A decade ago, solar was an export business: generous feed-in tariffs paid you handsomely for every kilowatt-hour you pushed to the grid. That era is over. Feed-in tariffs across the states now sit at 3–7 cents per kWh — Western Australia pays 3c, Victoria 4c, Tasmania tops the table at 7c — while the grid power you avoid buying is worth 21–35 cents. Every kilowatt-hour you use yourself is worth four to six times one you export.
This inversion changes how you should size, orient and use a system. The economics still work — often spectacularly — but only if you think in terms of self-consumption.
The payback maths, worked through
Take the standard 6.6 kW system in NSW, at an installed cost of roughly $6,000 after the federal STC rebate.
Generation: 6.6 kW × 4.5 average sun-hours × 365 days ≈ 10,800 kWh a year.
The split is everything. Suppose the household self-consumes 40% and exports 60%:
- Self-consumed: 4,320 kWh × 28.5c (avoided grid price) = $1,231
- Exported: 6,480 kWh × 5c (feed-in) = $324
- Total first-year benefit: ~$1,555 → payback ≈ 4 years
Now the same system with only 20% self-consumption (a household empty all day, everything exported): $616 + $432 = ~$1,050 — payback stretches toward 6 years. And an aggressive self-consumer at 60% reaches ~$2,000 a year and a 3-year payback. Same roof, same panels — the behaviour is worth more than a thousand dollars a year.
Sunnier states compress everything: Queensland and WA average 5.0 sun-hours, so the same system generates ~12,000 kWh. Our solar ROI calculator runs these numbers for your state, tariff and usage pattern.
After payback, the system produces $1,500–$2,000 of value annually for the remaining 15–20 years of panel life. There are very few five-figure purchases with that return profile, which is why solar remains worth doing even with feed-in tariffs near zero.
Why "oversizing" still pays
Intuition says a smaller system wastes less export. The arithmetic says otherwise: panels are now the cheap part of an installation (the fixed costs — inverter, labour, scaffolding, paperwork — dominate), so the marginal cost of extra capacity is low. Even at a 5c feed-in, exported energy isn't worthless — and more importantly, a bigger system covers more of your load in winter and on cloudy days, when generation halves and every self-consumed kWh matters most. The standard advice remains: fill the roof, or at least install the 6.6 kW that a standard 5 kW inverter allows.
Moving usage into the sun
Self-consumption isn't fixed — it's a schedule. The high-draw appliances are all shiftable:
- Hot water is the big one: a resistive tank on a timer (or a heat pump running at midday) turns your hot water system into a thermal battery, soaking up 3–4 kWh of would-be exports daily.
- Dishwasher, washing machine, dryer on delay timers to run midday.
- Air conditioning pre-cooling or pre-heating the house in the afternoon before evening peak.
- An EV, if you have one, is the ultimate export sponge — charging at midday costs you the 5c feed-in, not the 28c grid rate (see the EV running-costs guide).
Shifting from 30% to 50% self-consumption is realistic for most households with timers alone, and is worth roughly $500 a year on the NSW example — free money, no hardware.
The battery question
A battery converts your 5c exports into 28c avoided imports — worth about 23c per stored kWh cycled. A 10 kWh battery cycling fully every day captures roughly $840 a year. Against an installed cost of $9,000–$12,000 before subsidies, that's a 10–14 year unsubsidised payback: at or beyond warranty life. The 2025 federal battery rebate (~30% off installed cost) pulls that toward 7–9 years — viable, especially stacked with state schemes or VPP credits, but still a slower return than the panels themselves. The honest sequence: panels first, usage-shifting second, battery third, and only after running your actual evening usage through the battery ROI calculator.
Getting off gas closes the loop
Solar's value depends on having electric loads to feed. A household still running gas hot water, gas heating and gas cooktop exports its solar at 5c while paying gas prices plus a daily gas supply charge (~$1/day, $365/year just for the connection). Electrifying those loads — heat pump hot water, reverse-cycle heating — moves them onto your 5c-cost midday power, and dropping the gas connection entirely banks the supply charge. The gas vs electric calculator compares running costs appliance by appliance.
The bottom line
Solar in 2026 pays back in 3–6 years, but the range between those numbers is you: your daytime usage, your timers, your appliances. Size the system to the roof, move every flexible load into daylight, treat the battery as a second decision for a later year — and run your own tariff and usage through the calculator rather than trusting a salesperson's payback slide.
Sun-hours, tariffs and feed-in rates are the state averages used across our calculators (AER, state feed-in schedules, BOM solar data), current July 2026. General information, not advice.