How Much Does Solar Power Cost per kWh vs the Grid in Sydney?
With electricity prices continuing to rise, many Sydney households are turning to solar power as a way to cut costs. But how much cheaper is solar energy compared to buying power from the grid? By looking at system costs, efficiency, and long-term savings, it becomes clear why so many homeowners are making the switch. Let’s break down the numbers and see why solar is a smart financial investment.
Key Takeaways:
Solar Power is Significantly Cheaper Than the Grid – With system costs as low as 3.6 cents per kWh over 25 years, solar power is much more affordable than grid electricity, which costs 25 to 38 cents per kWh (or up to 52 cents during peak hours).
Long-Term Savings and Performance – High-quality solar panels, such as REC Alpha Pure, come with a 25-year performance warranty and maintain at least 92% of their original output, ensuring reliable energy production for decades.
System Choice Impacts Efficiency and Cost – While string inverter systems are slightly cheaper upfront, Enphase microinverter systems often produce 110% of expected output, making them just as cost-effective per kWh over their lifetime.
Maximizing Solar Savings – Households benefit the most by using solar power directly rather than exporting it to the grid, as feed-in tariffs range from 5-10 cents per kWh. Choosing a good energy retailer can further optimize returns on excess power.
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
A 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 Systems 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.
As a ballpark figure, a 10kW system starts from $12,000.
If we expect the system to produce 337,770 kWh over 25 years, we have a cost of 3.6 cents per kWh!
Compare this to your power bill to see 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.
Why Solar Power has Become So Popular:
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.
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