How to estimate solar panel payback
A kilowatt-hour you use yourself is worth several times one you export.
Feed-in tariffs in Australia are now often only a few cents per kWh, while grid electricity costs many times more. So solar pays back fastest in homes that use power during daylight: running the dishwasher, pool pump, hot water or EV charging in the middle of the day.
The calculation
System kW × average peak sun hours × 365 × system efficiency (about 75–85%).
Most homes without a battery use somewhere around 30–50% of their solar directly. Your installer or smart meter data can refine this.
Self-used kWh × your electricity price, plus exported kWh × your feed-in tariff.
Net system cost ÷ yearly benefit.
Worked example: 6.6 kW system
Raising self-use from 40% to 60% (by shifting loads to the daytime) lifts the benefit to about $1,716 and brings payback down to about 3.8 years, with no extra hardware.
| Item | Calculation | Result |
|---|---|---|
| Generation | 6.6 × 4.2 × 365 × 0.8 | ≈ 8,094 kWh |
| Self-use value | 8,094 × 40% × $0.32 | ≈ $1,036 |
| Export value | 8,094 × 60% × $0.05 | ≈ $243 |
| Yearly benefit | ≈ $1,279 | |
| Payback on $6,500 | 6,500 ÷ 1,279 | ≈ 5.1 years |
✨ Key Takeaways
- Generation = kW × sun hours × 365 × efficiency.
- Self-consumed solar is worth far more than exported solar.
- Shifting usage to the daytime is the cheapest upgrade.
Open the solar payback calculator →