Sydney is a leading city for residential solar power installations, with suburbs like Schofields seeing over 70% of homes fitted with solar panels, according to the Australian Photovoltaic Institute. If you’re considering installing solar panels in Sydney or anywhere across NSW, this article will guide you through the process. We’ll help you compare costs, find the best local installers, and show you how to make the right decisions when considering installing a solar system in your home.
Reliable Solar Energy Production in Sydney: With an average of 3.96 sun hours per day, a 6.6kW solar system can generate around 26.1 kWh daily, making solar a strong investment for homes with unshaded roofs and daytime energy use.
Cost-Effective Solar Installation: Sydney boasts some of the lowest solar installation costs in the world. A typical 6kW system averages $5,250 after the federal rebate, making solar highly affordable for local homeowners looking to cut long-term electricity expenses.
Federal STC Rebate for NSW: The Small-scale Technology Certificate (STC) rebate provides an upfront discount of around 30% for Sydney solar installations. For example, a 6.6kW system benefits from about $3,026 in rebates, further reducing upfront costs.
Attractive Payback Periods on Solar: Sydney households can expect a solar payback period of around 4-5 years, with annual savings of up to $1,214 for a 6.6kW system. Larger systems may offer even faster returns due to reduced per-watt costs.
Battery Storage: A Future-Proof Option: Though solar battery prices remain high, they offer benefits such as backup power during outages and reduced reliance on the grid. While the financial return is slower, batteries provide energy security and environmental advantages.
Maximize Savings with Solar Self-Consumption: Sydney homeowners can significantly reduce electricity bills by maximizing solar self-consumption—using solar power during the day. Any excess energy is fed back into the grid, earning you credits through feed-in tariffs, although current rates are lower than in the past.
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How much power do solar panels in Sydney generate?
With NREL’s PVWatts calculator, we can see that for each kilowatt (kW) of solar panels installed, you can generate an average of 3.96 kWh of electricity per day. This factors in a system efficiency loss of 15% which would be typical of a reasonable quality Sydney solar system.
We’ve put together the below table of common solar system sizesin Sydney to help you understand what this means. It’s helpful to remember that kilowatt-hours (kWh) are the units that appear on your electricity bill – and which your electricity retailer uses to calculate your quarterly or monthly electricity charges.
Estimated power production for solar panels in Sydney by system size
How solar panels can cut your electricity bills in Sydney
When does solar power make sense for home owners?Solar power is a great investment for virtually any home in Sydney that has a reasonably-sized, unshaded roof and some electricity consumption during daylight hours (see the sections below). This is because your home-generated solar energy can save you money in two ways:
Solar helps you reduce the amount of energy you need to purchase from your electricity retailer / the grid. This is commonly referred to as ‘solar self-consumption‘, and it is the key to making the most of your solar system in Sydney – you should do everything you can to maximise your self-consumption. In practice, self-consumption means running your appliances (pool pump, washing machine, dishwasher, etc) when the sun is shining and using NSW solar power. (Read more about shiftable loads.)
You can earn credits on your electricity bill for your system’s surplus energy. This is usually referred to as a solar feed-in tariff. Any solar energy produced that is not immediately put to use in devices in your home will automatically be sent back to the grid, earning you a feed-in credit. A few years ago, feed-in tariffs were state-sponsored and quite generous; these days the rates offered are a bit lower but still enough to help make solar an attractive investment.
The value of your solar energy is based on a combination of how much you self-consume and how much you export. If you have 6.6kW of solar panels in Sydney that produce an average of 26.1kWh/day, but you only manage to self-consume 20% of that, then your savings will be smaller than if you managed to self-consume 40% – or even, ideally, 60%.
It’s therefore important that the system you choose is appropriately sized for your home and electricity consumption. We have developed a tool to help you select a solar PV system size based on the amount of energy that you consume and your consumption pattern.
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What rebates are available for solar panels in Sydney
Federal STC Rebate in NSW
Like everyone everywhere in Australia, Sydney residents who install solar can benefit from the nation’s small-scale technology certificate (STC) rebate under the Renewable Energy Target. In simple terms, the STC rebate offers an upfront discount of approximately 30% for any solar installation under 100kW in capacity in Australia. The rebate does differ slightly depending on your location in Australia and on the current market price for the certificates it produces.
