We get asked a lot of questions and sometimes the answers just remain on the page of the article and it is hard for others to keep track of them, so we have decided to summarize some of the key questions we have faced here is a summary of answers to frequently asked questions.
Why does pricing differ so much from one quote to another?
There are a number of factors that contribute to this disparity, and most of them are fairly common sense. Consider your options of installers to fall somewhere on a line with two extremes: large, national installation companies and local installers.
As a general rule, large companies streamline their business models and essentially offer less service with better prices. They do this by ordering components in bulk, large community promotions, linking together installations whenever possible, hedging a value on their REC’s and streamlining customer service. Local options spend more time in customer service and care, but offer more moderate to premium prices and products to distinguish themselves.
A quick note on product: Your local installer is aware that they cannot compete with the large companies on the competitive prices, so he won’t usually bother with the cost-effective panelling or inverters. The larger the company, the more they have the capacity to go competitive, and in trying to hit that market-leading price this will often mean more cost-effective components. This doesn’t mean they don’t offer premium component systems as well, so if this is where your interests are, be sure to check what options are available from all avenues.
The appropriate option comes down to your individual needs and expectations. The trick is to compare what you’re getting (product and service) with what you’re paying. Check the reputation of the components online and review the size and history of the company from their website. Don’t expect hand-holding from the national installers or rock bottom low prices from the blokes next door. Do expect to be treated fairly and honestly and that the product and installers are fully licensed, accredited, tested and approved by the International Standards IEC61730, as well as either IEC61215 or IEC61646. All installers on the Solar Choice network abide by these standards in all respects.
What products are proven beyond doubt to be superior and worth premium prices for?
Impartial advice is to not believe claims that any one product is the best. The vast majority of testing is subjective and the reality is that no panel has been tested where you are looking to install it; on your property.
i.e. Claim: ˜Panel X is the most efficient panel on the market’
- Conducted at Latitude -31.802893, Longitude,146.777344;
- Operating temperature 35°C;
- ABC brand inverter;
- Pitch of 25°;
- Azimuth of 65°.
The only way that a panel or inverter brand becomes highly regarded is through decades of success on a technical and practical level. The brands that hold reputations such as this can be identified by speaking with your solar broker, or carrying out some quick diligent research on the internet.
As far as products to be avoided, so long as those international standards are in place and the product passed for use in Australia then you’ve done as much as is expected from a residential customer. Find the system that suits your budget and remember the diligent research that Solar Choice has carried out on all installers active on our network.
n.b. If you’re looking at commercial or industrial applications where a more in-depth and long term analysis of product is recommended, then our commercial tender managers can be contacted by placing an enquiry on our website via the standard sign-up process.
Why does the Solar Credits amount change from installer to installer?
The Solar Credits Discount Scheme is based on the total value accrued for the Renewable Energy Certificates (REC’s) generated for the project. Whilst the number of RECs stays the same from installer to installer for a project, the total value for the amount of REC’s alters based on what price they are sold for.
The RECs have a market value, but this fluctuates based on market trends. In addition to this, a number of installers, usually large national companies, trade their RECs via hedged price agreements with buyers, so they can actually sell their RECs for better than market rates. This is because they install so many more systems and obtain many more RECs, therefore exercising greater bargaining power on the market. These agreements are usually held in discretion, so don’t be surprised by the often confusing differences or lack of information disclosed by installers about their REC value.
For example: A 1.5kW system installed in Sydney (postcode-2000) generates 155 RECs.
- A local installer’s quote, using the current market rate of $36 per REC, offers a Solar Credits Discount of $5,580.
- A state-wide installer quotes, using their hedged price of $38 per REC, thus offering a Solar Credits Discount of $5,890.
- A national installer quotes, using their discrete hedged price of $40 per REC, and thus offering a Solar Credits Discount of $6,200.
Is pricing going to increase or decrease in the near/distant future?
There are two different sides to this story, one much more persuasive than the other.
The argument for decreasing prices would highlight increased efficiency of trade lines into the country, component technology developing and reducing in price, installer competitiveness growing and REC value’s climbing.
The opposing argument needs only one of two points to trump all of the above. Basically, have no doubts that government incentives will decrease. This will mean more outlay, less return and less choice.
The Office of the Renewable Energy Regulator (ORER) moderates the discount schemes and ensures that the pricing remains competitive. They have the power to alter the discount and make it less effective when they see fit to ensure that pricing never becomes too cheap. They are considering a reduction in the number of RECs generated for residential installations before the end of 2011 in line with this.
In addition, the state governments all review the generosity of their feed-in tariffs and reduce them as time goes by in order to slowly ease of the pressure on energy wholesalers and retailers. As both of these incentives decrease in their value, prices will remain at least as expensive and more importantly, systems will earn less via a reduced feed-in tariff over their lifetime.
What is the difference between Monocrystalline, Polycrystalline and Thin-Film panels?
