What Is the Catch With Solar Panels?
Solar panels are a great investment for plenty of Australian homes. But they are not magic. There are real downsides, limitations, and scenarios where solar does not make financial sense.
Here is the honest picture — the catches, the trade-offs, and the situations where you should think twice before installing.
The Upfront Cost Is Still Significant
A decent 6.6kW solar system costs $4,500 to $7,000 before considering any rebates. After the STC discount, you will pay roughly $3,500 to $5,500 out of pocket. That is real money.
Even with payment plans or solar loans, you are committing to a significant upfront outlay. If you are not planning to stay in your home for at least 5-7 years, you may not recoup the investment before you sell.
Payback Takes 4 to 8 Years
Many households can recoup their solar investment within several years, but the payback period depends on system cost, tariffs and how much solar power you use during the day.
Our solar payback calculator can show you an estimate based on your actual usage.
Not Every Roof Suits Solar
Three factors kill solar viability on a roof:
- Shading — even partial shade on a single panel can drop total system output significantly. Trees, neighbouring buildings, and chimneys all matter.
- Orientation — north-facing is ideal. East and west work but produce less. South-facing is generally not worth it in most of Australia.
- Condition — if your roof needs replacing in the next 5 years, you should do that first. Adding solar to an old roof means removal and reinstallation costs later.
A quick check: look at your roof from the street around midday. If it is in shade for most of the day, solar may not be for you.
Savings Depend on Daytime Usage
Solar panels generate power during the day. If nobody is home to use it, most of that power goes to the grid. You get paid a feed-in tariff for exports, but that rate (typically 5c to 10c per kWh) is much lower than what you pay for grid power (25c to 35c per kWh).
The real value of solar comes from self-consumption — using the power while it is being generated. If you run appliances during the day, work from home, or can shift your usage, solar makes more sense. If you are out all day, the savings are smaller.
Feed-In Tariffs Keep Dropping
As more homes install solar, the value of exported power keeps falling. Feed-in tariffs in most of Australia have dropped from 15c+ per kWh a few years ago to 5c-10c today. In some areas, they are headed toward zero or even negative during peak solar generation hours.
This trend makes self-consumption even more important and reduces the value of simply exporting everything.
The STC Discount Shrinks Every Year
The upfront discount from STCs (Small-scale Technology Certificates) decreases on a set schedule. In 2026, the discount on a 6.6kW system is worth around $1,500 to $2,000. By 2030 when the scheme ends, it will be zero[1].
Installing earlier locks in a larger discount. If you are on the fence, waiting means paying more out of pocket.
Inverters Need Replacing After 10-15 Years
Your inverter is the most likely component to fail. Most string inverters come with 5 to 10 year warranties. Replacing one costs $1,000 to $2,500 depending on the brand and size. Plan for that expense in your long-term solar budget.
Solar Does Not Work During Blackouts
Standard grid-tied solar systems are required to shut down during a blackout. This prevents back-feeding power into the grid and endangering line workers. If blackout protection is important to you, you need a battery with islanding capability — which adds significant cost[2].
You Still Pay the Supply Charge
Solar reduces or eliminates your usage charges, but the daily supply charge stays. That fixed fee, typically $1.00 to $1.50 per day, covers grid connection and infrastructure. You will always have a base bill of $30-$45 per month regardless of how much solar you generate.
See if solar makes sense for your home
Upload your electricity bill and get a personalised estimate of solar payback, savings, and system size based on your actual usage.
Frequently Asked Questions
Common questions about the downsides of solar
Is solar really worth it?
For most Australian homes with good roof exposure and reasonable daytime usage, yes. But the payback depends on your electricity usage patterns, roof orientation, local climate, and the quality of your installation.
What happens when the STC scheme ends in 2030?
The Small-scale Renewable Energy Scheme ends in 2030. After that, the STC upfront discount is scheduled to end, so quotes may be higher unless lower hardware or installation costs offset the lost incentive. [1]
Do solar panels work during a blackout?
Standard grid-tied solar systems shut down during a blackout for safety reasons. To have backup power during outages, you need a battery with islanding capability or a hybrid inverter that supports off-grid operation.
How long do solar inverters last?
Most string inverters last 10 to 15 years. Some premium brands last longer, and extended warranties are available. You will almost certainly need to replace your inverter at least once during your panels' 25+ year life.
Can I get solar if my roof is shaded?
Yes, but the output will be significantly reduced. Microinverters or optimisers can help mitigate shading, but they add cost. If your roof is heavily shaded for most of the day, solar may not be financially worthwhile.
Do I still pay an electricity bill with solar?
Yes. Solar offsets usage charges but does not eliminate the daily supply charge, which is typically $1.00-$1.50 per day. You will always have at least that portion of your bill regardless of how much solar you generate.
Related guides
This guide is for informational purposes only. Solar suitability and payback depend on your specific circumstances. Consider consulting a qualified professional for personalised advice.