Are solar panels still worth the investment in Victoria? It would seem so: According to data from the Australian Photovoltaic Institute, some suburbs in Melbourne (such as Clyde) have over 70% of the roofs with a solar panel installation. Perhaps you’re already convinced about the cost-saving benefits of going solar. You just want to know the best solar panels to install on your roof. This article takes a look at the case for solar power in Melbourne, Victoria.
Interested in solar power for your Melbourne-based business? See our article on Commercial Solar Power in Melbourne.
How much power do solar panels produce in Melbourne?
Australia is home to some of the best solar energy resources in the world. Although Melbourne, Victoria is a bit further south than Brisbane or Sydney, there’s still enough sunshine to make panels a worthwhile investment.
According to PVWatts, a typical Melbourne home’s roof receives about 4.8 kilowatt-hours (kWh) of raw sunshine per square meter per day, while the Bureau of Meteorology website averages work out to about 4.18kWh. Essentially, this sunlight is the ‘fuel’ for the system. If a solar PV system could be 100% efficient (which is not physically possible), a 1 kilowatt (kW) solar system in Melbourne would produce between 4.18kWh – 4.8kWh of energy per day, and a 2kW system would produce between 8.36kWh – 9.6kWh per day.
In real life, however, there are efficiency losses that must be taken into account between the time the sun hits your panels and when it exits the system’s inverter. The table below shows rough daily energy output figures for a range of popular solar system sizes if installed on a north-facing roof in the Melbourne area, assuming an efficiency loss of about 25% (to be conservative).
Estimated power output for solar panel Melbourne systems | ||
| Solar system size (kilowatts) | Avg daily system output* (kilowatt-hours) | Annual Output* (kilowatt-hours) |
| 3kW | 9.4kWh – 10.8kWh | 3,686 kWh |
| 5kW | 15.7kWh -18.5kWh | 6,241 kWh |
| 7kW | 21.9kWh – 25.2kWh | 8,614 kWh |
| 10kW | 31.4kWh – 36kWh | 12,300 kWh |
* Output calculated using PVsyst software
How solar energy saves you money
When you are grid-connected with no solar system, you have to purchase all of your electricity from an energy retailer. Typically, you will pay at least 21c for every kilowatt-hour that you use.
Having solar panels will allow you to save money by reducing your need to purchase energy from the grid – every unit of solar energy that you ‘self-consume’ in your home is a unit that you do not need to pay for. You can also earn credits for selling your energy into the grid (current state minimum set at 6.7c per kWh), but you’ll save far more money by focusing on maximising your solar self-consumption.
There are two ways to ensure you’re using as much of your solar energy as possible:
- Make sure your system is the right size for your home, and
- Know your electricity consumption pattern and behave accordingly.
What rebates exist for solar panels and batteries in Victoria
Federal STC Upfront Rebate
For those looking for solar rebates, the federal government’s Renewable Energy Target contains a mechanism that reduces the up-front cost of solar installations under 100kW in capacity. The actual value of the incentive depends on a number of factors such as location and system size, but usually works out to be about 30% of the total installation cost.
For example, a commonly selected 6.6kW solar panel system would create 70 certificates (using the Clean Energy Regulator’s calculator) at a current price of $36.9 per certificate which would lead to a rebate of $2,583.
Solar Victoria Rebate
Solar Victoria is the body the state government has set up manage the delivery of the Victorian Government’s Solar Home Program – which offers an additional rebate to the federal program to eligible solar panels Melbourne customers. Importantly this is in addition to the federal STC rebate mentioned above – you don’t have to choose between them.
If eligible, your rebate could be as high as $1,400 for solar panels and $3,500 for solar batteries. There are also interest-free loans available for eligible Victorians. To access this rebate you will need to assistance of a CEC Approved Solar Retailer – you can instantly view quotes via our online comparison in the link below.
Compare quotes from up to 7 installers in your area now.
How much do solar panels cost in Melbourne?
Thanks in great part to the STC rebate and the Victorian State scheme, Melbourne is home to some of the lowest PV system installation prices in the world – one of the reasons that there is such a large amount of rooftop solar installed across the state. Solar Choice has been tracking price trends in Australia’s capital cities since 2012 in our monthly Solar PV Price Index. The below tables show that the cost of solar in Melbourne is very close to the national average.
Based on our data from July 2023, the average cost of a common 6.6kW solar panel system in Melbourne is $6,030 including the STC rebate and GST but excluding the state rebate. So if you are eligible for the Solar Victoria rebate of $1,400 your costs could be even lower!
As you can see from the below graph the cost of solar panels in Melbourne and across Australia has fallen significantly over the last decade as the efficiency of production scale of solar equipment has rapidly increased.
