Is it worth getting solar panels in Melbourne?

The short answer for Melbourne in 2026

Solar is worth it when it pays back well inside its working life, and in Melbourne it usually does. Three things decide how fast:

• How much of your solar you use. A kWh you use saves your usage rate, 27.35c on the Victorian Default Offer flat tariff in the United Energy area. A kWh you export earns your retailer’s feed-in tariff, which has no minimum any more (the last one was 3.3c). That gap decides most of the answer.
• System size against your daytime use. Past the point where your solar covers what you use in the day, each extra kW mostly adds exports, so payback gets longer.
• The price after rebates. Melbourne’s market average ran from $3,980 for 3 kW to $8,920 for 10 kW in October 2026, with the federal STC rebate already taken off (market data, not our price).

On the figures below, a 6 kW system pays back in about 4.5 years for a home that uses 60% of its power in daylight and about 8.5 years for one that uses 25%. Both are well inside panel makers’ performance warranties of 25 to 30 years. The exceptions are real, though: see when solar isn’t worth it.

Payback by system size

Simple payback is your price after rebates ÷ your yearly saving. The table runs our solar calculator’s model on three households that each use 20 kWh a day and differ only in how much of it falls while the sun is up. The prices are what Melbourne homes paid on average, not our prices.

Two patterns hold for every household. Payback shortens the more of your power you use in daylight, and it lengthens as the system grows past your daytime use: for the out-all-day home, about 7 years for 3 kW against about 10 years for 10 kW. These paybacks lean short, because the model counts all daylight use as covered by solar and leaves out panel ageing and price changes. The example home also uses more than most: the Essential Services Commission treats 4,000 kWh a year (about 11 kWh a day) as typical household use, and a smaller user waits longer for its payback.

Work out your own payback

Solar panel cost in Melbourne

Paying for solar with a loan

Solar as an investment: the yearly return on the price

Read the payback table the other way round and you get a yearly return on the money: the saving each year ÷ the price. On the example home, a 6 kW system at the Melbourne market average of $5,810 saves about $970 a year, a simple return of about 17% a year (Solar Choice Price Index, October 2026; market data, not our price). Across the sizes the index lists, the same home’s return runs from about 13% for 10 kW to 21% for 3 kW, because past its daytime use a bigger system mostly adds exports.

Treat that as a first-year figure, not a forecast. It holds today’s Victorian Default Offer rates and a 3c feed-in tariff flat, it leaves out panel ageing (below), and unlike money in the bank it comes back only as lower bills while you own the home. Solar Victoria also says inverters are not generally expected to last much more than 10 or 15 years, and that you can expect to replace yours at least once over the life of the system, which takes some of the return back.

What the system saves over 25 years

Hold the same example at 2026 prices and tariffs and let the panels age. Their makers’ performance warranties set a floor: of the panels in our panel guide, the steepest guarantee (Canadian Solar TOPHiKu6, 1% in the first year, then 0.4% a year) still promises 89% of the rated power in year 25, and the gentlest (REC Alpha Pure-RX, 2% in the first year, then 0.25% a year) 92%.

On those two curves the 6 kW system saves about $23,800 to $23,900 over 25 years on the example home (about $24,200 if they never aged), against its $5,810 price. The saving barely falls as the panels age, because what they lose first is mostly export at 3c, not the daytime use they cover. That total is before the replacement inverter Solar Victoria says to expect, and it is an illustration at constant prices, not a forecast: the Victorian Default Offer resets every 1 July.

Slower degradation over 25 years

How much can solar save you?

Solar saves money in two ways, and in Victoria they are far apart. Each kWh you use at home is a kWh you don’t buy: the Victorian Default Offer for 1 July 2026 to 30 June 2027 charges 25.96c to 31.98c per kWh on a flat tariff, depending on your network. Each kWh you export earns your retailer’s feed-in tariff instead. At 27.35c and a 3c feed-in tariff, a kWh you use is worth about 9 times a kWh you export. Many market offers are cheaper than the Victorian Default Offer, so check your own bill.

On the example home, a 6 kW system saves about $970 a year: $800 from the 2,920 kWh used as it is made, and $170 from the 5,590 kWh exported. That takes about 48% off the usage part of the bill ($2,000 a year before solar). The daily supply charge stays, about $430 a year on the Victorian Default Offer in the United Energy area.

The model says this home uses 34% of its solar. Real homes often use less: Solar Victoria says most households with solar panels only use around 25% of the energy they generate. Every point you add to that share is worth your full usage rate.

Export or store your solar?

Not home during the day?

