The Cost of Solar Power vs The Grid
There are now millions of solar systems installed across Australia and for good reason!
Solar power is significantly cheaper than buying power from the grid, and with generous government incentives available, solar power is a no-brainer for most Sydney households. Especially now that so many of us are spending more time at home.
So let’s get into the numbers… what is the real price of solar power vs the grid?
System Output: According to the Clean Energy Council Guidelines, a solar power system in Sydney generates 3.9 kWh a day per kW.
For example, a 10kW system will produce 39 kWh a day averaged out across the year (it will produce more power in summer and less in winter). We have found this figure to be conservative, but let’s stick to the guidelines for this example.
The System’s Life: LG Solar NeON 2 panels come with a 25-year performance warranty that states that after 25 years the panels will generate at least 90.08% of their original output. For example, a 360W panel will be producing 326.88W after 25 years.
So in the first year, a 10 kW system might produce 14,200 kWh and in the 25th year, it may produce somewhere in the ballpark of 13,000 kWh.
The other consideration is that the inverter will probably need to be replaced at least once over the 25 years.
If you stick to the good brands, an inverter is expected to last up to around 15 years, the cheaper Chinese models have a life expectancy of much less – sometimes not much longer than their 5-year warranty or even worse.
The best option is to get microinverters, as they have a much longer life expectancy, a lower failure rate and a 15-year warranty. More info on that here: the reliability of Enphase Micro Inverters
Let’s budget $2,000 for repairs and replacements.
The Cost of a 10kW Solar System per kWh
The price of a solar system varies depending on the quality of the products you buy, so let’s look at two options, using top-of-the-range LG NeON 2 solar panels with either a European Made string inverter or Enphase Microinverters.
As a ballpark figure, the string system will cost $13,000, plus the $2,000 for a new inverter/ repairs.
If we expect the system to produce 337,770 kWh over 25 years, we have a cost of 4.4 cents per kWh!
With the Enphase system, let’s go with a ballpark cost of $16,000 plus the $2,000 for repairs and replacements. Over 25 years, we have a cost of 5.3 cents per kWh – compare this to your power bill to see just how much cheaper it is!!!
Due to the panel level output of Enphase systems, on average our Enphase systems output 110% of their expected performance.
Therefore, you can expect to get significantly more output from your Enphase system than the Clean Energy Council Guidelines. This increase in output along with a significantly longer life expectancy means the cost of an Enphase system is approximately the same as a standard inverter per kWh over the life of the system.
How does this compare to the cost of power from the grid? On average, a house in Sydney pays around 22 to 38 cents a kWh plus GST, and up to 52 cents between 2 pm and 8 pm if you have time-of-use billing.
It quickly becomes apparent why solar power is so popular! It is many times cheaper than buying power from the grid.
The biggest factor that affects your price per kWh is whether you are able to use the solar power in the home or whether you send it off to the grid. A typical feed-in tariff is now around 10-12 cents a kWh (this can vary a lot so it is important to find a good deal with an energy retailer). So even if you don’t use some of your solar power, you are still able to generate it for around 5 cents per kWh and then sell it back to your energy retailer for a significant profit!
It’s no wonder so many households are now literally filling their roof with panels.
Request a quote by filling in your details below. We can help you accurately size up a solar system without any sales pressure. We want you to have all the right information before you make a decision on what system you’d like to install.