Main image: Australian households are putting more solar panels on their roofs, including this Melbourne house with 86 panels and 20 megawatt capacity. Nearmaps

Financial Review / Mark Ludlow / 9 March 

Australian households are installing roof-top solar systems of up to 20 kilowatts capacity- once considered a small business installation -to get more “bang for their buck” as the falling price of solar photovoltaic systems has lead to a record number of installations in the first few months of 2018.

While the price of batteries has not fallen enough to reach the consumer “sweet spot”, Australia’s love affair with rooftop solar systems showing no signs of abating, especially as next-generation panels have a lot more capacity than 10 years ago.

The latest industry figures show 117.4 megawatts of capacity installed in February, in a sign of another bright year for the solar sector in 2018, following 1 gigawatt (or 1000 megawatts) being installed last year.

Green Energy Markets director Tristan Edis said the installation numbers were “extraordinary”, even taking into account many of the jobs for last month may have been a spill over from last year.

“While we expect a fair chunk of this capacity in February in fact reflects installs and sales that were locked in from last year, the market is well above where it was the same time last year and that ultimately turned it into a record year for capacity,” Mr Edis said.

Mr Edis said they have had to re-classify data on solar units as most systems of 10 kilowatts to 15 kilowatts have been going onto residential homes, not businesses.

“These were formerly categorised as belonging to the commercial segment. It seems that with the large drop in module prices many residential customers are now choosing to max out their roof with as much as solar as they can fit,” he said.

SunWiz managing director Warwick Johnston said February’s installed capacity – which was 35 per cent higher than any February before was the best start ever to a year for the solar sector.

“Already it’s clearly the best start to any year and 38 per cent ahead of the year to date figures for last year. On 118 megawatts, it’s a top three month ever and shows a blinding start to the year ,” he said.

One solar installer in Melbourne sold $360,000 worth of products in February alone.

Victorian-based energy company PureElectric executive director Matthew Wright said in the first wave of solar installations a decade ago most households installed a 1 kilowatt to 1.5 kilowatt system.

But as the price of solar panels have fallen over the past five years – and the capacity of panels has increased – households are now deciding to “get more bang for your buck”, according to Mr Wright.

He has installed a 20 kilowatt unit in Melbourne with 86 panels on a suburban roof at a cost of about $16,700. A decade it would have cost the same amount for a 4 kilowatt system.

The amount of power generated does not quite make you self-sufficient but it takes take the edge off the quarterly electricity bill. Households who were previously lured in by generous feed-in tariffs from state governments or retailers are now drawn in by a pure economic proposition.

Mr Wright said he was now installing on average a 10 megawatt systems to households, which costs about $10,000 to $12,000, which delivers the lowest cost per panel.

“The sweet spot now is 10.8 megawatts – which costs about $10,000 to $12,000 – which delivers the lowest cost per panel. You get heaps more bang for your buck now,” Mr Wright told AFR Weekend.

“The subsidy [Renewable Energy Target certificate system] made a greater proportion when people bought those small systems, now it makes up 30-40 per cent of up-front purchases. But the cost of the panels are so much lower now.”

While home battery system have taken off in the past few years – with back-order for Tesla’s Powerwall – the price has not come down enough yet to really take off in Australia.

“Batteries have come down but they haven’t quite yet hit the sweet spot like solar panels did in 2007-08 when the boom happened, but it’s only a few years away,” Mr Wright said.