Key points
- In our 2026 worked examples, a 6.6kW system pays for itself in about 2.7–4 years in Adelaide and about 3–6 years in Melbourne, depending on how much solar you use at home and whether you get the Victorian rebate.
- The biggest lever is self-consumption. Lifting it from 30% to 50% cuts payback by more than a year in both cities.
- Feed-in tariffs of around 0–8c/kWh now make up only a small share of savings.
- The federal STC discount drops each January. A 6.6kW system installed in 2027 gets roughly $320–$360 less than one installed in 2026.
The solar payback period is the number of years it takes for your electricity savings to equal what you paid for the system. In 2026, a typical 6.6kW home system in Adelaide pays for itself in roughly 3–4 years, and in Melbourne in roughly 3–6 years. Below we show exactly how to calculate it, with our assumptions stated so you can plug in your own numbers.
How do you calculate a solar payback period?
The formula is simple:
- Payback (years) = net system cost ÷ annual savings
- Annual savings = (solar used at home × the grid rate you avoid) + (solar exported × your feed-in tariff)
Net system cost is the price after the federal STC discount and any state rebate. Annual savings depend on four things: how much your system generates, how much of it you use yourself, what you pay for grid power, and your feed-in rate. This guide is part of our complete guide to solar savings, feed-in tariffs and power bills.
Our assumptions for 2026
| Input | Adelaide | Melbourne |
|---|---|---|
| System size | 6.6kW | 6.6kW |
| Price after STCs (typical 2026 market) | $5,500 | $6,000 |
| Solar Victoria rebate (if eligible) | – | −$1,400 |
| Average output | 4.3 kWh per kW per day | 3.7 kWh per kW per day |
| Annual generation | about 10,300 kWh | about 8,900 kWh |
| Grid rate avoided | 35c/kWh | 28c/kWh |
| Feed-in tariff (average) | 4c/kWh | 4c/kWh |
Prices for a 6.6kW system after STCs typically range from about $4,500 to $8,000 in 2026, depending on panel and inverter brands and roof complexity. The grid rates sit below the 2026–27 flat-rate default offer caps (about 42c in SA, 26–32c in Victoria) because most people are on cheaper market offers. The STC discount is about 45 certificates in Adelaide and 39 in Melbourne for a 6.6kW system in 2026, worth roughly $1,800 and $1,550. Our explainer on how STCs are calculated has the detail.
Solar payback period examples: Adelaide vs Melbourne
| Scenario | Annual savings | Net cost | Payback |
|---|---|---|---|
| Adelaide, 30% self-consumption | about $1,370 | $5,500 | about 4.0 years |
| Adelaide, 50% self-consumption | about $2,010 | $5,500 | about 2.7 years |
| Melbourne, 30%, no state rebate | about $1,000 | $6,000 | about 6.0 years |
| Melbourne, 30%, with $1,400 rebate | about $1,000 | $4,600 | about 4.6 years |
| Melbourne, 50%, no state rebate | about $1,420 | $6,000 | about 4.2 years |
| Melbourne, 50%, with $1,400 rebate | about $1,420 | $4,600 | about 3.2 years |
To show the working for Adelaide at 30%: 3,090 kWh used at home × 35c = $1,082, plus 7,210 kWh exported × 4c = $288, for total savings of about $1,370 a year. $5,500 ÷ $1,370 = 4.0 years.
These results line up with independent modelling. SolarQuotes’ January 2026 figures for a $6,000 6.6kW system put simple payback at 2.9–3.6 years in Adelaide and 5.4–7 years in Melbourne, depending on household usage.
Another way to look at it: annual savings of $1,000–$2,000 on a $4,600–$6,000 outlay is a return of roughly 17–37% a year in these examples. Few investments come close, although savings aren’t guaranteed and depend on future prices.
Why is solar payback faster in Adelaide?
- More sun. Adelaide is in STC Zone 3 and Melbourne in Zone 4. Each kilowatt of panels in Adelaide produces roughly 15–17% more energy a year.
