Solar Choice’s Complete 8-Point Guide to Solar

We’ve put together this 8-point guide to help you educate yourself about home solar & battery storage systems before you go ahead an make a decision about whether to proceed – and with whom.

On This Page:
1 1. Who can benefit from going solar?
2 2. Solar PV vs Solar PV and Battery Storage
3 3. Choosing the right Solar PV system size
4 4. Understanding solar ‘rebates’/incentives & feed-in tariffs
5 5. Comparing products, quotes and installers
6 6. Home battery storage
7 7. System monitoring & energy management
8 8. Selecting the right electricity plan
9 Frequently asked questions (FAQ)

 

1. Who can benefit from going solar?

These days, solar panels are a commonsense investment decision for virtually any Australian home with a roof and a bit of daytime electricity usage. In particular, rooftop solar is best for households where:

  • The home is stand-alone house and the occupant is also the owner. If you own the roof above your head, you call the shots about what can go up there. If you’re renting, on the other hand, you’ll have to negotiate with your landlord about having a system installed – and how to split the benefits. If you own a flat in a strata building, you’ll need to go through the body corporate and determine how the benefits could be split among the units – if at all.
  • There is ample, unshaded roof space that faces the sun. As long as there is no major shade cast on you roof from nearby buildings and trees, solar will probably work for your home. In the southern hemisphere, the best roof for solar is one that faces due north, but east and west-facing roofs are also viable options. In a pinch, installing solar on an unshaded southeast or southwest-facing roof may even be worthwhile, provided the tilt angle is not too steep and that your latitude is north of 30 degrees.
  • There is energy consumed during daylight hours. You’ll get the most benefit from a solar panel system by consuming the solar energy that it produces directly, which means running appliances while the sun is shining. As a general rule, you’ll want to consume at least 30% of the energy that your system produces. (Note that not all solar panel systems come equipped with batteries.)
  • The owners know what to expect from a solar system. Despite what some salespeople may say, it is virtually impossible to completely eliminate your energy bill with solar – even if you add batteries. That being said, it is possible to greatly reduce your energy costs, and solar panels promise very attractive returns and payback periods as short as 3 years in many places. Compare that to an expected working life of 25+ years.

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2. Solar PV vs Solar PV and Battery Storage

If you know that your home is good for solar, the next thing to consider is the type of system that you’d like to have installed. Roughly speaking, there are three main solar options for Australian residences:

  • Solar photovoltaic (PV) panel system without batteries. This type of system is by far the most common in Australia. Solar PV panels convert sunlight into electricity which can be used to run appliances – thereby reducing the amount of energy that needs to be purchased from the grid. Any excess solar energy will automatically flow into the grid, where it will earn the owner (small) credits on their energy bill.
  • Solar PV system with batteries (sometimes called a ‘hybrid’ system). Roughly 1 in 8 solar PV installations will include a battery storage device, and this proportion is expected to dramatically increase once battery prices fall.  Any solar energy that is not consumed by the home as it is generated will be used to charge the battery bank until it is full – after which point it will flow into the grid to accrue solar feed-in credits. You still maintain a connection to the grid and can draw power whenever necessary, so the battery can be as small as you like (or can afford). Keep in mind that not all solar & battery systems will provide you with backup power in the event of a grid outage – you’ll need to confirm with the company that sells you the system whether blackout protection functionality is included. Typically speaking it is not sensible to go completely off-grid, unless you are in a remote area with low quality power supplied.

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3. Choosing the right Solar PV system size

Although you may think of your solar system size in terms of the number of panels, different panel makes and models have varying energy generation capacity. The most commonly used measure of solar system capacity is ‘kilowatts’ (kW), and a standard 1.7m2 solar panel could have anywhere between 250W and 400W of capacity. This means that 1kW of solar capacity will consist of between 3-4 panels and take up about 4.2m2 – 6.8m2 of space on your roof.

Available roof space

The first consideration for selecting the right solar system size is the amount of unshaded roof space that you have available. Most solar PV systems installed in Australia these days are between 3kW and 10kW – but the most popular by far is about 5kW. The table below provides a rough guide as to the area that a range of popular solar system sizes could require, as well as the number of panels that they might consist of.