Compare quotes from up to 7 installers in your area now.
Are solar panels worth it in Melbourne?
According to our analysis, Victorians who are eligible for the Solar Victoria rebate have the best case for solar anywhere in Australia, including those in the sunny northern parts. As you can see in the table below for typical use cases, solar panels Melbourne customers can save up to $2,200 on their annual energy costs with a payback between 3-5 years.
The prices in the below table are average costs, however, you can view a full range of quotes on our free-to-use online comparison portal. Keep in mind, however, that while lower prices don’t always necessarily mean lower quality, they should be approached with a healthy degree of caution; a solar panel system should continue to produce power for up to 25 years (with inverter replacements every 7-13 years). Any system downtime (due to component failure, for example) will result in extended payback periods – not to mention the costs that may be incurred for repairs/replacements not covered under product warranty.
The self-consumption ratio of 40% assumes that there is a reasonable amount of energy use during the daytime. If you are out of the house every day and only use energy in the morning and evening (and are unable to move your power loads like dishwashers and washing machines to the middle of the day) you may experience lower financial returns that what’s picture below.
| Indicative Returns for solar panel systems in Melbourne – Updated June 2024 – | |||||
| Solar Panel Size | Average Cost (after rebates) | Average Daily Energy Usage | Self Consumption Rate | Annual Savings | Payback Period |
| 5kW | $4,970 | 15 kWh | 40% | $890 | 5.4 Years |
| 6.6kW | $5,380 | 20 kWh | 40% | $1,183 | 4.4 Years |
| 10kW | $8,400 | 30 kWh | 40% | $1,780 | 4.6 Years |
| 15kW | $12,600 | 45 kWh | 40% | $2,669 | 4.6 Years |
Assumptions/limitations of this analysis
- Assumes energy price of 30c / kWh which is towards the middle of what is offered in Melbourne
- Assumes a solar feed in tariff of 5c / kWh which is the current state minimum
- Average costs come from the Solar Choice Price Index for June 2024
- Your self-consumption rate will vary depending on how you use power in your home. At higher rate, means less power is exported to the grid and improves your financial return
Use our calculator to work out the return for your own specific details in Melbourne
What about solar battery storage in Melbourne?
In general, the return on investment for solar batteries in Australia is lower than solar panels. This is mainly due to the fact that the cost of batteries hasn’t (yet) gone through the dramatic fall in price that we have seen solar panels take over the last ten years.
At Solar Choice we are following these prices very closely and we regularly perform an assessment of the financial return of batteries in our ‘Are solar batteries worth it?‘ article. The short answer is, despite the state government rebate of $3,500, for most people the financial payback alone will not merit the high cost required to install a battery.
See the below 3 use cases we have examined closely to assess the payback period for an optimally sized solar and battery system. Note each use case has a different energy usage load profile which affects their savings.
| User Case | Solar and Battery Solution | Total Year 1 Savings | Payback Period Solar & Battery | Payback Period Battery Only |
| Young Adults / Older Family | 5kW of Solar Panels and a 3.5 kWh battery | $891 | 8.5 years | > 20 years |
| Retirees / Young families | 6.6kW of Solar Panels and a 6.5 kWh battery | $1,391 | 7.1 years | > 20 years |
| Big Energy User | 13 kW of Solar Panels and a 13.5 kWh battery | $2,262 | 7.0 years | 12.6 years |
To see all of our assumptions and the methodology of this analysis see our full article.
Why then are so many Victorians installing batteries alongside their solar panels? For many people the opportunity to access a $3,500 rebate is too good to pass up, whilst for others there are some non-financial reasons that motivate the installation of a battery. After recent bushfire seasons energy security has risen to the top of everyone’s minds and the only way to keep the lights on in your house without installing a generator is to have a solar and battery system.
Also important to mention that the transition away from coal power in Australia won’t be possible without much more battery capacity. While it’s not going to be the responsibility of solar panels Melbourne customers to supply this capacity, every little bit helps!
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FAQs
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i want to know if its possible to add a wind generator to an exciting solar system on the grid. surely theirs a way to obtain the same watts /amps from the generator as what the solar panels are producing .
thanks
Hi Steve,
A wind generator would generally require its own inverter, although there are some speciality products out there that will do both solar and wind at the same time.
looking at the last 3 bills I see that we use between 4 – 5 kW/h per day
What size system would be suitable for us in Melbourne, allowing for the possibility of battery storage add-on later
David Rees
Hi David,
Congrats on your very low level of energy consumption! Pretty impressive.
I’d recommend that you check out two of our tools: 1) Our Simple Solar System Sizing Estimator Tool, and b) our Solar & Battery Storage System Sizing Estimator Tool. While neither of these will give you a definitive answer to your question (talk to your installer for something closer to that), they will give you ballpark figures.
