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What effects the cost and payback of a solar system?

Not all solar panels, inverters and installers are the same. Differences in the purchase price of solar systems generally stem from cost differences in components. Quality components and manufacturing simply cost more. Solar equipment, like any other product follows the universal consumer principle, "You get what you pay for".  

The cost of a solar power system is dependent on a number of factors, including:

a. The quality and type of silicon cells, glass, framing, backing sheet, connectors, busbars, diodes and other components in solar panels. There are cheap options and quality options and while these differences are not visibly observable on a new, shiny panel after 5, 10, 25 years there are marked differences. 

b. Design, testing and quality assurance used in manufacturing
c. Exchange rates 
d. Inverter quality and it's cost. 
e. Installation costs. Extra costs are involved on a complicated roof, two story properties, running internal conduit & cabling (not ugly surface mounting), balance of system costs like railing, isolators and fuses come in cheap and quality options.
f. Federal and state rebates (if any) available towards the cost of the system. STC rebates are programmed to decline by 6.7% a year.

The financial returns from a solar system depend on these factors:

How long the system lasts. This is a pivotal factor. Cheaper systems for example, may pay for themselves in 4 years but fail in 8 necessitating another purchase (with lower rebates). Conversely a more expensive system may take an extra year to pay itself off, but then last another 20 years giving the household tens of thousands in net power savings.

Performance of the system. P type silicon cells are cheaper than N type but have three significant performance disadvantages. Firstly the annual degradation of P Type is double that of N type. Secondly N type have better performance at high temperatures and lastly N Type deliver more power in low light conditions. The type of silicon cell could result in a 20% difference in performance over the life of a system. The more power a system delivers the higher the financial savings.

Service & maintenance costs. Solar panels are only as good as the weakest link. One bad panel in 10 can massively reduce solar generation and stop it completely. All panels eventually fail, but ideally this starts happening after 25 years because if it happens after 5 years it is a very expensive exercise in on-going Technician costs, panel replacement and lost generation to keep the solar system operating.

Power retailer buy and sell power tariffs. In all states and territories installing a reliable solar power system will deliver positive financial returns. However, in states with both high power prices and high export feed-in-tariffs (notably South Australia) solar power is a particularly good investment.

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