The rebate is designed to be collected by the company that installs solar system in NSW, so they in turn offer you a net price that has deducted the STC rebate. Most quotes will provide a breakdown of the total costs (before the rebate) and the net cost to you (after the rebate).
To give you an example, a typical 6.6kW solar panel system in Sydney would generate 54 STCs (using the Clean Energy Regulator’s calculator) at a current price of $36 per certificate which would result in a rebate of $1,944.
NSW Government solar battery rebate
The NSW government has introduced a program to incentive the installation of batteries with an existing or new solar panel system. The rebate typically covers between $1,600 and $2,400 and is available for solar batteries up to a maximum of 28kWh.
Thanks in part to the federal incentives explained above, Australia is home to some of the lowest solar PV system prices in the world – which is one of the reasons that so many homes and businesses have solar panels installed. Solar Choice has been keeping track of solar panel installation price trends since 2012 and as you can see in the below table the cost of solar in Sydney tracks closely to the national average.
The chart below shows how prices have changed (in terms of dollars per watt of capacity – $/W) since 2012 for a range of popular system sizes. On average solar system prices in Sydney have more than halved since we started publishing figures.
As of February 2025, a typical 6kW system in Sydney costs about $5,250 on average after the STC rebate has been deducted.
Pricing will vary depending on if any additional costs are involved like tile roof installations or tilt frames. Solar Choice’s online quote comparison tool includes a comparison of all of these extra costs which might apply to your home.
Average solar panel prices in Sydney from the Solar Choice Price Index:
3kW
4kW
5kW
6kW
7kW
10kW
Sydney, NSW
$3,740
$4,060
$4,580
$4,990
$5,820
$7,480
The Solar Choice Price Index is a trusted resource used by the Australian Government, Bloomberg NEF, and CHOICE. Our pricing data is regularly updated, providing a comprehensive look at current solar costs across Sydney and Australia.
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What is the financial return on solar for Sydney customers?
The short answer is that there is a great return on investment for Sydney homes. You have the ability to save up to $2,707 per year on your energy bill with a typical payback period between 4 and 5 years.
The table below shows payback periods and annual savings in the first year for a Sydney based solar panel system in several different scenarios. Note that we have attempted to match the system size to the energy usage, however, the right size system also depends on what time of day energy is used within a home. The self-consumption rate of 40% means that a reasonable amount of power is being used in the middle of the day.
As we’ve used average prices from the Solar Choice Price Index, the financial return could be even better for you if you can find a cheaper quote. Although be wary of quotes that are too cheap – as workmanship, sales, installation process and quality of products can drop away very quickly.
Indicative savings and payback periods for solar panel systems in Sydney – Updated February 2025 –
Solar Panel Size
Average Cost
Average Daily Energy Usage
Self Consumption Rate
Annual Savings
Payback Period
5kW
$4,820
15 kWh
40%
$914
5.1 Years
6.6kW
$5,250
20 kWh
40%
$1,214
4.2 Years
10kW
$7,800
30 kWh
40%
$1,827
4.2 Years
15kW
$11,700
45 kWh
40%
$2,537
4.5 Years
Solar Panel Savings & Payback Periods in Sydney
Assumptions/limitations of this analysis
Assumes an electricity price of 30c / kWh which is towards the middle of what is offered in Sydney
Assumes an uncapped solar feed in tariff of 5c / kWh which on the better end of what you can find in Sydney
Average costs come from the Solar Choice Price Index for February 2025
Your self-consumption rate will vary depending on how you use power in your home. A higher rate, means less power is exported to the grid and improves your financial return
The cost of solar batteries in Sydney is much higher than the cost of installing solar panels. Although the battery functionality has been well established and there are different brands in the market, the return on investment still leaves something to be desired.
At Solar Choice, we have been tracking the costs of solar batteries in the battery price index and regularly performing an assessment of the financial return of batteries. We look at 3 typical use cases for solar batteries and adjust the size of the solar and battery solution to fit. See the below payback periods and annual savings from solar and batteries in Sydney.
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
$1,233
8.3 years
> 20 years
Retirees / Young families
6.6kW of Solar Panels and a 6.5 kWh battery
$1,948
7.1 years
17.7 years
Big Energy User
13 kW of Solar Panels and a 13.5 kWh battery
$3,638
7.1 years
14.4 years
Sydney Solar & Battery Use Cases By System Size
To review our assumptions and the methodology of this analysis see our full article on whether or not home solar batteries are worth it.
