Is a cheap solar system really worth it? Your guide on what you need to spend
It’s no secret that sales are effective. Every business owner knows the power of a Summer Sale, Black Friday or ‘Free gift with purchase’ promotions.
And who could blame us as consumers? We all want the best return for our hard earned dollar and bagging a bargain does feel good. But when it comes to a long term investment like solar for your home, is a cheap solar system worth it? Does a budget ‘one price fits all’ approach really work?
In this article, we’ll dig into how the cost of a solar system is calculated, whether those under $10K solar systems are worth it and how much you really need to spend to get the results you seek. We’ll also point out a few things to watch out for and give our advice on getting the right size system for your home, needs and budget.
How the cost of solar is calculated
kW output
More often than not, you’ll see solar systems priced based on kW size. This is the system’s total panel capacity, expressed in kiloWatts (kW).
If you’re new around here, a Watt is a basic measure of electrical power, and the kilo means there are 1000 of them. i.e. 1 kW = 1000 Watts
For example – a system made up of 16 x 415W solar panels = a 6.6 kW system.
This represents the panel’s peak output under standard test conditions (and NZ’s climate is often very closely matched to these conditions). So, how much power the panel would produce at say, midday when the sun is at its strongest.
You can read more about the size of solar systems here.
Number of panels
Occasionally, you’ll see solar systems advertised based on the number of panels. For example, $9,995 for a 10 panel system.
If this is the case, you need to check the kW output of the system too. Why? Because the output of the panels making up that system can vary depending on the brand. If you want to compare apples with apples, it’s always best to look at the kW output.
Something to watch out for – inverter kW output
The capacity of your inverter also determines the maximum output of your system – and is also measured in kW. Which can be used to create confusion.
Always check that it is the solar PV peak watts you are being quoted on, not the inverter size. We’ve seen a 10 kW system advertised, referring to a 10 kW inverter with just 8 kW of solar panels!
This raises the point that obviously, there’s more to a solar system than just the solar panels. Each component in the system has a price tag attached and like anything, that price is determined by the quality, performance and reputation of the component and its manufacturer.
Bespoke design and pricing
With bespoke design and pricing, you can expect an in person survey of your property (or an assessment of your plans for new builds) followed by a design tailored to your home and your reasons for going solar.
You should then receive a detailed quote which breaks down the specifications, the cost of each component and installation and can include options at different price points if that’s useful to you. It can seem like a lot of information, but a good installer should talk you through it.
How we calculate the price of solar
Bespoke design and pricing is always our preferred way of calculating the cost of a solar system. Why? Because:
- tailoring the design to suit your unique requirements is the best way to get a high performing system suited to your budget,
- transparency around the price of each component allows you to make an informed decision,
- modeling its expected performance at your location means you’ll understand what you can expect from your solar system before you make the investment.
There are a bunch of costs associated with installation that are fixed whether you install 10 panels or 30. When you receive a detailed quote, you’ll see straight away that there are economies of scale when installing a bigger system with more panels – and if we’re being really cynical, an incentive for some to encourage you to start with a smaller system. Understanding this from the start will help you make the right decision for you.
Is a $10K system worth it?
Now you understand a bit more about how the price of solar is calculated. What do you need to spend to get a good experience?
Let’s look at the commonly advertised solar system price of $9,995. For this price, you will get a solar system with a peak PV output of around 2-4kW. You won’t ever get a battery included for this price, contrary to what some slightly misleading advertising would have you believe.
A system with that peak output will typically produce around 20 kWh (kiloWatt hours) over the course of an average summer’s day. Winter’s reduced sunlight strength and shorter daylight hours mean you’ll generate around 10 kWh per day.
While every home and family’s usage is different, we expect a typical 3 bedroom Kiwi home with all electric appliances to use around 20-30 kW hours per day in the summer and around 40-60 kWh in the winter.
Straight away you can see that a 2-4 kW system won’t quite cut it. You’ll fare OK in the summer months, especially if your lifestyle allows you to use much of your power when your solar is cranking i.e running your appliances in the day when the sun is shining.
But as you enter the depths of winter, you’ll find yourself importing more from the grid and this will start to eat into your summer savings. You’ll certainly reduce your bills a bit, but your overall experience with solar won’t be as good as the dream you’ve been sold.
But by upping the size of your system – or even better, modelling the size you need in line with your usage habits, unique needs and reasons for going solar – you’re much more likely to have the experience you’ve heard others raving about.
Future proofing for battery storage
If you want to protect your home from power outages and use your solar to power your home through the night, you’ll need to install a home battery like the Tesla Powerwall 2.
As you can imagine, charging a home battery requires additional solar generation. After powering your home, a 2-4 kW solar panel system won’t leave enough excess power to charge your battery.
For the budget conscious, we often recommend a staged approach. Installing the solar panel system first and allowing for a battery to be added later. But the fixed costs of installation means it always makes sense to size your solar panel system for that future battery right away, rather than adding panels later.
By 2030, most New Zealand homes will also have more electric appliances and electric cars to power. So in the long term, you’ll thank yourself for investing in the largest solar system you can afford – or fit on your roof!
So, what size solar system do you need?
As we’ve said time and time again, we believe there’s no ‘one size fits all price’ for solar. But to give you a guide to what you’ll need to spend, the typical size solar system we install in New Zealand is around 6-8 kW. With an approximate cost of $15-20,000.
However…
To ensure the best return on your investment, the design of your solar system should always be tailored to your home and your unique lifestyle. If you’re being sold the same system as Sally down the road, you’re not getting the right system for you.
Our advice
While we regularly have people coming back to us saying they wish they’d installed more solar panels at the time, we’ve never once had anyone say their system is too big. Solar is an investment in your future so we always recommend filling your roof if you can!
Our advice is to take advantage of the experts available to you. Read more on our Knowledge Hub, learn from the experience of real people with solar and when you’re ready, schedule your free, no obligation site survey, design and quote with us.