   Approx number of panels  Approx area required (m2)
1kW 3-4 5-7
 2kW  6-8 10-15
 3kW  9-12  15-20
 4kW  12-16  20-27
 5kW  15-20  25-35
 10kW  30-40  50-70

 

Your energy consumption levels & habits

The second consideration is how much energy you use (usually discussed in kilowatt-hours, kWh) and when you use it. Solar is a great fit for virtually all Australian homes with some unshaded roof space, but it’s especially worthwhile if your energy consumption needs are moderate to high (e.g. 20kWh – 30kWh per day).

Solar works best for homes where there is some energy usage during daylight hours; every unit of solar energy that your home consumes directly is one less unit that you have to purchase from the grid at the retail rate. Excess solar energy will still deliver you some value (in the form of a solar feed-in tariff credit on your electricity bill), but the feed-in rate is generally significantly lower than the price of retail electricity, so you’re better off putting the solar energy to good use within your home as much as possible.

Whether you’re likely to be consuming energy during daylight hours (when solar energy is available) depends primarily on if there are people at home during the day using energy. There are essentially five common residential electricity consumption patterns in Australia:

  • ‘Double hump’ – Families with school-age children
  • ‘Evening peak’ – Households without school-age children
  • ‘High day, higher evenings’ – Households with infants & preschoolers
  • ‘Day focus’ – Retirees & those who work from home
  • ‘Night focus’ – Mainly night shift workers

The table below provides a rough idea of how these different patterns tend to play out over the course of the day.

Electricity consumption patterns

As a general rule, we recommend that you choose a system size where you will ‘naturally’ self-consume at least 30% of the electricity produce (i.e. with no extra effort on your part). By doing this, you should be able to strike a balance between good financial returns and room to grow if your electricity needs become higher in the future – or if you want to add battery storage at some point.

The table below contains very rough solar self-consumption ratio estimates for a range of popular solar system sizes and energy consumption levels for the ‘double peak’ consumption pattern. If the cell is red, the system is probably too large (or better suited for having batteries). If the cell is green, the system size is likely have a favourable payback period (keeping in mind that the higher the percentage is, the better).

 Your daily energy consumption Solar system size
2kW 3kW 5kW 7kW 10kW
5-10kWh 30% 25% 17% 13% 9%
11-15kWh 48% 38% 26% 20% 15%
16-20kWh 57% 46% 34% 26% 20%
21-25kWh 66% 53% 40% 32% 24%
26-30kWh 73% 59% 44% 37% 28%
31-40kWh 82% 67% 50% 42% 34%

Remember: The table above is a highly generalised, indicative guide; it does not take into account your location or the tilt & orientation of your roof – not to consider system prices or financial details like payback period.

Strategies for maximising solar self-consumption

The percentage of the total amount of solar energy that you consume during the day (‘self-consumption ratio’) is not fixed. In fact, the more aware you are of the amount of solar energy that you have available, the more likely you are to endeavour to utilise it while it is available.

The table below contains some of the most popular strategies for maximising your solar self-consumption ratio.

Solar self-consumption option comparison matrix Necessary for solar self-consumption? Initial effort required (shopping around for best deal) Ongoing effort required Effectiveness at maximising solar self-consumption Potential for maximising savings Cost
Set up timers No Low Medium to high (timers should be recalibrated seasonally) Low to medium Medium Low
Hot water diverter No Medium None Medium to high High $700-$1500
Energy Management System No Medium Low to medium Medium to high High $500-$1500
Battery storage system No Medium to high (lots of options, big investment) Low to none High High $1,500-$2,500 per kWh of capacity

Resources

8kW solar system payback and ROI snapshotWorking out the details for yourself

The tables and the discussion above do not touch on solar panel system pricing, payback periods or investment-worthiness – not to mention the economics of home battery storage. Suffice to say that solar panels are affordable and a good investment for most Australian homes, especially with retail electricity prices at their current high levels.

The resources below will help you to get a good idea of whether solar (or batteries) are worth the investment for you.

