Over 2 million households in Australia are now living with solar panels on their roof and enjoying low power bills and a smaller carbon footprint. Find out what it's all about.

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The basics of Solar

There are two main components of a solar systems – the solar panels and an inverter. Solar panels are usually installed on your roof and convert sunlight in the DC energy through the photovoltaic effect. The inverter converts the DC energy into AC energy that can be used in your home.

In a grid-connected solar system the solar power is used instantly to power the houses appliances and any surplus can be sold back into the grid for a ‘solar feed in tariff’.

Some homeowners also opt to install a battery which can store the surplus energy to be used in the home later, enabling the homes to become mostly self-sufficient. Currently batteries are only added in about 1 in 10 solar systems due to high battery costs.

How Solar saves you money

Solar power can save you money on your energy bills in 2 ways:

• 1. Reducing the amount of power you buy from your electricity retailer The main way in which solar power will reduce your bills is by offsetting the amount of electricity you need to buy from your selected electricity retailer. Typically this will cost between 15-40c per kWh depending on where you are in Australia. A grid-connected solar system will automatically prioritise solar energy for any power needs and will harmoniously supply any remaining energy needs from the grid. A typical household may expect to offset 30% to 70% of their energy usage with solar panels depending on how much of their electricity usage is consumed during daylight hours and how large a system they choose to install. Note that without batteries you can never get to 100%.
• 2. Selling excess power for a 'feed in tariff' The amount of energy generated by your solar panel system is dictated by the sun, not your energy consumption. This means at times there will be surplus energy created which can be sold back to the grid for a rate called a 'feed in tariff'. These feed in tariffs vary by state and which electricity retailer (e.g. AGL, Origin etc.) you are with. Typically, you can usually find a feed in tariff between 3-12c per kWh. Your ability to access a feed in tariff is usually limited to a maximum solar system size – for a full explanation of what is possible state by state read this guide.

What size system should you get

The most common system size in Australia is 6.6kW of solar panels which can be matched with a 5kW inverter. This fits within most networks size limits for single-phase connections and provides sufficient power to cover most households’ daytime energy requirements.

To give you an idea on how much solar power your solar system will produce per day please refer to the below table From the Clean Energy Council:

Average Daily Solar Power Production
City	6.6kW Solar System	10kW Solar System
Adelaide	28 kWh	42 kWh
Brisbane	28 kWh	42 kWh
Canberra	28 kWh	43 kWh
Darwin	29 kWh	44 kWh
Hobart	23 kWh	35 kWh
Melbourne	24 kWh	36 kWh
Perth	29 kWh	44 kWh
Sydney	26 kWh	39 kWh

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City	Average price for 6.6kW solar system	Price of electricity ($/kWh)	Solar feed-in tariff ($/kWh)	Payback period (years)	Internal rate of return
Adelaide	$4,960	$0.31	$0.10	2.5	40%
Brisbane	$4,960	$0.16	$0.05	4.7	21%
Canberra	$5,200	$0.20	$0.10	3.7	27%
Darwin	$9,330	$0.26	$0.08	5.1	19%
Hobart	$6,940	$0.27	$0.09	4.4	23%
Melbourne	$5,680	$0.28	$0.12	3.2	32%
Perth	$4,030	$0.29	$0.07	2.2	46%
Sydney	$4,920	$0.21	$0.05	3.9	26%

Assumptions:

• Electricity rates & feed in tariffs based on middle ground of what’s available
• Assumed that 50% of Solar Energy is used by the home (self-consumption rate)
• Panels are tilted to the North at 30% pitch
• Inflation at 2.5% and a 5% discount rate

Selecting a ‘good’ solar installer

There are over 6,000 solar companies in Australia ranging from shonky cowboys chasing the rebate to honest hardworking installers with proven track records.

Solar systems are designed to last for 25 years so it is worth doing the extra research to ensure you are getting a good quality system and getting installed by a qualified electrician who is not going to cut any corners to save money.

We recommend using a company like Solar Choice who have a vetted list of solar installers across Australia that they have been refining for over 13 years. Their comparison platform enables you to transparently understand the background on each company, the products they are providing and reviews from previous projects.

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