Is Solar Power Worth it to Help You Save Money in 2025?
The consistent increase in power prices and generally high cost of living expenses have left many Australian homes looking for a way to reduce the amount they pay for necessities such as electricity.
Solar is an interesting concept, while of course one of it's main attractions is long-term savings and energy price security, it does still require a significant initial investment for installation and set up. It's important to understand the energy needs of your home to ensure you're installing the right size system and components to achieve your goals.
Key Takeaways:
Solar is a Smart Investment (If Done Right!) – With electricity prices climbing, solar panels are an excellent way to save money long-term. A well-sized solar system can cut thousands off your annual power bills, and with prices at an all-time low, many Aussie households are jumping on board. Just be sure to choose the right system for your needs!
Payback Period Matters – The best-case scenario for solar payback is around 3–4 years, but it depends on the system quality and your power usage. Cheaper, low-quality panels might offer a quick return but could be unreliable, while premium systems last longer and provide better long-term savings.
Batteries Can Supercharge Your Savings – Installing a solar battery allows you to store extra energy and use it at night, further reducing your reliance on the grid. This makes solar an even more attractive option, especially for households with high power usage.
Beware of Cheap Solar Deals – Not all solar systems are created equal! While budget options may seem tempting, they often come with risks like poor performance, unreliable warranties, and dodgy installers. It’s worth investing in a reputable brand and installer to ensure you get the best long-term value.
How Does Solar Power Reduce Your Power Bill?
Things have changed. Energy prices are going up and it looks like they will keep going up for a time to come.
Is solar power worth it?
Not only is solar worth it… it becomes a no-brainer for most households. Here’s why:
A solar power system can generate solar energy at around 5-6 cents per kWh.
Compare that to your current bill, and it’s pretty obvious why over 3 million homes now have solar panels installed on their roof.
The price of solar panels is at a record low, with an average-sized 10kW solar system with good quality solar panels now costing as little as $12,000 fully installed. That size solar system generates about 40 kWh a day of solar energy averaged out across the year.
If we assume you are paying 30c per kWh, you can expect to save up to and even over $4,000 from solar energy every year on your power bills with a 10kW solar system if you use all of the solar energy as it is generated
Solar Energy Savings: Are Solar Panels Worth It in Australia?
With electricity prices continuing to skyrocket across Australia, households are rushing to install solar power to save money on their power bills. Especially now that solar panel prices in Australia are at an all-time record low.
The price of good quality solar panels is now very affordable. So, it is possible to save thousands of dollars a year on your power bills and get a return on your money from a residential solar system in 3 to 5 years. Let’s break these numbers down to help you figure out how much you need to pay for a solar power system that will save you money. That will help determine if solar power is right for your household.
If you also install a solar battery, you can come close to replacing your entire power consumption with solar power. In which case we would normally size up your solar system based on your average daily power usage (24 hours) rather than on the amount of power you are using during the daytime.
Typically, the smallest solar system we install in Sydney is a 5kW system, which will generate around 20kWh of solar energy a day, and in terms of saving money, it can knock off around $500 per quarterly power bill if you use all of the solar power as it is generated.
Therefore, we generally recommend you have a quarterly power bill of at least $400-$500 to be able to save a decent amount of money.
As explained above, if you plan on installing battery storage, rather than needing to use at least 32 kWh during the daytime for an 8kW system, you only need to have a daily (24 hours) usage of 32 kWh a day. Solar batteries allow you to store the excess solar power for use in the evening as needed.
If your power bill is more than $500 a quarter, a solar power system will almost certainly be of great benefit, and as a general rule the larger your power bill, the more money you can save, and hence the more a solar power system will be worth it.
Power Cost per kWh with Solar
Read your power bill to see how much you pay for your power (plus add GST). For every kWh of solar power you use in the home during the day, this is what you will save. With a solar system in Sydney, it is typical to pay around 25 to 35 cents a kWh if you pay a flat rate, and up to over 50 cents a kWh during the peak billing period if you are on time-of-use billing as shown here:
Compare this to the Cost of Solar Energy
Solar power only costs around 5 to 6 cents a kWh to produce, making it a no-brainer to run as much of your home as possible off solar power. So yes, solar power is worth it!
Solar power is fed into the home to be used as it is generated, so by using solar power, you are not buying power from the grid.
If you don’t use the solar energy as it is generated it is fed off to the grid and you will get paid a small amount for this from your energy retailer. Typically you will get around $10-$30 a quarter as a credit on your bill, and the smaller the credit the better as this means you are using most of your solar power as it is generated. For more information on this please read how solar power reduces your power bill.
To work out how much power you use during the day, simply read your meter (in your meter board) in the morning and then again at night. Subtract one number from the other and it will tell you exactly how much power you have used during the hours (when your solar system will be generating electricity).
With solar battery storage now available, it is also possible to further reduce your power bill and run your house almost entirely off solar power. Solar batteries store power that would otherwise be sent to the grid to be used in the evening. Click here for more information about solar battery storage.
Solar Panel Brands ARE Important
This also helps you choose what solar panel brands to go for. If you know an 8kW system is going to save you up to around $3,400 a year on your bills, you can then decide whether you want mid-range solar panels for a 3-year return on your money or a top-of-the-range system with 1KOMMA5° solar panels that may give you a 5-year return.