Resources:

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4. Understanding solar ‘rebates’/incentives & feed-in tariffs

Federal incentives – the STC ‘discount’

Australia is home to some of the lowest residential solar PV system prices in the world, thanks in large part to the government incentives available through the federal Renewable Energy Target (RET). The RET provides a ‘discount’ (sometimes erroneously referred to as a ‘rebate) on the up-front cost of installing a solar panel system up to 100kW in capacity. You (as the purchaser) are not required to claim this incentive – it is applied directly to the out-of-pocket purchase cost of the system.

The actual mechanism behind this federal incentive is a bit complicated. Here’s what you need to know in a nutshell:

  • As long as you have a solar system installed by a Clean Energy Council (CEC) accredited solar installer using CEC-accredited accredited components (panels and inverters), it will be eligible to generate ‘small-scale technology certificates’ (STCs). STCs are in essence a type of renewable energy currency, which each certificate theoretically representing one megawatt-hour (MWh) of renewable energy.
  • Depending on the size of your system, the sunniness of your location and the year that you install the system, the number of STCs generated will vary.
  • The larger the system, the more STCs it is eligible to create.
  • There are four STC ‘zones’ in Australia, with Zone 1 (which includes Darwin) being the sunniest and Zone 4 (which includes Tasmania and parts of Victoria) being the least sunny.
  • There is a ‘deeming period’ which determines the number of years for which STCs can be created. The deeming period decreases each year from 2017 – e.g. for 2017, the deeming period is 14 years, while for 2018 it will be 13 years, etc.
  • ‘Liable entities’ under the RET (mainly electricity retailers and big polluters) are required to surrender a certain number of STCs each year or face penalties. This creates a market for STCs, and STC prices (and the discount amount for you as the purchaser) fluctuate accordingly. (Greenbank Environmental is one trading company that publishes current STC prices.)
  • When a company installs your solar system, they will generally claim the STCs as their own and pass the value through to you in the form of the discount. The total value of the STC discount will generally be outlined on the quote, invoice and/or contract for the system.

Resources:

Solar feed-in tariffs

A feed-in tariff is the rate that you are paid (usually in the form of a bill credit) for solar electricity that you send into the grid. In most of Australia once generous, government-backed solar feed-in incentives have given way to less attractive, unsubsidised, market-based feed-in programs. Where no generous feed-in tariff exists, solar self-consumption is the best way to save money (as explained above), but feed-in credits are still important in making the economics of solar stack up by providing some financial benefit for the solar energy that you’re not able to use yourself.

In most states where the retail electricity market has been deregulated and opened up to market competition, there is no longer a mandatory minimum feed-in tariff, which means your electricity retailer can pay you as little as 0c/kWh. Of course, the savvy retailers who wish to attract solar customers will offer something – and most retailers do. But unfortunately, this competitive element also means that certain retailers can attract solar customers simply by offering a higher feed-in tariff while adding on costs elsewhere. We recommend looking for a well-rounded retailer who will deliver the best possible package in total (see section 8 below).

Resources:

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5. Comparing products, quotes and installers

Once you’ve got a good idea of what size system you need and what the benefits are, you’ll want to get a good understanding of what products are available from which companies – and how they stack up against one another.

Solar system components

Here it’s helpful to understand that there are two key components to a solar power system: The solar panels themselves, and the inverter(s).

In Australia, all solar panels have a standard performance warranty of 25 years – specifically, that their capacity should not degrade lower than 80% of what it was when the panels were first installed. Solar panels have no internal moving parts and are generally quite reliable with little to no maintenance.

Inverters, on the other hand, are the ‘workhorse’ of the system, converting the DC electricity produced by the solar panels into appliance-friendly AC electricity, used by your home. As such, their life spans tend to be significantly shorter – with 5 years being the shortest warranty duration you’ll generally find (although many manufacturers offer extended warranties for 10 years).

Most residential solar systems have a single, central, ‘string’ inverter which handles power inputs from all of the panels on the roof, but for roofs with multiple angles or where shading is an issue, microinverters may prove to the the more viable option. While central inverters take the inputs from one or two ‘strings’ of solar panels and do perform well with even only moderate amounts of shading, microinverters allow each panel to operate independently of one another, which means that solar system power output is not as badly compromised when a small number of panels are shaded. Power optimisers have many of the same benefits of microinverters but achieve them through a different approach.

