With electricity prices continuing to climb and solar panel prices lower than ever, 2026 is shaping up to be another excellent year for going solar in Australia. But is it worth it for your situation? Let's cut through the marketing hype and look at the real numbers — including the scenarios where solar might not make sense.
Current Solar Panel Prices in 2026
Solar system prices have stabilised after years of decline. Here's what you can expect to pay in 2026 for a quality system from a reputable installer (after STC rebates) — for a deeper breakdown, see our full guide to solar panel costs in Australia for 2026:
| System Size | Price Range (after STCs) | Cost per kW |
|---|---|---|
| 5kW | $4,500–$6,500 | $900–$1,300 |
| 6.6kW | $5,500–$8,000 | $830–$1,210 |
| 10kW | $8,000–$12,000 | $800–$1,200 |
| 13kW | $10,500–$15,000 | $810–$1,150 |
Current Electricity Prices by State
Higher electricity prices mean bigger savings from solar. Here's where each state sits in 2026:
| State | Avg Residential Rate (c/kWh) | Daily Supply Charge |
|---|---|---|
| South Australia | 35–42c | $1.00–$1.30 |
| New South Wales | 30–35c | $0.90–$1.20 |
| Victoria | 28–33c | $1.00–$1.30 |
| Queensland | 28–32c | $0.90–$1.10 |
| Western Australia | 29–32c | $1.05–$1.10 |
| Tasmania | 26–30c | $0.85–$1.00 |
| ACT | 25–29c | $0.80–$0.95 |
| Northern Territory | 27–30c | $0.65–$0.80 |
The 25-Year Financial Analysis
Solar panels come with 25-year performance warranties, and most will continue producing well beyond that. Let's model the full financial picture for a typical 6.6kW system in Sydney:
| Metric | Value |
|---|---|
| System cost (after STCs) | $6,500 |
| Annual savings (Year 1) | $1,600 |
| Payback period | ~4 years |
| Savings over 10 years | ~$18,000 |
| Savings over 25 years | ~$52,000 |
| Return on investment (25yr) | ~700% |
| Equivalent annual return | ~15% |
This assumes 3% annual electricity price increases and 0.5% annual panel degradation. Even in a conservative scenario with no electricity price increases, the 25-year savings exceed $35,000 — still a remarkable return on a $6,500 investment.
The STC Rebate Is Shrinking
Australia's Small-scale Technology Certificate (STC) scheme reduces the upfront cost of solar by $2,500–$3,500 for a typical 6.6kW system. However, this rebate decreases each year as the scheme phases down, with full phase-out expected by 2031. Every year you wait, the upfront cost effectively increases by several hundred dollars.
When Solar Is NOT Worth It
While solar makes financial sense for the vast majority of Australian homeowners, there are genuine situations where it may not be the right choice:
Heavy Shading
If your roof receives significant shading from tall trees, neighbouring buildings, or other obstructions for most of the day, solar output will be dramatically reduced. Partial shading can cut output by 20–50%, and heavy shading makes the investment unviable. Roof orientation matters too — our comparison of west-facing versus north-facing solar panels explains how aspect affects output and bill savings. Get a proper shading analysis before committing.
Planning to Move Soon
If you're likely to sell your home within 2–3 years, you may not recoup the full investment. That said, solar does add value to a property — studies suggest solar adds $15,000–$20,000 to the sale price of Australian homes. Whether this fully offsets your costs depends on your specific situation.
Very Low Energy Usage
If your quarterly electricity bills are under $150, your total energy usage may be too low for solar to make financial sense. The fixed costs of the system simply take longer to recoup when the savings per quarter are small.
Roof Needs Replacing
If your roof will need replacing in the next few years, it's smarter to do the roof first. Removing and reinstalling solar panels for a roof replacement typically costs $1,500–$3,000, eating into your savings.
Renting
As a tenant, you generally can't install solar panels. However, you can ask your landlord to consider it (they get the property value increase) or look into community solar programs.
What About Waiting for Better Technology?
This is a common question, and the answer is clear: don't wait. Solar panel efficiency improvements are incremental (1–2% per year), and prices have largely plateaued. Every year you delay, you miss out on $1,500+ in savings and face a smaller STC rebate. The best time to install solar was five years ago; the second-best time is now.
Calculate Your ROI
Every home is unique, and generic averages only tell part of the story. Use our Solar ROI Calculator to model your specific situation. Enter your location, electricity rate, system size, and usage pattern to see your exact payback period and 25-year savings. The numbers might surprise you.