How to calculate your solar payback period in Perth yourself

Perth solar installers typically include a payback period in their quotes: "this system pays for itself in 5 years" or "7-year payback." These numbers are marketing claims with assumptions built in — and the assumptions vary significantly between installers. Some are reasonable; others assume your household will use 100% of solar generation, ignore export revenue limits, or project prices that no longer apply.

Here's how to build your own payback estimate, using real Perth numbers, from a quote you've received.

The payback period formula

Payback period (years) = Total system cost ÷ Annual net savings

Where annual net savings = (electricity you would have bought from the grid but now generate from solar × avoided import rate) + (electricity exported to the grid × export rate) − (any ongoing system costs)

The two key variables are:

• Self-consumption ratio: what proportion of solar generation you use directly (vs export)
• The rates: Perth's A1 tariff (import) and DEBS rate (export)

Perth's actual tariff numbers (as at 1 July 2026)

| Rate | Value (1 Jul 2026) | |---|---| | A1 tariff (import, peak hours) | 33.2621c/kWh | | A1 supply charge | 103.5c/day (~$377/year) | | DEBS Super Off-Peak export (9am–3pm) | 10c/kWh | | DEBS Off-Peak export (outside 9am–3pm solar hours) | 2c/kWh |

Important: Most solar export happens during the DEBS Super Off-Peak window (9am–3pm when the sun is generating). Very little solar is exported outside these hours. For simplicity, assume all export earns 10c/kWh.

The gap between import (33.26c) and export (10c) rates is the core reason self-consumption matters: a kWh you use yourself is worth 33.26c; a kWh you export is worth 10c.

Step 1: Estimate your annual solar generation

Take the system size from the quote (in kW DC). Apply Perth's standard generation factor:

Perth solar generation estimate = kW × 5.0 PSH × 365 days × 90% system efficiency (5.0 = Perth's average peak sun hours per BOM data; 90% = inverter + cabling losses)

| System size | Estimated annual generation | |---|---| | 6.6kW | ~10,800kWh/year | | 10kW | ~16,400kWh/year | | 13.3kW | ~21,800kWh/year |

You can refine this with the angle and orientation: north-facing at 20–30° pitch = 100% of the estimate; east/west-facing ≈ 85–90%; south-facing ≈ 70–75%.

Step 2: Estimate your self-consumption ratio

Self-consumption is the proportion of solar generation your household uses directly, before it would otherwise export.

Self-consumption ratios for Perth households without a battery:

| Scenario | Estimated self-consumption | |---|---| | Low consumption, small system (6.6kW, 6,000kWh/yr household) | 45–55% | | Average consumption, 10kW (8,000kWh/yr household) | 40–50% | | High consumption, large loads (pool, ducted AC), 13.3kW | 50–65% | | With load shifting (pool 9am–3pm, dishwasher timed) | add 5–10% | | With 10kWh battery | 75–85% of total generation |

An installer claiming 70%+ self-consumption without a battery on a standard Perth residential system is being optimistic. 40–55% is the realistic range without deliberate load shifting.

Step 3: Calculate annual savings

Using the formula:

Annual savings = (Generation × self-consumption ratio × 33.26c) + (Generation × (1 − self-consumption ratio) × 10c)

Worked example: 10kW system, 8,000kWh/yr household

• Annual generation: 16,400kWh
• Self-consumption estimate: 45% → 7,380kWh self-consumed; 9,020kWh exported
• Savings from self-consumption: 7,380kWh × $0.3326 = $2,453
• Export revenue: 9,020kWh × $0.10 = $902
• Total annual savings: $3,355

Payback period: $18,000 cost ÷ $3,355/year = 5.4 years

Step 4: Sanity-check the installer's number

Compare your estimate to what the installer quoted. If the installer's payback number is significantly shorter than yours, look for these common reasons:

1. Higher self-consumption assumption Ask the installer what self-consumption ratio they used. A claim of 70% without battery is questionable for most Perth homes. Request the underlying assumption.

2. Higher tariff assumption Some quotes still use outdated tariff rates (e.g. 29c or 31c/kWh from before the 1 July 2026 increase). Verify the import rate used is 33.2621c.

3. Export rate optimism Some quotes assume all exports earn 10c. This is technically correct for DEBS Super Off-Peak (9am–3pm), but a small amount of solar generation falls outside this window. The 10c assumption is reasonable as a simplification.

4. Excluding GST or including government rebate in both the cost and the saving Confirm the system cost in the payback calculation uses the post-STC price (what you actually pay after STCs are assigned to the installer), and that STCs aren't double-counted.

5. Assuming no degradation over time Solar panels degrade at approximately 0.4–0.5%/year (TOPCon) or 0.55%/year (PERC). Over 10 years, generation drops to approximately 94–96% of year-1 output. A payback calculation ignoring degradation overestimates annual savings in later years — the effect is small but real over 10+ years.

Adding a battery to the calculation

A battery changes the self-consumption ratio and adds to the system cost:

For a 10kWh battery (approximately $8,000–$12,000 additional):

• Self-consumption rises from ~45% to ~78% of generation
• New annual savings: (16,400kWh × 78% × $0.3326) + (16,400kWh × 22% × $0.10) = $4,249 + $361 = $4,610
• Total system cost: $18,000 + $10,000 = $28,000
• Payback: $28,000 ÷ $4,610 = 6.1 years (vs 5.4 years solar-only)

The battery adds approximately 0.7 years to payback in this example while delivering an additional $1,255/year in savings. The battery's value comes after payback — it continues delivering ~$4,600/year vs the solar-only ~$3,355/year.

A quick payback reference table (Perth, A1 tariff, DEBS 10c)

| System | Est. cost | Est. annual saving | Approx. payback | |---|---|---|---| | 6.6kW, no battery | $8,000–$12,000 | $1,600–$2,200 | 5–6yr | | 10kW, no battery | $13,000–$18,000 | $2,800–$3,600 | 4.5–6yr | | 13.3kW, no battery | $17,000–$24,000 | $3,500–$5,000 | 4.5–6yr | | 10kW + 10kWh battery | $21,000–$30,000 | $3,800–$5,200 | 5.5–7.5yr | | 13.3kW + 10kWh battery | $25,000–$36,000 | $4,500–$6,500 | 5–7yr |

(Ranges reflect variability in system cost, household consumption pattern, and roof orientation. Use these as benchmarks, not guarantees.)

The most common reason a quoted payback looks better than your own calculation is a higher assumed self-consumption rate. Ask your installer for their assumption — if it's above 60% without a battery for a typical Perth household, push back or ask for the basis. A 4–7 year payback range for Perth residential solar in 2026 is realistic. Numbers below 4 years usually involve overly optimistic assumptions.