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As a brokerage & advice service for rooftop solar & batteries, Solar Choice works with a network of over 100 installers around Australia to deliver free & instant Quote Comparisons to our customer. All Quote Comparisons include product & pricing information in an easy-to-compare, apples-to-apples format, along with information about each installers’ history in the industry.

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6. Home battery storage

Interest levels in home energy storage have skyrocketed in recent years, and more and more Aussie households are deciding that batteries are worth the investment. As battery prices come down and electricity prices continue to go up, the value proposition of being able to store your excess solar energy only increases. (Unlike solar power, there is no federal incentive for battery storage in Australia.)

Choosing the right battery product for your home

There are now dozens of home battery storage system products available in Australia, each with their own specifications and bells & whistles. Here’s are the main things you need to know about the battery products on offer in Australia at the moment:

  • Most of the batteries for grid-connected system use a lithium-based chemistry; the most popular are lithium-iron phosphate (LiFePO4) and lithium manganese nickel cobalt oxide (NMC)
  • Lead-type batteries are also common, and are still the go-to solution for off-grid systems thanks to their relative affordability and long history of use in off-grid applications
  • Most lithium products have a warrantied operational life of 10 years; warranties factor in inevitable battery capacity degradation (which varies by product)
  • Battery products may come in the form of stand-alone battery banks (which require a battery-compatible inverter to integrate with a home & solar PV system) or as an all-in-one battery system with its own built-in inverter/charger
  • Battery systems still vary significantly in price even for similarly sized units – in the range of $800-$2,000 per kilowatt-hour (kWh) of storage capacity (or ~$4,000 – $10,000) depending on the product and manufacturer and the quality of their products
  • No battery storage product currently available offers better returns than a solar PV system on its own

How batteries can reduce your power bills

There are essentially three ways that batteries help to reduce power bills:

  1. Solar charging – using excess solar energy to ‘fill up’ the battery bank for later use, thus reducing your need to draw energy from the grid; this is the primary way that Australian homes will save money with batteries
  2. Pre-charging with the grid – using cheap, off-peak grid electricity to charge the battery for use during more expensive ‘peak’ and ‘shoulder’ pricing times (only an option for households on time of use / flexible billing arrangements)
  3. Selective export – sending stored battery energy into the grid when called upon to do so in order to receive a ‘premium’ payment (still a relatively uncommon option, only available with certain battery products and electricity retailers)

Here are some things to keep in mind about the financial returns of a battery storage system:

  • Generally speaking, customers on a time-of-use billing arrangement will save more with batteries – but then again you might save more in the first place by simply switching to a flat rate or ‘block’ electricity plan instead
  • A solar system on its own will offer a shorter payback period and better returns than a solar-plus-storage system
  • At present, retrofitting a battery bank to a ‘battery ready’ solar PV system is the best scenario for a battery investment (that is, if you’re replacing the inverter & adding panels to an existing solar system

Battery system sizing

Because battery prices are still high compared to the price of solar PV systems, it’s key to ensure that you are clear about what you hope to achieve by having batteries installed. Most people who are interested in energy storage are interested in two things:

  • Maximising electricity bill savings, and
  • Energy independence

To some extent, these two goals go hand in hand: having a larger battery bank (if coupled with the right solar system size) will allow you to bring your electricity consumption charges down to almost nothing (although you’ll still pay your daily, fixed ‘supply’ charge).

But keep in mind that the more ‘surplus’ battery storage capacity you have, the less you will be utilising the full capacity of your battery bank on a daily basis, which means the less value you’ll be getting for a more expensive system – resulting in longer payback periods and less attractive returns.

If you’re looking at batteries purely as an investment, the best strategy is to install a battery bank large enough to be useful but small enough to be utilised often and to its fullest capacity. Once you’ve worked out which battery bank size is best for your circumstances, you’ll be in a good position to compare deals – even if you ultimately choose a larger or smaller system based on comparative value.

Battery system sizing table (rough guide)

The table below provides a rough guide to battery bank sizing for both maximising battery utilisation (and possibly financial returns) as well as for energy independence. It takes into account both the size of your solar PV system and the amount of energy that you consume during the day.

(Please note that this table is a guide only. It’s also worth stating that we don’t generally recommend batteries for solar systems under 5kW in capacity unless you’re really, really keen on energy independence, have low energy consumption levels and know what you’re getting into.)