As most solar batteries have a warranty for 10 years, our analysis suggests that battery storage for Sydney residents will not be able to pay for itself during its lifetime. There is still quite a way to go on the cost of batteries before this story will change. Previously we have estimated that batteries will need to cost $200-$300 per kWh of capacity to offer a good return on investment while the current price is around $1,000 to $1,100 per kWh.
This analysis does ignore some of the non-financial benefits of batteries. Crucially as Australia is experiencing higher frequencies of flooding and more severe bushfires, many households are attracted to batteries to provide back-up power in the instance of the grid outage.
There is also the benefit to the environment to assist in the reduction in Australia’s reliance of coal-fired power stations. Batteries, and many of them, will be required if we are going to eliminate fossil fuel power in Australia altogether.
Compare quotes from up to 7 pre-vetted installers in your area now.
Since 2008 our knowledge and sophisticated software has allowed over 160,000 Australian households and businesses to make a well-informed choice on their solar & battery installer.
Since 2008, Solar Choice has been a trusted resource for Sydney homeowners looking to install solar panels. We’ve helped over 1 million Australians each year compare pre-vetted local installers, ensuring they get the best quality and value for their solar systems in NSW. With a network of over 300+ trusted installers, including many right here in Sydney, Solar Choice makes it easy to find the right option for your home. As the publisher of the Solar Price Index—used by the Australian Government and trusted by Bloomberg NEF and CHOICE—we bring expertise and transparency to your solar journey.
Case Study: An example of a solar panel installation in Sydney
Balgowlah RSL engaged Solar Choice to complete a feasibility study and manage a tender process with 3 leading commercial solar installers.
On completion of the tender, Balgowlah RSL opted to proceed with a 90kW solar system which covers the majority of the unshaded roof space.
This system utilises 252 Canadian Solar panels and SolarEdge inverters with DC optimisers to improve performance of panels impacted by partial shading. The system produces around 116,000 kWh per year and will offset 2,000 tonnes of carbon emissions through the expected lifetime of the project.
According to data from the Australian Photovoltaic Institute, some suburbs in Sydney have as high as 70% of dwellings with an existing solar installation on the roof while most suburbs across Sydney are above 50%.
What direction should solar panels face in Sydney?
For solar panel Sydney customers the best way your solar panels should face to maximise the total power generation is North. However, if you use more energy in the mornings then East-facing solar panels will generate more energy earlier in the day and similarly, West-facing solar panels will generate more power in the evenings.
Solar panel installers will in most cases match the solar panel orientation to the space available on the roof whilst avoiding areas of shading and south-facing orientations which generate the least amount of power.
Is solar worth it in Sydney?
Australians are fortunate to have some of the cheapest prices across the world to install rooftop solar which is supported by the federal government’s STC rebate. In most cases, solar panel Sydney customers will be able to obtain a payback period of 4 to 5 years for the typical energy bill.
Of course everyone’s individual circumstances will vary. We have created an easy to use solar payback calculator so you can work out if solar is worth it in your case.
How many solar panels do I need in Sydney?
The most popular system size for solar in Australia is 6.6kW which requires 16-20 solar panels depending on the panel watt rating. However the appropriate or optimal size for each household will vary based on the energy bill and available roof space.
If you’re ready to consider installing solar, then you can find solar quotes and request each company prepare their recommendation of optimal solution for you through Solar Choice’s online quote comparison platform.
Jeff has consulted on over 20MW of commercial solar projects, ranging from SMEs to ASX top 100 companies. Jeff has also provided independent advice to 100s of residential solar, battery and EV charging customers across every state in Australia. He holds an MBA from the Australian Graduate School of Management and is an expert in business strategy and financial analysis.
G’Day, could you please explain for me the following : 2.5kw solar x 10 panels system + inverter conected to grid. Does that mean the total number of panels (10 ) produces 2.5kw of power or is each panel 2.5kw = 25 kw power? I don’t have a clue re this. Cheers Marian.
Best practice for a standard grid-connected solar system is to tilt the panels in accordance to the latitude of the location of the roof (e.g. 32 degrees for Sydney). For homes or businesses with heavy summertime cooling loads, the panels can be tilted at latitude minus 10 degrees (e.g. 22 degrees for Sydney). Conversely, for homes with heavy electrical loads in winter, panels can be tilted at latitude plus 10-15 degrees (e.g. 42-47 degrees for Sydney).