Monocrystalline will be completely knocked out by shade in most instances, and takes up about 8 square meters per 1kW. Polycrystalline is only slightly less efficient and usually cheaper so it can be a great option for a rounded system. Thin film will only suffer marginal and isolated losses to shade, and will take up about 12sqm per 1kW (50% more). Remember that if your panel is less efficient you just need more of them, so if your roof space is large enough don’t let these differences guide your decision.
What is the point of having a larger capacity inverter?
A larger inverter allows the system to integrate additional panels at a later stage. Therefore, larger inverters are only used for upgradeability purposes.
However, inverters work best when they are interpreting a voltage that is around their nominal output. The nominal output of an inverter is the figure that is detailed to you in quotes and in Solar Choice quote comparisons. Quite simply, it is the kW measurement of when the inverter is working at its perfect rate. If the output of the system (the total kW when adding all of the panels together) is far from the nominal output, the inverter will not work as efficiently.
From this, two deductions can be drawn. One, do not install a system where your output is much less than 75% of your inverters nominal output. Two, due to efficiency losses from a myriad of factors (y) such as dust build-up, cloud, not perfect orientation/tilt of the panels, your (x)kW system is actually going to be producing on average (x “ y)kWh a day. So the best system for your inverter actually has slightly more of a capacity to the panels than the nominal output of the inverter. i.e. a 2.2kW system with 2kW inverter. 10% is a wise maximum to consider along these lines.
How much roof space will my solar energy system occupy?
For flush mounted systems:
- Monocrystalline = 8 square meters per 1KW (10kW = 80sqm)
- Multicrystalline (Polycrystalline) = 8.5 square meters per 1kW (10kW = 85sqm)
- Thin-Film Amorphous = 12 square meters per 1kW (10kW = 120sqm)
For ground mounted or tilt framed system the difference is considerable, so better to enquire with us directly upon the specifics. Email email@example.com or call 1800 78 72 73.
How do the REC’s work, and is anything required from me to receive the Solar Credits Discount?
Every year the biggest 100 polluters in Australia must account for their immense emissions by handing over a certain number of REC’s to the government. This number is proportional to the amount of pollution they produce. The REC’s are generated every time someone installs a renewable energy source in the country. The REC market provides an avenue through which the holders of these RECs can eventually sell them to the polluters to compensate themself for the price of installing the renewable energy source.
All of the complexity regarding REC market value, installer trading and hedged pricing agreements can be condensed into this one explanation: sell your RECs to your installer for a reasonable price and consider it as the polluters chipping in to pay for your solar/wind/hydro systems installation. Do this by following your installers’ instructions and filling out the forms they provide you. That is all you need to do to claim the Solar Credits Discount.
Why is a tiled roof or a double storey installation more expensive?
Colourbond and steel rooves are simple for solar energy installations. The installers can simply screw the racking straight into the material without compromising water or structural integrity. However, tiles are brittle and would break under similar treatment. Installers therefore must screw racking into the material underneath the tiles and replace them carefully to preserve the roof’s reliability. This should cost you between $100 to $200 and is a completely understandable and justifiable expense.
Double storey rooves require extra safety equipment and precautions to be used by installers. This is for OH&S reasons primarily, so having easy access does not affect this at all. It should usually cost $200-$400 for this charge, and again, it is completely justifiable.
How many kWh’s will my system produce per day?
Across the latitudinal lines in Australia and on average:
- Brisbane and above: 5kWh per 1kW system per day
- Between Brisbane and Adelaide, including Perth and Sydney: 4.5kWh per 1kW per day
- Melbourne and Hobart: 4kWh per 1kW per day
This is the most helpful and accurate guide to the number of kWh per 1kW system installed we have found. It assumes the system is between 80%-100% efficiently positioned:
What do the different warranties (performance, manufacturing and installation) encompass?
Performance warranty is 25 years minimum for approved systems and only applies to the panels. It refers specifically to the gradual degradation of the solar cells in the panel. This usually accounts for a 10% drop in output due to this degradation in the first 10 years, and a further 15% in the latter 15 years. Some panels perform up and above this standard.
Warranty on manufacturing applies to both the panels and the inverter and involves any aspect of the manufacturing that if performed incorrectly could affect performance. Imagine for instance that one of the connector ports for the leads between the panels was not screwed in properly by the robot/manufacturer, and this resulted in a loss of output from the system. This would be a typical manufacturer’s warranty issue. Minimum for panels and inverters is usually 5 years.
Installers warranty applies to any aspect of the installation that if incorrectly performed would result in performance losses. If an installer dropped a panel off the ladder when installing the system for instance and this damaged the framing affecting performance, this would be an installer’s warranty issue.
As you might imagine, the vast majority of issues regarding both manufacturing and installer’s warranties would become obvious within the first year of the systems performance. It is for these reasons we don’t recommend customers becoming too concerned about the small differences in these warranties when deciding on their appropriate solar quote. Consider the warranties, but again don’t let them drive your decision.