Because top-of-the-range solar panels come with a 25-year product warranty and on average last 7 years longer than cheaper Chinese-made brands, people will often justify a larger outlay for an increase in reliability, performance and longevity from their solar panels. This will depend on how long you intend to stay in your house and how much you want to spend on a solar system.
Solar Payback Period
One of the most important points to consider is how quickly you want the system to pay for itself. Typically the best-case scenario is a return on your money in 3 to 4 years. A return on your money in less than 3 years typically requires buying very cheap components (and no-name solar panels) that are likely to be less reliable.
An payback period of longer than 5 years typically means the system is oversize. As mentioned above, oversizing your system is often a very good idea, especially if you plan to add battery storage Over the long term, it will help you save the most money.
If youre comfortable with a longer return on your money, the two main options are to go for better brands or a bigger system. We can help you with this, and of course, it is entirely up to you which way you go. However, the one tip we do like to emphasise is that with solar panels you absolutely get what you pay for, which is an increase in quality, longevity and system performance.
How Much are You Willing to Pay for a Solar System?
If you only want to pay $4000 for a solar system, it might not be worth it.
The cheaper end of the solar industry is plagued with issues. From
under-performing solar panels,
to no-name manufacturers in China going out of business (along with your warranty),
unprofessional solar installers who don’t respond to service requests, misleading marketing, fake testimonials…
and so on.
It can be a nightmare and we know all about it from the dozens of calls we get every week from households that have been ripped off by other solar installers and who are looking for help.
It is also quite easy to strip $500 out of an install, which is something no reputable solar installer would do, however, we know it happens with these cheap solar systems offered by certain installers. You can’t get a $6000 5kW system ‘on sale’ for $4000, in fact, there are significant differences between the different price points in the solar industry that should be understood before signing up for an installation.
So is Solar Power Worth It?
The message is simple – if you have the budget for a good quality system from a reputable solar installer, solar power is absolutely worth it. When sized up properly, it is possible to get a return on your money in as little as 3 to 5 years and have a problem-free investment that will generate clean energy for decades – over 25 years with the better solar panel brands such as 1KOMMA5°, REC, and Trina.
A 5kW solar system can save you up to around $50,000 on your power bills over the life of the system, money that is taken directly from the books of the coal industry.
If you're considering switching to solar and want a deeper dive into the process, explore everything you need to know before investing in solar for your home. You can find topics like how to optimise winter production of your solar panels and its effect on the value of your house.
Batteries Make a Difference...
Furthermore, solar battery storage is now available, enabling households to run their home almost entirely off solar power. Solar Power & Storage systems are quickly becoming the norm, as households look to increase their energy independence and maximise the consumption of solar power in the home.
1KOMMA5° offers extremely competitive pricing on all of the top brand names; from the best Chinese manufacturers right up to the best high-efficiency modules on the market from companies like Trina Solar.
Millions of Australian households now have solar power because the numbers simply make sense. When sized up properly solar power costs as little as 5 cents a kWh. Compare that to what you are currently paying and it quickly becomes apparent that solar panels are worth the money for most Australian households.
While a basic solar power system can significantly reduce your power bills, there's something you can do to optimise your savings and self-consumption. This is where solar batteries come in!
We speed up your research with our detailed guide on solar batteries to help you decide what battery storage works for your solar system. Or you can consult our solar experts to start with solar batteries.
Frequently Asked Questions about Installing Solar Power
How much does it cost to off-grid with solar power?
Taking your home off-grid with a solar system can cost 2-4 times more than installing a standard grid tied solar system. The jump in price is due to the need for additional solar panels, large battery banks, a backup generator and a specialised off-grid inverter in order to handle the fluctuating energy demands associated with stand alone systems. The starting cost is usually around $40,000, this does not include ongoing maintenance costs and fuelling the generator.
What are the main maintenance challenges for off-grid systems?
Off-grid solar systems require far more regular maintenance that your standard grid tied or hybrid solar systems due to their larger size, added components and greater complexity of their setup. This includes servicing the batteries, checking inverter health and ensuring your backup generator runs efficiently. The stakes are also higher with an off-grid system, failure to perform these regular checks and servicing could leave you without power.
What happens if my off-grid solar system runs out of power?
If you choose to take your home off the grid there will come a point where you will run out of solar power. Whether this be because of weather conditions or higher than usual household energy demand. This is why a backup generator is an integral part of an off-grid solar system. This generator is usually powered by petrol or deisel and will provide power to the home until solar production is back up again.
Is it better to go off-grid or use a hybrid solar system?
For the vats majority of people it is better to install a hybrid system, they offer the benefits of solar power generation and energy independence using storage solutions whilst still having the grid to fall back on. While it's awesome to generate, store and use your own energy around the clock, remaining grid tied allows you to export excess solar energy back to the grid for a feed in tariff when production is high and draw from the grid to power your home when production is low. Installing an off-grid system is only really feasible if you live in a remote area with limited grid access or the grid connection fee is extremely expensive (more expensive than the price of an off-grid system).
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