Hi Leonard. If you’re talking about a solar hot water system, then the answer is yes – both solar photovoltaic and solar hot water systems are eligible for the federal incentive available under the Renewable Energy Target.
What I find frustrating is the choke hold current energy produces seem to have over solar buyback systems. Surely if more homes could afford solar technology, and the power channeled back into a grid, we could begin to create a sustainable eco-friendly future.
We are so behind the rest of the world in solar and we should NOT be in this position. Professor Martin Green did so much of the early pioneering work on this innovation in the 80’s and 90’s and we have NOT utilised this value adding of the sun. In places like Israel and Jordon, most have solar powered homes and they get snow in winter!
Why can’t we get a government that pushes along this technology to improve the more than 16% unemployment rate we have in Australia?
Barbara, you are spot on. Australia is one of the sunniest countries in the world and we should be leaders with solar energy. Germany which receives nowhere near the sunshine that we have is killing us in solar production. You can blame our Liberal governments over the years starting with Howard. They are wedded to the fossil fuels and “Coal Is King” as far as they are concerned. Just look at the Turnbull as he pumps up the Adani / Carmichael mega coalmine. It is insane on every level.
There is not enough sun on my home to install solar power but I want to explore the feasability of running my pool pump only by solar. There is an area on my site which may have enough sun so I need advice.
David
Hi David. Solar-powered pool pumping should indeed be an option for you as long as you have space outside your roof to mount solar panels. Best to get in touch with one of our brokers on the topic by either emailing sales@solarchoice.net.au or filling out our Solar Quote Comparison Request form to the right of the page.
G’Day, could you please explain for me the following : 2.5kw solar x 10 panels system + inverter conected to grid. Does that mean the total number of panels (10 ) produces 2.5kw of power or is each panel 2.5kw = 25 kw power? I don’t have a clue re this. Cheers Marian.
Hi Marian,
In this scenario, each panel would be 250 watts (W). 1 kilowatt (kW) is equal to 1,000 watts, so 10x 250W solar panels would equal 2,500W or 2.5kW.
Hope this helps.
Am a Carpenter and would like to know the best roof pitch facing north that would give me optimal usage for a new system of panels.
Thanking You
TonyMc
Hi Tony,
Best practice for a standard grid-connected solar system is to tilt the panels in accordance to the latitude of the location of the roof (e.g. 32 degrees for Sydney). For homes or businesses with heavy summertime cooling loads, the panels can be tilted at latitude minus 10 degrees (e.g. 22 degrees for Sydney). Conversely, for homes with heavy electrical loads in winter, panels can be tilted at latitude plus 10-15 degrees (e.g. 42-47 degrees for Sydney).
Hope you find this useful! You may also want to check out our article on solar panel tilt & orientation.
I dont understand why so many People dont have Solar . The Sun is over there more then in Europe!
Does Solor heating for a pool get the government discount
Hi Leonard. If you’re talking about a solar hot water system, then the answer is yes – both solar photovoltaic and solar hot water systems are eligible for the federal incentive available under the Renewable Energy Target.
What I find frustrating is the choke hold current energy produces seem to have over solar buyback systems. Surely if more homes could afford solar technology, and the power channeled back into a grid, we could begin to create a sustainable eco-friendly future.
We are so behind the rest of the world in solar and we should NOT be in this position. Professor Martin Green did so much of the early pioneering work on this innovation in the 80’s and 90’s and we have NOT utilised this value adding of the sun. In places like Israel and Jordon, most have solar powered homes and they get snow in winter!
Why can’t we get a government that pushes along this technology to improve the more than 16% unemployment rate we have in Australia?
Barbara, you are spot on. Australia is one of the sunniest countries in the world and we should be leaders with solar energy. Germany which receives nowhere near the sunshine that we have is killing us in solar production. You can blame our Liberal governments over the years starting with Howard. They are wedded to the fossil fuels and “Coal Is King” as far as they are concerned. Just look at the Turnbull as he pumps up the Adani / Carmichael mega coalmine. It is insane on every level.
There is not enough sun on my home to install solar power but I want to explore the feasability of running my pool pump only by solar. There is an area on my site which may have enough sun so I need advice.
David
Hi David. Solar-powered pool pumping should indeed be an option for you as long as you have space outside your roof to mount solar panels. Best to get in touch with one of our brokers on the topic by either emailing sales@solarchoice.net.au or filling out our Solar Quote Comparison Request form to the right of the page.