What has to happen with the relevant electricity meter upgrades, and who is responsible for this?
This depends primarily on your solar installer and their integration of this process into their business models. Most installers will assist you with the forms and guide you through the process, but once your system is approved by your wholesaler you will be responsible for booking in the meter install with a level 2 qualified electrician. This is not an overly painful process and will cost you from $250 to $500, depending on the complexity of your meter box. On the other hand, some installers will take care of this whole process for an extra fee of the same amount. Finally, we have installers that include the price in their quote, and whilst they are rare, the extra service can be a load of your mind.
Do any of the installers offer finance?
Yes, simply ask your solar broker about which ones and what sort of arrangements they provide.
Are the economic benefits of the system taxable?
For all residential installation the system is not taxable. The only aspect of the systems operation that must be claimed is if you are sent money from your provider for surplus and are claiming a pension or Centrelink allowance of any kind.
For all commercial and industrial installations that involve installing a system on a business, every aspect of the system is taxable:
- The GST can be claimed back for the system, further reducing the cost;
- The income earned from the system must be claimed
- The system can be depreciated over 10-20 years depending on the outstanding ATO ruling.
How much money will my system make me? What calculations are used to work this out?
It all comes down to the feed-in tariff that the system is connected under. This rate differs from one state to another and also via the electricity providers. The big difference is between the Gross states and the Net states and the rate being paid.
Gross States: Simply multiply the amount of energy that is expected to be generated by the system per day by the rate your provider is paying and you will have your average daily income.
Example of a 2kW system installed on home in NSW
Assumptions: AGL is the electricity provider, currently paying 8c over the 60c gross rate minimum. Usage of the property does not affect return as this is a gross state.
2kW x 4.5kWh per 1kw per day = 9kWh generated from solar each day
9kWh x 68c (rate paid under gross tariff by AGL) = $6.12 per day
Net States: This is more complicated. You must establish how much energy is going to be generated by the system, minus off the daylight hour energy usage, then multiply the surplus by the tariff rate. The units from the solar system used up by the property still save those units from being purchased from the grid, so they add marginally to your economics
Example of a 3kw system installed on home in SA
Assumptions: The house consumes 5kWh over the sunlight hours each day. Origin is the electricity provider, currently paying 6c over the 44c net rate minimum.
3kW x 4.5kWh per 1kW per day = 13.5kWh generated from solar each day
13.5kWh “ 5kWh = 8.5kWh in surplus, and 5kWh saved from being purchased from the grid
8.5kWh x 50c (rate paid under net tariff by Origins) = $4.25 per day and
5kWh x 18c (Market rate for electricity purchased from grid) = $0.90
Total earnings from system per day: $5.15
Are the Australian, German or Japanese panels justifiably more expensive than Chinese panels?
At the end of the day, there are differences between panels. The international standards keep everything in the same ballpark, but panels and inverters will still outperform others in time. Take the stress off yourself and contact a Solar Choice broker if this is one of your more pressing matters. Think about your priorities, identify them, email us (firstname.lastname@example.org) and let us make a suggestion that is appropriate for your project. It’s that easy.
How much efficiency do I lose without tilt frames?
You will lose between 15-30% of total output each day. This amount is significant, which is why tilt frames or alternative flat-roof designed systems are recommended. Remember that most city councils are far stricter on the need for Development Applications when panels are not flush mounted to roofs. If you have a flat roof, contact us and we will run an analysis on whether tilt frames or flat-roof designed options suit your project more appropriately.
Are panels hail proof?
All panels that hold the international standards (which they all do in Australia) have been tested to hail and impact damage. A one in a thousand year event will still damage them, but the standard hail storm has been tested against and the panels hold up fine.
Does the inverter need to be near the meter?
It is recommended, however, the inverter will be positioned on site in the most appropriate place. This may be a garage, laundry or meter room. The distance between inverter and meter should not exceed 20 meters to avoid transmission losses.
What happens if one of my panels is in shade?
It will stop working. It may knock out all other panels in the ˜string’ as well. Depending on the size of your system, this can mean huge losses in output. Always avoid shading completely, and if you cannot, contact your Solar Choice Broker for advice. Thin-film panels are more shade tolerant, but the system will face losses regardless. If you have only got a heavily shaded area, just like if you’ve only got a South facing roof area, then solar energy is not recommended for you.
Will it work if I have panels on more than one side of the roof, and how?
Usually it is only recommended to split the system up over multiple roof areas if you have an inverter that can read the arrays separately, all aspects and tilts are identical, and none of the areas are subject to shade. Inverters that have Dual Tracking (Dual MPPT inputs) allow panels to be split over two completely different areas; however these are usually more expensive. Please note that MPPT Tracking is not Dual Tracking, and most inverters had one MPPT Tracking listed on their technical specifications. Only a Dual-input MPPT inverter can split the system independently.
Written by Jarrah Harburn
Senior Solar Energy Broker
© 2010 Solar Choice Pty Ltd