar then what should I be looking for?
With several industry experts now prompting households to take the plunge with solar, it’s likely the number of quotes for solar installations or expressions of interest will increase into the next year.
But for homeowners that don’t have a finger on the pulse when it comes to the world of solar energy, this process may be a little daunting and at the very least, confusing. Particularly as the market evolves post-pandemic and with Small-Scale Technology Certificates (STCs) – the ‘rebate’ that helps reduce the upfront cost of solar – steadily declining.
Mr Fell said the advice around asking for the cheapest prices or best discounts that had been prime a few years ago for solar installations may not be as relevant anymore.
“Regardless of where you start, there’s some things that have changed in the environment. There are questions I’d ask tomorrow that I wouldn’t have asked yesterday,” he said.
“One of these things is the time to the installation. It is not uncommon now to wait about three months from when you sign the contract to get the installation. Some of that is due to panel availability. Some of that is labour availability.
“So, the question I’d ask now is: how quickly can I install it? A different question than five years ago, which was more like: how cheaply can you install it?”
Other considerations Mr Fell would recommend new solar customers to make are around local support.
“Local support is delivered in a whole bunch of different ways but you’d be looking for longevity of that company in the market,” he said. “We’ve got lived experience now. My advice to consumers would be to perhaps go through door number one, pay that little bit extra and be happier with the long-term decision that they’ve got.”
Qcells, the solar company Mr Fell represents, has been in the Australian solar industry since 2009. Under its Arcstream brand, the company offers an end-to-end solar solution for households, which covers panel and battery products, installation and a speciality energy plan with access to a Virtual Power Network (VPP).
The company also recently announced a partnership with fin-tech lender Plenti, which allows customers a 10-year period to pay off their solar system.
Compare Solar Plans & Prices
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information. Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
What’s the current state of solar installs in Australia?
Solar installation numbers continue on an upwards trend year-on-year, according to the same report by the CER. The total number of installations however, had dipped to pre-pandemic levels, with only 65,765 new rooftop solar installations recorded in the third quarter of 2022. For context, well over 100,000 rooftop installations were recorded in one quarter during the height of installations in the pandemic.
The dip in installation numbers this quarter were a likely cause of supply chain constraints, COVID-19 restrictions, interest rate rises and higher system costs, according to the CER.
In terms of which states and territories had the most interest in rooftop solar, New South Wales led the pack, taking up 33 per cent of the total installations during the three-month period. This was followed closely by Queensland. Coincidentally, it is both of these states that have suffered the most volatile wholesale electricity prices during the crisis.
As for the cost of a solar panel installation, most Australians are looking at an average of $5,450 for a standard 5kW system, according to Solar Choice’s November price index. When looking at capital cities, it’s Perth, Adelaide and Melbourne that currently score the cheapest installation costs for a 5kW system, while households in Darwin and Hobart copped the highest installation costs.
Looking to install solar? Check out our state and territory guides:
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