5 kW Solar Systems: Prices and Information
A 5 kW solar power system is a size that should easily offset a typical Australian home’s electricity usage.
However, most Australians installing solar these days tend to install systems larger than 5 kW as this provides better bang for buck – 6.6kW systems are now considered entry level, and 10kW of solar is preferable if you can fit it on (even more if you’re considering an electric vehicle).
5 kW solar systems are also the minimum system size you should be considering if you’re looking to add batteries to your system in the future – again, most who intend to install batteries opt for larger systems.
Here’s what you need to know about 5 kW systems, including price information.
How Much Does a 5 kW Solar System Cost?
Expect to pay about $4,500 – $8,000 out-of-pocket costs for a good-quality 5 kW system, depending on the components selected and the installer’s approach to installation. The graph below shows what 325 Australians have reported paying for their 5 kW systems in the past two years.
How Many Solar Panels Will You Need for 5 kW?
To make up a 5 kW solar system, you need 12 solar panels, assuming you use 415W panels – that will actually give you 4.98kW.
Each panel will be about 1.8 metres x 1.1 metre, so you’ll need at least 24m² of roof space.
To give you a feel for how big 24m² is, this picture may help:
How much electricity will a 5 kW solar system generate?
A 5 kW solar system will generate approximately 20kWh per day, depending on your location and a variety of other factors. The average home in Australia uses about 16kWh per day.
Note that this does not mean installing a 5 kW solar power system will automatically give you a $0 electricity bill, as most households use the majority of their electricity at night when the sun isn’t shining – I talk about this in greater detail here.
How much money will a 5 kW solar system save?
You may be thinking: “If the 5 kW system offsets my energy usage, then surely it’s going to wipe out my electricity bill?”
Unfortunately it is not that simple! The amount the electricity companies will pay you for your solar energy (what’s known as a feed-in tariff) is, way lower than the price they charge you to buy the same electricity from the grid! Plus, there’s other costs on a bill such as supply charges, aka service charges. However, a 5 kW solar power system is still an excellent investment.
Let’s say you get paid about 8c per kWh for exported energy (some retailers offer more, some less) compared to 30c per kWh to buy electricity from the grid. Here’s 3 scenarios to show how the 5 kW system payback works:
1) Use all the solar electricity produced by the 5 kW systems in your home. This is unlikely unless you have unusually high daytime electricity consumption — for example, you operate a small business from your home.
If that were your situation, you would save approximately $2,200 in the first year, and around $44,000 over 20 years. Those are some serious savings.
2) Export half the electricity: You would save about $1,400 in the first year.
3) Export all the electricity: You would save about $580 in the first year with a 5 kW system.
If you think that this sounds very counterintuitive, then you can read about the relationship between exports and payback here.
You can see the numbers for yourself and change all the assumptions to see how they affect payback with my solar payback calculator.
How long before a 5 kW solar power system pays for itself?
If you are not exporting all of the energy and assuming you’ve paid a reasonable price for a 5 kW solar system, then you should see a payback period of less than 5 years – so a fairly rapid payback timeframe.
But you can actually be cash flow positive from day one if you get cheap solar finance. It is very easy to finance the purchase so that your monthly energy savings are worth more than the cost of paying back the loan. Again, my solar calculators show you quite clearly whether the investment is cash flow positive or negative; i.e. if it is cost-effective.
It can be a laborious process to find a trustworthy solar installer to provide you with a good-quality 5 kW solar power system at a reasonable price. This is why I’ve done the hard work for you, and curated a list PV installers that I trust to do the job properly. If you want 3 competitive quotes for pricing on a 5 kW solar system, from local specialists (including payback calculations), you can get them here.