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)

Important: Most solar export happens during the 9am–3pm window, when the sun is generating, but that window earns the lower off-peak rate of 2c/kWh. Only exports between 3pm and 9pm earn the higher 10c/kWh peak rate, and relatively little solar is exported during those hours. For simplicity, assume most export earns 2c/kWh.

The gap between import (33.26c) and export (2c, for most exports) rates is the core reason self-consumption matters: a kWh you use yourself is worth 33.26c; a kWh you export during the 9am–3pm window is worth only 2c.

---

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)

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:

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) × 2c)

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 × $0.02 = $180
• Total annual savings: $2,633

Payback period: $18,000 cost ÷ $2,633/year = 6.8 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 incorrect: the 10c rate only applies to exports during the 3pm–9pm peak window, and most solar export happens during the 9am–3pm window, which earns just 2c. A quote using 10c across the board overstates export revenue and understates the true payback period.

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% × $0.02) = $4,249 + $72 = $4,321
• Total system cost: $18,000 + $10,000 = $28,000
• Payback: $28,000 ÷ $4,321 = 6.5 years (vs 6.8 years solar-only)

At the correct 2c/kWh export rate, shifting export into self-consumption is worth a lot more than the export revenue it replaces, so the battery in this example doesn't add to payback time: the combined system actually pays back slightly faster than solar alone, while delivering an additional $1,688/year in savings. The battery's value continues afterwards too. It keeps delivering ~$4,321/year vs the solar-only ~$2,633/year.

---

A quick payback reference table (Perth, A1 tariff, DEBS 2c for most exports)

(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 5.5–8 year payback range for Perth residential solar in 2026 is realistic. Numbers below 5.5 years usually involve overly optimistic assumptions.