Rooftop solar installation costs fall in March, as grid power prices soar

After a couple of years of upward pressure on solar panel prices, new data has found that the average cost per watt for residential solar power systems has fallen in most Australian states over the month of March.

The data, generated by the SolarQuotes Australian Solar Price Index, has revealed that the installed cost per watt (all system sizes) dropped by 4c in Queensland, 9c in the ACT, 2c in South Australia and a marked 17c in Victoria, giving that state the nation’s cheapest solar for the month of March.

“This is the lowest cost we’ve seen in Victoria since July last year,” said SolarQuotes founder Finn Peacock.

“While the situation can change month-to-month, now could be a particularly good time to take advantage of Victoria’s solar panel rebate.”

On the cost of an average 6.6kW system, SolarQuotes says pricing in March dropped back to an average of $5,910, offering relief from a significant increase seen between December ($5,591) to January ($6,377), and then another small rise in February ($6,402).

This is great news for the rooftop solar industry in Australia, which for the last two years has been buffeted by a string of different PV panel price and supply problems, stemming from global shortages of raw materials such as polysilicon, glass and silver, and exacerbated by soaring shipping costs and market ructions in China.

As RenewEconomy has reported, this has caused manufacturing costs of solar PV modules to surge from $US0.20 per watt peak (Wp) in 2020 to between $US0.26 and $US0.28 per Wp in the second half of 2021 – the highest levels since 2017.

The March drop in installation costs is also happy news for households hoping to invest in a rooftop solar system as a buffer to rising electricity prices – again, particularly in Victoria. But the solar savings have not extend across all Australian states.

In New South Wales, for example, SolarQuotes reports that the installed cost per watt jumped 12c in March, while in Western Australia there was increase of 6c, due to due to higher average pricing for a handful of systems in the 6kW segment.

The average 6.6kW system price in New South Wales also headed north, SolarQuotes said, with not enough data for the ACT, Tasmania or the Northern Territory to make a useful comparison at this point.

Still, Peacock says that with wholesale grid electricity prices rising, it’s almost always a good time to invest in rooftop solar.

And electricity prices are, indeed, rising. According to the latest official quarterly report from the Australian Energy Market Operator, there was a 141 per cent jump in electricity prices in the March quarter (over the same period a year earlier).

As One Step Off The Grid sister site RenewEconomy reported last week, the AEMO report squarely blames coal plant outages and coal market bids for that sharp price jump.

AEMO also notes that the two states most dependent on coal – Queensland and NSW – are suffering significantly higher wholesale prices than those states further south, Victoria and South Australia, where renewables have a far greater share.

“Whether system prices are heading up or down, the best time to buy a solar power system is usually right now to avoid further locking in high household power bills,” Peacock said.

“It looks like electricity bills could also be higher for many Australians soon due to pressure on wholesale energy prices.

“The good news for solar owners is this could also mean higher feed-in tariffs – but the focus these days should still be on self-consumption to maximise value.”