You can also request solar & battery quotes by filling out our form to the right of this page.
I have 2 systems on my home. 1 is directed East and the other is directed West.
We were not happy that the West profile was correct and when we asked for advise we were told that we would void our warranty should we change, so we bought an additional system.
Given the returns the East facing produces far more Ray’s than the other.
Could we get this West facing lot moved or elevated so that we would get better results?
Hi Fred,
Have you checked for shading on the western array? Or is it a problem with the orientation of the panels (I imagine they might be facing slightly south-west as opposed to due west?)
Could be a costly operation to move the panels over to the east side, but wouldn’t know until you got some quotes from an installer. And even if you did move them you might still have the same issue with voiding your warranty.
What sort of output are you seeing form the west-facing array vs east-facing?
We’ve recently moved into a property with an older 2kw grid connect system. However, the panels are mounted almost flat and are facing east. Would it be worth getting someone to re-mount them on a tilt frame and turn them to face north?
Hi Phil,
It’s probably a good thing that they’re nearly flat if they’re east-facing, as they’ll be able to capture more of the sun during the day. I ran some quick numbers using PVWatts and can see that you’d generate about an extra 300kWh of solar energy per year if you remount them facing north and at 37 degrees (Melbourne latitude).
This would mean about $75 additional savings per year or about $750 over the next 10 years if you manage to use all of the solar energy produced (and less if you’re sending some of your solar energy into the grid). If you can have the panels re-mounted for significantly less than that, it might be worth your time but my feeling is you’re probably better leaving them as they are.
(P.S. I’m assuming that you’re not currently receiving one of Victoria’s legacy feed-in tariffs, but realistically it shouldn’t make much of a difference with regard to my conclusions here.)
Hope this helps!
Thanks. Yep, i do get over 60cents kwh but i never actually export. Im lucky to produce 3 kwh a day. Hardly worth having solar. Thanks anyway. much appreciated
No problem, Phil. If you’re interested in having someone out to have a look at it, I know that SolarSafe specialise in post-installation servicing.
I have just moved into a house in Sunbury Victoria which has a Solax battery system but the previous owner has not left me any documentation. I live in Sunbury, VIC if you are able to provide me with any help.
Thanks
Tom Thurtell
Hi Tom,
You’d be best to contact Solax directly. You can find their contact details at the bottom of our article about Solax’s product (which you can read here).
Do you fit batteries(7kw) to 3 year old running 3kw solar system mains connected using model 5kw SOLAR RIVER 5400TL-D
Q. 1 would I need a new control unit COST $..
2 batteries 6-7 kw COST $…..
3 instillation cost if not included &…
4 is all automatic in use.
Ian…….
Hi Ian,
To get pricing through our system, please complete your details in the Quote Comparison Request form to the right of this page. All the prices you see will be inclusive of GST and installation. We do not sell products on their own or keep any stock – we’re a brokerage & comparison service working with a network of companies around Australia.
We want to move our solar electricity system to a new house as the old house is being demolished who can do this for us and what are the costs
Hi Jan,
You’d probably be best to consult a local, solar-certified electrician about doing this for you. You can find a list on the Solar Accreditation website.
Hello, I have recently moved into a property in Wodonga which has solar panels and a Growatt Invertor. This is my first experience with Solar Panels but I have noticed the red fault light is on and the watt figure is not increasing. Could you please contact me or advise who I could contact in my area. Phone 040136574. Thank you.
Hi Norma,
You can either reach out to Growatt directly (contact details at the bottom of this article) or contact SolarSafe, who have a network of electricians specialising in solar PV system after-care.
These sites have production/benefit from the Solar panels in States ect. We need more information on batteries and volumes and installation, even how to get intouch with a company that will go through the transfer to Solar/Wind/Batteries not just the information of what is happening over seas. We need to be able to install batteries to the investment we have already made. People-power can raise awareness, to get this done, tell us what the holdup is. Thank-you
Hi Dev,
There is certainly plenty of interest in battery storage for solar here in Austalia – and people are having systems installed. Solar Choice has recently launched a free and impartial battery storage comparison platform which allows our customers to instantly shop around for energy storage solutions on offer through installers in their area.
At the moment, it’s not set up for people who already have a solar system (only for people who are shopping for both solar and storage), but if you’d like us to let you know this service becomes available with preexisting solar systems, let us know and we’ll add your email address to our mailing list.
In the meantime, best of luck!
My growatt solar system have been installed by years ago.but it does not work properly,it always reconnect,what is wrong whit it?
Hi Flynn. Best to contact Growatt directly about this. You can contact their Australian offic on 02 80651298 or 0431754428. Alternatively, you may email them on ben.li@ginverter.com.