For most Australian households with a decent roof and some daytime electricity use, solar is still worth it in 2026, and by a comfortable margin. The numbers that decide it are simple: what the system costs after the discount, how much of its output you use yourself, and what you get paid for the rest. When those line up, a typical system pays for itself in about four to six years and then keeps saving for another decade or two.
The honest version includes the cases where it does not stack up, and the quiet trend underneath the headline. The federal discount shrinks each year, so the sums are slightly worse each January than the one before. This article works through a real example, shows you how to run it for your own bill, and flags the situations where waiting or choosing something else makes sense. For quote benchmarks, see solar panel prices in Australia for 2026.
A worked example
Start with a 6.6 kW system, a common household size. Assumptions, which you should replace with your own:
- Net cost after the STC discount: $5,500
- Annual generation: about 9,000 kWh (about 25 kWh a day, typical for much of the country, higher in the sunniest zones)
- Self-consumption: 40 percent, so 3,600 kWh used at home
- Electricity price avoided: 33 cents per kWh
- Exports: 5,400 kWh at 5 cents per kWh feed-in
The sums:
| Item | Calculation | Annual value |
|---|---|---|
| Power you do not buy | 3,600 kWh x $0.33 | $1,188 |
| Exports | 5,400 kWh x $0.05 | $270 |
| Total saving | $1,458 | |
| Payback | $5,500 / $1,458 | about 3.8 years |
That is a good result. Now stress it.
Sensitivity: what moves the answer
| Change | Annual saving | Payback |
|---|---|---|
| Base case | $1,458 | 3.8 years |
| Self-consumption 25% (out all day) | $1,080 | 5.1 years |
| Avoided tariff 26c instead of 33c | about $1,200 | 4.6 years |
| Net cost $7,500 | $1,458 | 5.1 years |
| Last three together | about $920 | 8.1 years |
The pessimistic combination still pays back well within the 25-year life of the panels. Even so, eight years is a long wait, and a very different proposition from the base case. The point is not that one number is right. It is that your own usage and your own quote move the answer a lot.
To check this against your bill, find your daily usage, your tariff and, if you can, how much power you use between 9am and 3pm. Households with someone home, a pool pump, air conditioning or an EV charger in the day do better than those who are out at work and use most power at night.
The discount is shrinking
The federal STC discount falls every January. For 2026 installs the deeming period is five years. It is four years for 2027, and it falls to one year in 2030 before the scheme ends on 31 December 2030. Using the 6.6 kW example in a 1.382 zone:
- 2026: about 45 certificates, around $1,710 at $38
- 2027: about 36, around $1,370
That is $340 less discount for the same system, which adds about three months to the payback in our base case. It is a small effect on one year, and it stacks. But it is not a reason to rush into a poor quote. It is a reason to avoid delay if you have already decided. Our guide to what changes in January 2027 and the answer on installing now or waiting go further.
Where solar does not stack up so well
Be honest with yourself about these cases:
- A shaded or poorly oriented roof. Output drops, and payback stretches. A good installer will model this before quoting.
- Very low daytime usage and low feed-in rates. If you export most of your output at a few cents, the value is thin.
- Short time in the home. If you plan to sell in two years, the value may not fully show in the sale price, though many buyers value solar.
- Renters. Without the landlord’s agreement there is no system to install.
- A very cheap quote with poor equipment. Savings evaporate if the inverter fails in year four.
What about adding a battery?
A battery lifts self-consumption but costs more, and payback is longer than for solar alone. The Cheaper Home Batteries Program, from 1 July 2025, gives an STC-based discount on batteries from 5 to 100 kWh of usable capacity, with up to 50 kWh eligible. For 2026 installs the factor is 6.8 STCs per kWh, falling to 5.7 on 1 January 2027 and to 5.2 on 1 July 2027. The discount is substantial, but whether the battery pays back depends on your tariffs and usage. We cover that in the battery STC pages and in should I buy a battery before 2027.
From the desk: Ask your installer to run the payback using your own bill, not a generic example, and to show their assumptions: generation, self-consumption, tariff and feed-in. If the numbers rely on a tariff much higher than your bill, or a generation figure well above what the roof can deliver, the quote is selling, not advising.
Other benefits that are real but harder to count
Solar protects you against rising electricity prices, because every kWh you generate is one you do not buy at the future rate. It reduces your household’s emissions. It may add to your home’s appeal. None of these needs a number to be real, but none should rescue a bad deal.
A quick test
Four questions will tell you most of what you need:
- Is my roof mostly unshaded and facing roughly north, east or west?
- Do I use a fair share of my electricity during the day, or could I shift some?
- Is my net quote in the range of about $0.70 to $1.15 per watt?
- Does the quote show the STC discount as a separate, realistic line?
Four yes answers, and solar is very likely worth it. One or two noes, and it is worth getting more detail before you sign.
What to do next
- Pull your last two electricity bills and find your daily usage and tariff
- Get three itemised quotes, and run the payback on each using the table above
- Check the STC line on each against the deeming period guide
- Read how much solar panels cost and see the resources hub for more