5kW Solar Power System – Costs, Savings, Payback

A 5kW solar system is a medium-sized system perfect for family homes, small commercial buildings or larger homes with less energy usage.

  • 14 Tier 1 Solar Panels
  • CEC Approved 5 kW Inverter
  • Installation by CEC Qualified Retailer
4.6 out of 5
219 reviews
4.6 out of 5
219 reviews

A 5kW solar system is a medium-sized unit perfect for family homes, small commercial buildings, or larger homes with less energy usage.

It’s no secret that electricity bills are a significant expense for every Australian to deal with each month. Rising tariff costs have driven many homes, offices, and commercial enterprises to seek more cost-effective ways to power their home. A 5kW solar system is an excellent alternative and widely suited to many homes.

5kW systems can provide more than the total energy consumption for the average Australian home, making it an obvious, and relatively inexpensive way to reduce your energy bills.

This article will advise you about the cost of 5kW solar systems, their energy output, how many panels they contain, and – most importantly – how much you can save by owning one.

Let’s begin!

Is a 5kW Solar System Suitable for My Home?

A 5kW solar system is suitable for medium-size homes with an energy bill between $400-$600 per quarter. Determining household energy needs by the number of people in your home can be unreliable, but as a rule of thumb, an average 4-person household will be best suited to a 5kW household.

If your home does not have ducted air conditioning, a heated pool, or regularly uses large white good appliances, then a 5kW system should cover your usage needs. If you have an energy-hungry home and use more than 20-30kW a day, a larger system may be better suited. Or if you are a 2 person household with limited energy requirements then a 3kW solar system is better suited.

It can comfortably supply 20 kWh daily for an average household of four to five occupants.

If your home has a north, east, or west-facing roof with enough space, then a 5kW solar pv system will suit your home.

How Many Solar Panels are in a 5kW System? 

The number of panels in a 5kW system depends on the wattage and size of the panel. A 5kW system produces 5000W of power. So, the number of panels, multiplied by the wattage of each panel, needs to equate to 5000W. On average, there are between 13-20 panels in a solar system, depending on the output of the solar panels themselves.

The panels produced nowadays have wattage as high as 400 W, however, at Nectr, we use 370W panels. At this output, you would need 13-14 panels.

Below is a table showing the average number of panels needed for 5kW system relative to the power output of the panels:

Panel Power OutputNumber of Panels for a 10kW System

The higher each panel’s wattage, the fewer panels a 5kW system will require.

Do I Have Enough Roof Space for a 5kW Solar System?

If your home is suited for solar, you’ll need between 25 – 35 m² of roof space to install a 5kW solar system.

Solar panels come in various sizes, depending on the manufacturing company, as we mentioned above.

A panel measures 1.7m x 1m in size and consists of 14 to 20 panels, based on the wattage.

You may plan to install a solar system with 370 W per panel. In this case, a 5kW system will consist of 14 solar panels.

However, to determine if your roof has enough space, first, you need to know if your roof is suitable for solar, including if it has multiple orientations or is made of hazardous material.

How Much Does a 5kW Solar System Cost?

A high-quality 5kW solar system ordinarily costs between $6,600 – $ 10,160 but due to government rebates available to Australian homeowners, a substantial portion of the upfront price is subsidised.

So, when looking to purchase a 5kW system, your budget should be between $4,500 – $8,000, depending on the components selected and the installer’s installation method.

The CEC determines fair price ranges for solar systems. They have determined a 5kW solar system should cost roughly between $3,500 – $9,500 if you are looking for a quality system.

2kW$2,800 – $5,600
3kW$2,900 – $6,950
4kW$3,400 – $7,900
5kW$3,500 – $9,500
10kW$7,600 – $14,100

How Much Will a 5kW Solar System Save You?

On average, a 5kW system will save the average homeowner $56,521 over the course of its lifetime, with an average annual savings of $1,222.0 per year. This is the equivalent of $65,722 before tax over the lifetime of the system. This is based on the assumption that the homeowner has a bill of $600/qtr, installs the panels facing north, and uses 50% of the generated power. The actual amount a homeowner will save is dependent on the amount of power used in the home, the orientation of the solar panels, and the quality of the system.

