Solar Choice solar PV price check - October

At the start of the month the average price of an installed solar system was $2.26/watt, with Sydney the cheapest and Melbourne the most expensive city to buy a system.

At the beginning of October 2012, the average price per watt of an installed solar system in Australia, after subtracting the federal small-scale technology certificate (STC) ‘rebate’, was around $2.26.

Price per watt by city and system size

There is a downward trend in the price per watt as the system size increases. The average price of 1.5kW and 2kW solar PV systems was $2.38 and $2.37 respectively, 3kW and 4kW systems continue to come in under $2.30 per watt, whilst the price per watt for a 5kW system decreased from last month and now averages $2.13.

Installed system prices by city and system size

Melbourne remains the most expensive city in which to buy a system, regardless of size. While Sydney continues to have the lowest system prices in the nation, October has seen challenges from Perth in terms of price-competitiveness of systems. For a 1kW system, the price in Perth even comes in just slightly cheaper than in Sydney.

System price highs and lows

System prices continue to have a wide spread, with the cheapest 5kW system being less than $2,000 more than the most expensive 1kW system.

Chinese panels continue to dominate low-to-medium-priced systems across all size ranges. German, Korean and Australian panels were the most expensive. There has been a glut of Chinese panel stock for some time, believed to be caused by Chinese government solar industry subsidisation. It has been estimated that the oversupply will not be absorbed until 2015, although the Chinese government has raised installation targets in an attempt to take up some of the slack.

European inverters – German models in particular – are spread across all system price brackets.

All system sizes can now be produced using Australian solar panels, but these come with the greatest system cost.

Average STC discounts

The average STC price offered by installers across the country at the beginning of this month was around $26. Higher values offered were generally around $30 – $32. The low for all system sizes was $23.

STCs are a type of renewable energy ‘currency’ created under the federal government’s Renewable Energy Target. When commissioned, solar systems in sunnier regions are allocated a greater number of STCs, whilst those in less sun-blessed areas (such as Victoria and Tasmania) receive fewer.

STC value varies according to supply and demand. In most cases, installers themselves assume the liability these price fluctuations and pass the value on to customers in the form of a discount off the up-front cost of a system. Depending on how much of the liability they are prepared to take on (as well as on other aspects of their pricing structure), different installers routinely offer differing nominal amounts per STC.

(N.B. Not all installers explicitly disclose the STC discount they offer, instead selling ‘packaged’ systems with the amount inclusive in the final total. The average STC discounts below are based on figures from those installers who do include this information.)

September data can be found here.

About this data

The figures in the above chart are a simple average of the prices on offer from Solar Choice network installers in each of Australia's major capital cities, and do not reflect the average prices at which systems are actually purchased.

The number of installers whose system prices have been used varies from city-to-city; the Perth average is based on figures from 15 active installers, whereas Brisbane prices are based on figures from nearly 50. All averages have been calculated based on installers' final total price after STCs; the STC price offered varies by installer.

James Martin is analyst/online development manager at Solar Choice, which works with 100 solar PV installers in providing free and impartial Solar Quote Comparisons for customers throughout Australia. Solar Choice Commercial manages tenders for a wide range of commercial-scale solar PV projects throughout Australia, including solar farms and utility-scale solar PV plants.