Welcome to Solar 101! This guide will provide you with everything you need to know about solar power before you get quotes. My name is Finn Peacock, the founder of Solar Quotes. Over the past 11 years, I’ve distilled everything I’ve learned about solar power into this comprehensive guide.
The Three Main Components of a Solar Power System
1. Solar Panels
The first component of a solar power system is the panels. These can be mono-crystalline, poly-crystalline, or a hybrid known as cast mono. The type of panel you choose (mono, poly, or cast mono) is less important than ensuring you buy a good brand that will last 25+ years on your roof. There are good budget brands, reliable mid-range brands, and premium brands. However, be wary of no-name panels, which might only last three to five years. Think of it like cars: you can choose a budget brand (Kia), a regular brand (Toyota), or a premium brand (BMW). Generally, you get what you pay for, and choosing a well-known and reputable brand is crucial for longevity and performance.
2. Inverters
The second main component is the inverter, which converts the DC electricity generated by your solar panels into the 230V AC electricity used in your home. Inverters can be either string inverters (installed on the wall) or microinverters (installed on the back of each panel). Additionally, there is a hybrid option known as power optimizers. If you choose a string inverter, make sure it’s installed in a shaded spot, like a cool garage, to prevent the intense Australian sunlight from shortening its lifespan. Inverters are the component most likely to fail within the first 10-15 years, so even if you’re on a limited budget, it’s worth considering a premium inverter. Here’s a rundown of popular inverter brands in Australia and their relative price ranges.
3. Racking
The third main component is the racking, which securely mounts your solar panels to your roof. There are various racking brands, and the difference between budget and premium brands is about $100 per kilowatt of solar panels installed. A reliable racking system is essential for the durability and safety of your installation.
Understanding Your Electricity Usage
To maximize the benefits of your solar power system, it’s crucial to understand how much electricity you use and when you use it. Solar electricity generated by your panels is first used by your home appliances, with any surplus exported to the grid. Electricity retailers pay you a small amount for each kilowatt-hour of surplus energy. However, it’s better to use the solar power generated by your system rather than export it. Self-consumed electricity saves you about 30 cents per kilowatt-hour, while exported electricity earns you only 7 to 20 cents per kilowatt-hour. Households that use a lot of electricity during the day or can set their appliances to run on timers can see payback periods of 2.5 to 5 years, with a return of 20-25%. For those not home during the day, payback periods extend to 6-8 years, but still offer a 12-15% return on investment.
Choosing the Number of Panels
My advice on the number of panels has changed over the years due to falling prices for solar installs, rising electricity prices, and increased feed-in tariffs. For most homes, the absolute minimum to consider is 6.6 kilowatts of panels (about 22 panels) with a 5-kilowatt inverter. Many homeowners regret not installing more panels initially because it’s expensive and complicated to add more later. Furthermore, adding panels to the initial quote can be surprisingly affordable.
Understanding Solar Rebates
The famous Australian federal solar rebate, technically known as the STC scheme, provides a point-of-sale discount on the final cost of a solar installation. The subsidy is worth about $600 per kilowatt of solar panels installed but varies slightly by location. For example, a 6-kilowatt system attracts around $3600 in rebates. Anyone can claim the rebate, even if you’ve previously installed solar. The only restrictions are that your system must be less than 100 kilowatts, it must be installed by a Clean Energy Council accredited professional, and you must use approved panels and inverters. Note that the federal solar rebate is being phased out and will reduce by about one-tenth each January until it goes to zero in 2031.
Understanding Feed-in Tariffs
Feed-in tariffs are payments you receive for the solar electricity you export to the grid. Between 2009 and 2012, generous feed-in tariffs paid 30 to 66 cents per kilowatt-hour to kick-start the solar industry. Since then, the cost of solar systems has dropped by about 80%, and feed-in tariffs have reduced to 7-20 cents per kilowatt-hour. Despite this reduction, a well-designed solar system can still achieve a payback period of around 5 years.
Optimal Panel Direction and Angle
Panel Direction
For optimal solar placement, north-facing panels produce the most energy overall, while east-facing panels peak in the morning and west-facing panels in the late afternoon, each generating about 15% less energy annually than north-facing panels. East and west-facing panels can accelerate payback by increasing self-consumption. Even south-facing panels can be worthwhile if there are no other options.
Panel Angle
The ideal panel angle for maximum energy production is close to your location’s latitude. However, if you can’t achieve the perfect angle, don’t worry—panels mounted at your roof’s angle will still perform well.
Typical Payback Period
A well-designed solar system typically pays back in 4-7 years. This can vary depending on how much solar energy you consume and your feed-in tariff. When you get quotes, the installer should provide a payback analysis to help you decide if solar is a worthwhile investment.
Expected Costs for Quality Solar Systems
Approximate prices for good quality solar systems in Australia are shown in the table below. These prices include the federal solar rebate but not the state-level rebates available in Victoria. To save around $800, you can opt for a reputable budget inverter. Costs can increase if you need an electricity switchboard upgrade or if your home’s design makes installation difficult. Installing batteries will at least double the system cost. Be wary of very cheap solar systems, as they may cost more in the long run due to repairs and lost output. Investing in a quality system ensures durability and better performance.
Are Batteries Worth It?
One of the most famous batteries, the Tesla Powerwall, costs around $15,000 to install and will save you about $1,000 a year, meaning a break-even point of at least 15 years. While batteries can be added to existing solar systems using AC coupling, they are not currently cost-effective for most homeowners. However, state-level battery rebates in Victoria, South Australia, and the ACT can make batteries more affordable, but they still require careful consideration.
Financing Your Solar System
Most Australians buy solar power systems with cash. If you have the cash available, investing in a solar system can provide a tax-free, reliable return far higher than bank interest rates. If you don’t have the cash, many solar installers offer no-interest finance. However, these deals often charge the installer a fee that is passed on to you. Shopping around for a low-interest finance provider can yield better deals.
Conclusion
You now have all the knowledge you need to confidently buy a good quality solar system. The safest way to buy solar is to get quotes from reputable, pre-vetted installers. Visit Solar Quotes to compare quotes and find the best deal for your solar installation.