This is because a 5kW solar system will produce on average 21 kWh per day; multiply that by the number of days in a year (365), and this will amount to 7,200 kWh of energy (21 kWh x 365 = 7,665 kWh).

Data from the Australian Energy Council shows that the average price per kilowatt-hour in Australia equals 25.05 cents (c/kWh).

Now, if you somehow used all of the 7,665 kWh of energy produced by the solar system in one year, you would still reach an annual saving of $1803.60.

However, not all homes use all the power they produce. In fact, some homeowners only consume 50% of the power they produce. In that case, the savings will be reduced.

What is the Payback Period for a 5kW Solar System?

A 5kW solar system would take an Australian household on average 3.43 years to pay off. This figure however depends on where you live, your cost of electricity, your feed-in tariff, and your daily energy usage.

To determine how long it would take to pay off a system, you must calculate the total monetary value of the energy produced by the system on an annual basis, and divide the cost of the system by this figure.

You can do this by figuring out what the cost of power is, how much you will export, and use in the home, and how what your daily savings are.

Below is a table that shows the average payback time for each capital city based on real production expectations, the latest electricity prices and more.

CitySystem CostElectricity CostFeed-In TariffEnergy UsageAnnual SavingsPay Off (Years)
All figures are based on the latest prices. Rates and FiT may change. This is for informational purposes only. SolarVic provides up to $1500 towards solar.

How Long Will a 5kW Solar System Last?

High-quality 5kW solar systems like the ones we have at Nectr come with a warranty of at least 25 years, and an estimated lifespan of 30 years.

This doesn’t mean that the system will stop producing energy after 25 years. It just won’t be as energy-efficient as it was previously. This is because panels degrade over time due to exposure to the sun’s heat and light. This is referred to as Light and Elevated Temperature Induced Degradation or LetiD. Higher quality panels are more resistant to this degradation and perform at their peak for longer.

A report by the National Renewable Energy Laboratory (NREL) in 2012 reveals that solar panels degrade by 0.8% per year on average. As long as external forces don’t damage the panel, the system will continue to serve you for between 25 to 40 years. By year 25, a solar panel is expected to perform at 80% of its original efficiency.

You should also consider inverter degradation. Residential solar inverters have shorter lifespans. They normally last about 10-15 years (with 5 to 10-year warranties). This means you will have to replace your solar inverter sooner than the actual panels.

You can extend the longevity and performance of a solar system through proper maintenance and cleaning.

How Much Power Does a 5kW Solar System Produce?

A 5kW solar system generates 21kWh of power per day on average. The actual amount a 5kW solar system will produce on a given day is impacted by the average sunlight received in your area, the weather, and the orientation of your solar panels.

This is because on average, an Australian household receives approximately 4.2 peak sun hours per day, however, this can vary based on location, with some cities receiving over 5 hours, and others under 4. A peak sun hour is the equivalent amount of sun received during the middle of the day. So while a solar system is in the sun from sunrise to sunset, the sunlight is closer to spending 4.2 hours in the sun during midday. A 5kW system will produce 5kW of power for every peak hour, so over 4.2 peak sun hours, a system will generate roughly 21kWh.

The amount of direct sunlight available in your location is the primary concern in calculating how much power your solar panels will generate, as the weather and climate will impact the total sunlight absorbed by the panels. For example, clouds or overcast weather can drastically reduce a system’s production.

Here is a table that shows the average system production for each major city, along with the number of peak sun hours it receives.

CityPeak Sun HoursProduction (kWh)

At Nectr, when we calculate the output of a system, we use peak sun hours to make sure our models are correct in the long term.

Additionally, the orientation of the solar panels will impact your system’s ability to produce electricity from sunlight.

Will a 5kW Solar System Power Your Home?

A 5kW solar system is certainly powerful enough to cater to the average electrical needs of a four-to-five person household.

