Calculating the cost of solar for apartments: shared versus individual
How does our solar-sharing technology, SolShare, compare in terms of cost against individual solar systems for apartments, units and townhouses?
In this article, we assess this by breaking down costs, lifetime savings, and payback periods to determine the ROI expected for each option.
Australians have some of the highest rates of residential rooftop solar in the world - around 33%!
Around 16% of Australians now live in apartments, but until recently, rooftop solar was not feasible for them.
That's why Allume created SolShare - a world-first, Australian-made technology that divides the electricity from a single rooftop solar system and shares it fairly between apartments each month.
This overcomes many of the technical, legal, and financial barriers to solar for strata, and thanks to SolShare, over 3,000 apartments are now connected to clean, affordable energy from their rooftops.
The only alternative to SolShare is to allocate an equal amount of roof space to each apartment and install individual solar systems.
But for the vast majority of apartments in Australia, SolShare will deliver a better return on investment—see the costing below!
Firstly, let's look at what impacts the lifetime cost of a solar system.
What impacts the cost of solar for apartments?
Total roof space (and therefore solar) available per apartment
Apartment blocks only have so much roof space available, impacting how many solar panels can fit onto the roof.
Average allocations of 1 – 2kW per apartment are typical. As you increase the amount of solar per tenancy, it has diminishing returns (it’s not a linear increase). For example, increasing allocation from 1-1.5kW will provide a larger benefit than an increase from 1.5-2.0kW.
One of the main benefits of SolShare versus individual systems is that it maximises the amount of solar consumed (more info below). This essentially means higher bill savings (because the energy you feed back into the grid is worth a lot less than the energy you have to buy from your retailer).
Installation costs
Installation costs vary widely depending on the height of the building, roof pitch, roof access, switchboard upgrade requirements, and more. To determine these factors, an installer will always conduct an in-person site inspection before the final quote.
Some of these costs are simplified with SolShare, such as wiring and racking, but more importantly, SolShare also shares inverters (and batteries, if relevant), which add to equipment costs.
Maintenance costs
Additional maintenance costs affect the overall return on investment of the solar system across its lifetime:
- Internet connectivity costs for each individual system (generally a sim card plan per inverter at ~$100 p/year)
- Maintenance of the individual system (annual or bi-annual checks are recommended, at ~$250 p/2 years)
- Inverter replacement (once out of warranty in a 25-year system, at ~$1500-$2500)
The costs above must be paid by each apartment with individual solar systems versus just once with SolShare.
Additionally, multiple individually owned systems on a commonly owned roof lead to complexities in ownership. For example, if one owner has their system serviced by an installer and they damage the roof, where does the liability lie?
With SolShare, the responsibility lies with the owner's corporation as a whole.
*Note that due to Victoria’s backstop mechanism, an internet connection is required to allow the apartment to obtain any exported solar credits.
Building features
Is the building fully electrified, or does it also use gas? Fully electrified apartments will see higher bill savings because electric appliances that replace gas heating, hot water, stovetops, and ovens are high-energy users.
If the building isn't electrified, will it be soon? Will electric vehicle charging be added at any stage? If so, it's safe to assume higher energy bills when doing calculations.
The age and efficiency of the appliances in each apartment will also impact solar utilisation. Upgrading to smart appliances can hugely improve solar utilisation—see more tips below!
Apartment residents' behaviour and lifestyle
It's important to consider the behaviour of the typical apartment household in question. For example, do people work from home, do they work part-time, are they retired, do they have children?
Behaviour and preferences impact the times of day we use energy, which is really important in understanding how much solar we'll consume and whether batteries might improve payback periods.
Through experience, we’ve found that the average electricity consumption of an apartment in Australia is approximately 14kWh per day, so you can use this if you don't have energy bills from residents.
Once solar is installed, residents may be able to move some heavy energy loads to the daytime, timing dishwasher cycles or pre-cooling the space during summer.
Electricity price forecasting
It is common practice to include an annual increase in electricity prices in calculations. A 4-6% increase in the year-on-year cost of electricity is a safe assumption, as this mirrors likely inflation.
Many government solar-for-apartment grants and rebates require specified payback periods, so ensure this is considered when sizing systems and assessing project feasibility.
SolShare's self-consumption rate is significantly higher
A solar system's 'self-consumption' or 'self-utilisation' rate is instrumental in calculating return on investment because it significantly impacts bill savings.
Self-consumption relates to the percentage of solar energy used by residents compared to what is sent back to the grid.
You pay your retailer a lot more to buy energy from them than they will pay you for selling it back, so the higher the self-consumption rate, the better.
According to Griffith University, the generous estimation of the average annual rate of self-consumption is 36%. That's the best-case scenario, and it typically requires behaviour change from residents.
On average, a SolShare solar system has a 50% greater self-consumption rate than individual solar systems, including microinverters.
Below is the average self-consumption range for a SolShare solar system by system size:
Partially Electrified |
1-1.25kW |
1.25-1.5KW |
1.5kW-1.75kW |
1.75-2.0kW |
---|---|---|---|---|
Partially Electrified |
40 - 70% |
30 - 65% |
25 - 60% |
25 - 60% |
Fully Electrified |
45 - 75% |
40 - 70% |
35 - 65% |
35 - 65% |
To illustrate this using a real-life example, below is a screenshot from our energy monitoring portal, SolCentre, of a SolShare apartment block in New South Wales over 1 year (from November 2023 to October 2024 inclusive):
As you can see, the utilisation rate (solar consumed divided by solar delivered) is roughly 56%, much higher than it would have been with individual systems.
Why is the self-consumption rate higher with SolShare?
With traditional solar systems (without a battery), you consume solar energy only when your household uses electrical appliances during daylight hours. The rest gets fed back into the grid, usually for a very low price—around 6c / kWh, compared with ~30c / kWh to buy energy from your retailer.
Apartment buildings with individual solar systems can only access the 2-3 panels of solar that they are connected to, unlike SolShare, where 15+ panels can be accessed at any time by a single apartment.
SolShare has more households to feed energy into at any one time, so much more of the energy it produces can be used than individual systems. Its algorithm ensures everyone gets the same amount throughout the month.
SolShare versus individual solar systems - which one is the winner?
Individual systems may be better financially for townhouses or blocks of five units or less, but shared solar provides a much more favourable return on investment for the vast majority of apartments in Australia.
Interested in solar for your apartment? Get started below!
Get a shared solar quote for your apartment!