Solar still pays when the house is empty in the day, just more slowly, because more of it is exported. The fix is to move use into the daylight hours rather than to buy a bigger system. On the example home, a 6 kW system saves $700 a year with 25% of the power used in daylight. Moving 3 kWh a day into the day lifts that to $970, about $270 more a year.

• Timers and delay start: set the dishwasher, washing machine and dryer to run in the middle of the day.
• Weekends and work-from-home days: save the big loads for days someone is home and the sun is out.
• Watch the app: solar monitoring shows when your panels make the most, so you can time loads to it.

The free midday hours

Since 1 October 2026, retailers with 1,000 or more household customers must offer the Midday Power Saver: grid power with no usage charge from 11 am to 2 pm, up to 24 kWh a day, for households with a smart meter. Its maximum rates outside those hours are 2.05c to 2.18c per kWh above the Victorian Default Offer’s time-of-use rates. On that plan, power you use from 11 am to 2 pm is already free, so solar used in those three hours saves nothing extra; your solar earns its keep in the morning, the afternoon and on exports. Whether the plan suits a solar home depends on how much you use outside the free hours.

How the free hours work

Export limits and low feed-in tariffs

Victoria has had no minimum feed-in tariff since 1 July 2025. Retailers set their own, and it can’t be below 0c. The last minimum flat rate, for 2024–25, was 3.3c per kWh; the 0.04c set for 2025–26 never applied. The lower the feed-in tariff, the more a system sized beyond your daytime use costs you in payback:

Even with nothing paid for exports, the 6 kW system pays back in about 7.5 years; the 10 kW system stretches to about 11 years.

Export limits work the same way. Networks also cap how much a home can send to the grid: AusNet Services and Jemena allow up to 5 kW of export per phase on a basic connection, and CitiPower, United Energy and Powercor plan to lower the fixed limit to 1.5 kW per phase during 2026–31, with flexible exports instead. On a low feed-in tariff a limit costs little: all of the example home’s exports from a 6 kW system are worth $170 a year at 3c.

Export limits by network

When solar isn’t worth it: five reasons

Solar is a weaker buy, or one to delay, when one of these applies:

1. Most of your use after dark. A home on the Essential Services Commission’s typical 4,000 kWh a year (about 11 kWh a day), a quarter of it in daylight, saves only about $370 a year with a 3 kW system at $3,980 (market data, not our price): a payback of about 10.5 years. Use less, or less of it in daylight, and it stretches further.
2. You will sell before it pays back. If you expect to move within the payback period, you rely on the sale price to recover the cost, and the evidence on that is thin. See solar and your home’s value.
3. Heavy shade. The figures on this page assume no shade. Facing east or west costs about 13–14% of a year’s output against north (PVGIS), which is manageable; heavy shade from trees or a neighbour’s second storey can cost far more, and a site check shows it.
4. The roof needs work first. Panels have to come off for a re-roof, which adds cost later. Fix the roof before the panels go on.
5. A system sized for exports, not your use. On the out-all-day home a 10 kW system pays back in about 10 years against about 7 years for 3 kW. Size for what you will use, or plan the battery that will use the rest.

The pros and cons of solar

Does solar add value to your home?

Probably a little, but there is no Melbourne figure. One peer-reviewed Australian study, by economists at Macquarie University, the Australian National University and the University of Wollongong, was published in the Australian Journal of Agricultural and Resource Economics in 2021. Its working paper found that solar systems over 3.5 kW were associated with a housing price premium of around 4%.

Read that figure with care. It comes from the ABS Survey of Income and Housing for 2015–16 and 2017–18, and the “price” is owners’ own estimates of what their home would sell for, not recorded sales. It covers all of Australia, and it predates the end of Victoria’s minimum feed-in tariff. The study also notes that home solar systems are usually left on the roof and pass to the new owner. If you sell, a buyer gets the lower bills; your bills and the system’s paperwork are the best way to show them.

Solar or solar plus a battery?

A battery stores the solar you would have exported and runs the house with it after dark. Solar Victoria says homes with solar only use around 25% of what they generate, and homes with a battery around 50 to 60%. In the calculator’s model, a 10 kWh battery on the example home’s 6 kW system lifts the share it uses from 34% to 73% and adds about $800 a year, before charging and discharging losses.

The battery has its own price and its own federal rebate, so it is a separate sum: its price after the rebate ÷ the extra saving. Across Australia a 10 kWh battery averaged $7,784 installed after the rebate on a system that is already battery-ready, or $8,284 with its own inverter to add it to existing solar (Solar Choice Battery Price Index, August 2026; market data, not our price). If a battery is likely later, ask for a quote with a battery-ready (hybrid) inverter as well and compare the two.

Are solar batteries worth it?

Battery cost in Melbourne

Is solar worth it: your questions