- Higher grid prices. SA has some of the highest retail electricity rates in the country, so each kWh of solar you use saves more.
- A bigger STC discount. Adelaide’s higher zone rating means more certificates for the same system.
Melbourne’s advantage is the Solar Homes rebate of up to $1,400 for eligible owner-occupiers (household income under $150,000, property under $3 million and no solar claimed in the past 10 years), which narrows the gap.
What makes payback longer or shorter?
Things that shorten payback
- Using more solar during the day. Timers, heat pump hot water, pool pumps and EV charging all help. See 15 ways to use more of your own solar.
- Higher household usage. Bigger daytime loads mean more solar used at the full grid rate.
- Choosing a well-priced, quality system. A cheap system that fails early is not a bargain.
Things that lengthen payback
- Low daytime use. If nobody is home, more solar is exported at a few cents.
- Time-of-use tariffs without a battery. Solar used at midday only offsets the cheap solar sponge or solar soak rate, around 17c.
- Falling feed-in tariffs. Neither state has a minimum rate any more. Our guides to SA feed-in tariffs and Victoria’s feed-in tariff cover current rates.
- Shading, poor orientation or export limits. These all reduce useful output.
Is it worth waiting until 2027?
Probably not. STCs are calculated on the years left until the scheme ends in 2030. In 2026 a system gets 5 years of deemed output, falling to 4 years in 2027. For a 6.6kW system that’s about 36 STCs in Adelaide instead of 45, and about 31 in Melbourne instead of 39. At around $40 per certificate, that’s roughly $320–$360 less discount. Meanwhile, each year you wait you also miss a year of savings, which in our examples is worth $1,000–$2,000.
What about adding a battery?
Batteries take longer to pay back than panels alone, but they lift self-consumption sharply, often to 70–90%, and the federal Cheaper Home Batteries discount is at its highest for installs until 31 December 2026. A battery’s own payback depends on your evening use and battery price, so assess it separately. Our guide on whether a solar battery is worth it in 2026 runs those numbers.
If your household uses a lot of power, a larger system can still pay back quickly because panels are cheap relative to the extra output. Compare our 6.6kW solar system and 10kW solar system packages to see what fits your roof and usage.
Frequently asked questions
What is a good payback period for solar in Australia?
Anything under about 7 years is generally considered good for a home system, given panels often carry 25-year product warranties. In 2026, well-designed 6.6kW systems in Adelaide commonly pay back in 3–4 years and in Melbourne in 3–6 years, with faster results for homes that use plenty of power during the day.
Does the feed-in tariff affect my solar payback?
Less than it used to. With rates of around 0–8c/kWh in SA and Victoria, exports made up only about $180–$290 a year of savings in our examples. The value of solar used at home, worth 28–35c/kWh in our assumptions, matters far more. Even a 0c feed-in tariff only adds roughly one to two years to payback.
How long do solar panels last after they’ve paid for themselves?
Quality panels are designed to last 25 years or more, so a system that pays back in 3–6 years can deliver around 20 years of further savings. Inverters usually need replacing at least once in that time, so factor in that cost when you estimate long-term returns.
Is solar payback faster for businesses?
Often, yes. Businesses that operate during daylight hours use a larger share of their solar on site, sometimes most of it, so each kWh offsets the full grid rate rather than earning a small feed-in credit. Tax treatment can also help, so speak to your accountant about depreciation.
Want a payback estimate based on your actual bills and roof? Our Adelaide and Melbourne team can model it for you at no cost. Get a free quote.
Sources: Clean Energy Regulator – Small-scale Renewable Energy Scheme; Solar Victoria – Solar panel rebate; SolarQuotes – Are solar panels worth it? Payback by city (16 Jan 2026); AER – Default Market Offer 2026–27; Essential Services Commission – Victorian Default Offer 2026–27. Payback figures are worked examples, not quotes or guarantees; prices, rebates and tariffs change. Featured image: U.S. Department of Energy / Wikimedia Commons, Public domain.
