New data shows that the payback period for residential solar systems – and also for battery storage – is once again shrinking as the upfront costs for installing home solar and storage steadily fall.
As the chart below shows, the moving average payback for residential rooftop solar has been trending upwards since 2020, bouncing off previous lows thanks to the global Covid-19 pandemic and then Russia’s invasion of Ukraine.
But this trend appears to be reversing now, as supply chains and production get back to normal and as module costs start to come down.
The September 2023 report from industry analysts SunWiz shows the average per-Watt price for rooftop solar panels continued to fall over August to $1.06/W – a level not seen since June last year.
For residential solar and battery storage, the average payback period has fallen below 10 years – where it has hovered since 2021 – to just over nine years.
SunWiz managing director Warwick Johnston says this trend reversal is thanks mainly to the falling cost of premium module brands, where the median price for a 6.6kW system is now at $1.32/W.
“The large drop in prices seen in the [above chart] is mainly attributable to premium panels being priced more affordably recently,” he says.
“The good news for DER companies is that system payback is certainly improving, as electricity prices rise and system prices ease.
“Battery pay-back is improving at an even quicker rate,” he adds.
Currently, SunWiz puts the median $/W post-subsidy pricing (incl. GST) at $1.00/W, but Johnston notes that, more recently, the popularity of systems priced at $0.75/W have been gaining in share.
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