However, power compatibility depends on:

  • Utilities and home appliances that consume energy and therefore determine the maximum power usage in your household.
  • Your lifestyle. If you work from home, you’ll consume power all day, unlike a job where you can turn off the power supply until you return from work.
  • Any electrical vehicles you own. If you have a Tesla or plan to buy one, a 5kW solar system won’t be enough to power both the car and your household.
  • Your average daily energy usage during summer and winter.

Your solar system power compatibility depends on the above-listed factors and how these align to installation in your area.

To understand if a 5kW system can power your home, you’ll divide your average daily usage by 4.2 You can find your average daily use on your electricity bill.

Average daily usage (kWh) / 4 = Your recommended solar system size. Once again this is because a system will produce 4.2 times its size in power per day.

If the kilowatt per hour displayed on your home electricity bill shows you consume 20 kWh per day, a 5kW solar system will be enough. Anything higher than 20 kWh usage per day implies it won’t be sufficient.

We have given you a quick method to determine if a 5kW system will power your home. However, you can always speak to an expert at Nectr for more in-depth advice on what solar system size will suit your needs and plans.

Can I Install a Battery with a 5kW Solar System?

The short answer to this question is yes.

Installing battery storage systems with a 5kW solar system will enable you to use more of the energy you produce.

According to reports from the Climate Council, installing a 4 kWh battery with your 5kW system for everyday use can boost the amount of self-generated solar power a household consumes from 30% to 60%.

That’s a considerable increase in the amount of self-generated solar power. No wonder analyst projections estimate that 50% of Australian households will implement a solar storage system over the next ten years.

But whether you should install a battery depends on your budget, energy usage, and more. Nectr can help explain whether a battery will work for your home.

If you plan to reduce your carbon footprint, save money or reduce your home electricity bills, installing a battery with a 5kW system is an excellent first step. But you should also consider the additional cost of battery installation, your payback period, and how much you are likely to save over time.

Should I Consider a Larger or Smaller System?

A few things to consider before going solar are available space, energy needs, cost, and your overall aims for solar system installation.

A smaller system will produce less electricity than a larger system. Whether you’re a single occupant or a two-person household with low energy consumption, a smaller 3kW system will be plenty for daily use. 

But if you want a system that will generate extra power so you can export the surplus into the grid and earn some money per kilowatt-hour, you should invest in a larger system. Or maybe you plan to buy an electric car in the near future. In either situation, a larger system is the better option.

The cost is also an important factor since larger solar systems will cost more than smaller solar systems, impacting the payback period.

If your aim is to reduce your carbon footprint, save money or reduce your household electricity bill, a small solar system will be more than sufficient.

What other systems are there?

There are a number of system sizes to choose from including:

3kW Solar System

6kW Solar System

8kW Solar System

10kW Solar System

Get Started!

Interested in getting solar for your home? By clicking below you can use our smart solar calculator to find out just how much you could save with solar, what incentive you are eligible for, and the impact you will have on the environment.

Don’t wait until next quarter’s bloated bill, and get started today!

Click here to calculate your solar savings!

Join over 20,000 homeowners who have made the switch with Nectr, or the 1000+ positive reviewers who have been more than satisfied with their solar install.

Otherwise, you can always contact us on 1300 133 556, or email us at sales@instylesolar.com.au.

Ready to Start Saving with a 5 kW Solar System?

Let’s calculate exactly how much a 5 kW solar system could save you on your bills! Click now to get started.

The process has been really easy and the communication throughout has been excellent with everything explained in detail. If we had questions that staff have been really helpful, the workmanship was high quality with the installation.

Nicci Gelder

The team were very helpful and answered all our questions. We had great customer service and are looking forward to our solar system saving us money for our future.

Shannon Kelly

Normally I don’t write reviews, but these guys are so good I felt I had to. Their products are first class and the installation guys were brilliant. The staff at Nectr should give other companies lessons on customer service!

David Lease

Recommend by my cousin. Absolutely enjoyed the process from beginning to end with my Nectr panels. Great solar company! I will definitely recommend them to all my family and friends!

Anne De Guzman
4.6 out of 5
219 reviews
4.6 out of 5
219 reviews

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