Your daily energy consumption
Largest recommended battery size for…
 Solar system size
2kW 3kW 5kW 7kW 10kW
5-10kWh
 Maximising battery utilisation: 5kWh 4kWh 4kWh 4kWh 4kWh
Maximising energy independence: – 22kWh (3 days of energy autonomy) 35kWh (5 days of energy autonomy) 35kWh (5 days of energy autonomy) 35kWh (5 days of energy autonomy)
11-15kWh
 Maximising battery utilisation: 4kWh 7kWh 9kWh 8kWh 8kWh
Maximising energy independence: – – 40kWh (3 days of energy autonomy) 65kWh (5 days of energy autonomy) 65kWh (5 days of energy autonomy)
16-20kWh
 Maximising battery utilisation: 3kWh 6kWh 13kWh 12kWh 11kWh
Maximising energy independence: – – – 55kWh (3 days of energy autonomy) 90kWh (5 days of energy autonomy)
21-25kWh
 Maximising battery utilisation: 2kWh 5kWh 12kWh 16kWh 15kWh
Maximising energy independence: – – – 23kWh (0.77 days of blackout protection) 70kWh (3 days of energy autonomy)
26-30kWh
 Maximising battery utilisation: 1kWh 4kWh 11kWh 18kWh 18kWh
Maximising energy independence: – – – – 40kWh (1.5 days of blackout protection)
31-40kWh
 Maximising battery utilisation: – 3kWh 10kWh 17kWh 23kWh
Maximising energy independence: – – – – 27kWh (0.7 days of blackout protection)

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Solar Analytics chart

7. System monitoring & energy management

In the past, energy monitoring and management were not a major consideration for households going solar – in fact, the vast majority of solar systems currently installed in Australia have no monitoring system attached. These days, however, we highly recommend that you have some kind of monitoring technology for your solar system – as the comparison goes, would you purchase a car without a dashboard?

Benefits of energy monitoring/management

Monitoring & management systems almost always come with an app-based or web-based monitoring portal. They are relatively affordable and extraordinarily useful for a range of reasons, including:

  • Help you to get better value out of your solar PV system & batteries by allowing you to see how your using energy during the day – and adjust your behaviour accordingly
  • Tip you off as to whether your system is functioning as it should (e.g. a malfunction or a new shading issue)
  • Allow you to analyse long-term trends in your energy usage & yields – putting you into a better position to decide on whether to expand your existing solar system, add batteries, etc
  • Let the company who previously installed or currently maintains your system to troubleshoot (and possibly fix) problems without a site visit
  • Enable you to remotely control devices within your home – either manually (switching them on and off via an app/web portal), by putting them on timers, or through ‘intelligent’ automation

There are many monitoring & management options available, and they come in a range of forms. For example:

  • Third-party systems that ‘bolt on’ to your meter board
  • Embedded systems that come included with an inverter or battery storage system
  • Optional, bolt-on devices that can be installed in conjunction with an inverter or battery system of the same brand
  • Digital ‘smart meters’ that take the place of analogue electricity meters; whether you’ll have instant access to the data collected by a smart meter depends on your electricity retailer (who may only be able to deliver it in more cumbersome, historic or paper form)

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8. Selecting the right electricity plan

Once you’ve had your solar PV system installed, you’ll want to ensure you’re on the best electricity plan possible to maximise the benefits of having a solar system. Your instinct might be to search for the highest solar feed-in tariff available, but it’s better to look at each plan as a whole, as a retail electricity plan is made up of a number of different elements. The most comment elements you’ll see on an electricity bill are:

  • Consumption / usage charges – in cents per kilowatt-hour
    • If you’re on a flat rate electricity plan, this rate will be the same regardless of when you consume energy during the day
    • If you’re on a ‘block‘ tariff plan, the rate you pay for each unity will change depending on how many units you consume per day/month/quarter – sometimes the rate will go higher, sometimes lower (depending on the plan & retailer)
    • If you’re on a time of use (TOU) plan, you’ll be charged different rates per kWh depending on when you consume the energy – e.g. lower, ‘off-peak’ rates at 3am, slightly higher ‘shoulder’ rates around 8am and the most expensive ‘peak’ rates around 8pm.
  • Supply / connection charges – a fixed daily fee that you pay for being connected to the grid, regardless of whether you draw electricity from the grid or not
  • Solar feed-in credits – in cents per kilowatt-hour, the rate you are paid for solar energy that you send into the grid
  • Demand charges – a fee you are charged for putting ‘pressure’ on the grid by drawing over a certain amount at a time (note that demand charges are still uncommon for residential customers)
  • Applicable discounts – usually a percentage of consumption and supply charges, awarded for paying on time and/or online

