With electricity prices continuing to rise, more Victorian homeowners are turning to solar to take control of their energy costs. Here's exactly how much you can expect to save in 2026.
Current Electricity Prices in Victoria
Understanding your electricity costs is the first step to calculating solar savings.
Victorian Default Offer (VDO) 2025-26
The Essential Services Commission sets the Victorian Default Offer, which serves as a benchmark for electricity prices:
- Annual Cost (VDO): Approximately $1,546 per year for 4,000 kWh usage
- Usage Rates: 19-25 cents per kWh (varies by retailer and plan)
- Daily Supply Charge: Around $1 per day ($365/year)
Average Victorian Household
- Annual Usage: Approximately 5,077 kWh
- Annual Electricity Bill: $1,300 to $1,900 (depending on retailer and usage patterns)
Solar System Savings Breakdown
6.6kW System (Most Popular Choice)
A 6.6kW solar system is the sweet spot for most Victorian homes:
| Metric | Value |
|---|---|
| Annual Generation (Melbourne) | ~9,100 kWh |
| Self-Consumption (typical) | 30-40% |
| Export to Grid | 60-70% |
| Annual Bill Reduction | $1,200-$1,600 |
How Savings Are Calculated
Your solar savings come from two sources:
- Self-Consumption Savings: Energy you use directly from your panels (saves full retail rate of 19-25c/kWh)
- Feed-in Tariff Income: Energy exported to the grid (earns 4-8c/kWh depending on retailer)
Example for a 6.6kW system:
- Self-consumed: 3,000 kWh × 22c = $660 saved
- Exported: 6,100 kWh × 5c = $305 earned
- Total Annual Benefit: $965-$1,400
Payback Period Analysis
System Cost After Rebates
| Component | Cost |
|---|---|
| 6.6kW System (before rebates) | $6,000-$9,000 |
| Less: Solar Victoria Rebate | -$1,400 |
| Less: STCs (~36 certificates) | -$1,440 |
| Net Cost | $3,160-$6,160 |
Payback Timeline
With annual savings of $1,000-$1,400:
- Payback Period: 3-5 years (depending on system cost and self-consumption)
- Break-even Point: Most systems pay for themselves well within the warranty period
25-Year Savings Projection
Solar panels typically last 25-30 years with minimal degradation. Here's what you can expect over the system lifetime:
Conservative Estimate (No Electricity Price Increases)
| Year | Cumulative Savings |
|---|---|
| Year 5 | $5,000-$7,000 |
| Year 10 | $10,000-$14,000 |
| Year 15 | $15,000-$21,000 |
| Year 25 | $25,000-$35,000 |
Realistic Estimate (3% Annual Price Increase)
Electricity prices have historically increased by 3-5% annually. Factoring this in:
| Year | Cumulative Savings |
|---|---|
| Year 5 | $5,500-$7,700 |
| Year 10 | $12,000-$17,000 |
| Year 15 | $21,000-$29,000 |
| Year 25 | $40,000-$56,000 |
Maximising Your Savings
1. Shift Usage to Daylight Hours
Run high-energy appliances (dishwasher, washing machine, pool pump) during the day when your panels are generating.
2. Right-Size Your System
A larger system isn't always better. Match your system size to your daytime usage patterns for optimal ROI.
3. Consider Battery Storage
Adding a battery can increase self-consumption from 30-40% to 70-80%, significantly boosting savings — especially with the Cheaper Home Batteries Program offering 30% off.
4. Monitor Your System
Use your inverter's app to track generation and identify any performance issues early.
Feed-in Tariffs in Victoria
Current feed-in tariff rates vary by retailer:
| Retailer Type | Typical Rate |
|---|---|
| Minimum Rate | 4.0c/kWh |
| Standard Offers | 5-6c/kWh |
| Competitive Offers | 7-8c/kWh |
Tip: Shop around for the best feed-in tariff, but don't choose a plan solely based on this — overall rates and self-consumption matter more.
Return on Investment Comparison
How does solar compare to other investments?
| Investment | Typical Annual Return |
|---|---|
| Term Deposit | 4-5% |
| Shares (long-term average) | 7-10% |
| Solar Panels | 15-25% |
Solar consistently outperforms traditional investments, with the added benefit of protection against rising electricity prices.
The Bottom Line
For the average Victorian household, a 6.6kW solar system:
- Costs: $3,160-$6,160 after rebates
- Saves: $1,000-$1,400 per year
- Pays back: In 3-5 years
- Total 25-year savings: $30,000-$50,000
With electricity prices only expected to rise, there's never been a better time to invest in solar. Contact H.T Electrics and Solar for a personalised savings analysis based on your actual usage.
