The Cost of Solar Power vs The Grid
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?
Here are the considerations for working out the cost of solar power per kWh:
- System output over the life of the system
- System price
- Ongoing costs
Solar system’s Output:
Daily 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: REC Alpha Pure panels come with a 25-year performance warranty that states that after 25 years the panels will generate at least 92% of their original output. For example, a 405W panel will be producing 373W 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 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 REC solar panels with either a good-quality 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 25 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 5-10 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 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.