Looking at all of these in total, it’s clear that any gains made in solar feed-in tariff revenues could easily be erased by increases to other elements of the bill. The key takeaway here is that you shouldn’t be baited by a high feed-in tariff into signing up for an otherwise overall less beneficial electricity plan.

Fortunately there are resources and tools available to help you navigate the treacherous waters of Australia’s competitive retail electricity markets (i.e. southeastern Queensland and all of New South Wales, South Australia, Victoria and the ACT) – we’ve included them below.

If you’re in Western Australia or northern Queensland (Ergon network), on the other hand, you only have one choice of retailer/utility. If you’re a Northern Territory resident, you should talk to Powerwater about your electricity plan options.

 

Quick links to other useful articles & resources

Learn about solar in your (nearest) capital city:

Adelaide | Brisbane | Canberra | Darwin | Hobart | Melbourne | Perth | Sydney

Popular solar system sizes:

1.5kW | 2kW | 3kW | 4kW | 5kW | 6kW | 7kW | 8kW | 9kW | 10kW | 15kW

Calculators:

Basic solar payback estimator

Solar & battery storage sizing & payback estimator (also works for ‘solar only’ systems as well as battery retrofits)

Visit our full calculator resource library

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Since 2008 our knowledge and sophisticated software has allowed over 160,000 Australian households and businesses to make a well-informed choice on their solar & battery installer.

 

Frequently asked questions (FAQ)

Hopefully the previous 8 sections have helped to answer all your questions, but just in case we’ve put together a collection of some of the most common questions that we get about solar power with short answers and links to relevant articles on our website.

  1. Who undertakes the solar installation and how long does it take?

The company that you select to undertake your solar system installation will either send out their own accredited technicians or accredited subcontractors to do the job. In some instances, the job may be carried out by general labourers but signed off on by an accredited solar installers in a ‘foreman’ type role. Your chosen solar company should be able to tell you ahead of time which one it will be.

Through our role as a comparison & brokerage service, Solar Choice will provide you a free, immediate and informative Quote Comparison from up to 7 prominent and competitive installers who operate in your area of Australia, the comparison will include a summary of the products they offer. Through this FAQ and related links throughout our website, Solar Choice aims to provide you with all the impartial guidance and information you need on the various products, prices and installers that you come across, so that your selection is an educated and well-informed one.

Installation of an average sized household solar system can usually be completed in under two days; ‘lead times’ (i.e. the time it takes for the company to send someone out to your property to do the installation) are generally anywhere between 2 weeks to 2 months, depending on the time of year and how busy/popular they are.

2. How much solar power / how many solar panels do I need?

The process of sizing a solar system is not an exact science, and depends a lot on your goals, available roof space and budget. The most popular solar system sizes in Australia are between 4 and 6 kilowatts (kW). The number of panels is less important than the kW capacity, as many panels have different wattages and can be put together to yield a total kW number. For example, a solar system consisting of 19x 275W panels would have a total capacity of about 5.2kW.

3. Is my roof appropriate for solar?

Because solar power is so affordable in Australia, virtually any modestly-sized, shade-free roof is a candidate for solar power (even south-facing roofs may be viable in the right circumstances).

4. What is an inverter and where should it be installed?

An inverter converts the DC electricity generated by your solar panels into 240V AC electricity suitable for use in your home.

Inverters are usually smaller than a suitcase, and should be mounted on a wall in a shady spot close to your electrical switchboard.

5. How much does a solar panel system cost?

The price you’ll pay for a solar panel system depends on the size, the components used, the company supplying it and the location it is installed. As a rule of thumb, a 5kW solar system (one of the most popular system sizes) costs anywhere from about $4,000 to about $10,000 or our most recent Solar PV Price Index

Next steps:

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