Home solar power systems explained

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Choosing a solar power system for your home can be overwhelming. That’s why we’ve created this expert guide to home solar systems – to help you start accessing solar power without all the confusing jargon. 

 This guide will cover all the nitty-gritty details around residential solar systems, from how they work to how they can save you money.

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How do solar power systems work?

In Australia, solar power systems typically consist of three components: – solar photovoltaic (PV) panels, an inverter and mounting/racking.

Solar panels

Solar panels work by collecting sunlight which activates solar cells and produces electrical currents. These panels are generally mounted to the roof of your home at a 10-degree tilt to maximise sun exposure.

Solar inverters

After the panels have produced electrical currents, the solar inverter is responsible for converting this electricity into a current that can be used in the home.

Appliances and the like generally require AC (alternating current) electricity, but the electrons collected within a solar panel are in DC (direct current) form.

Mounting and racking

Solar panels are mounted onto roofs using racks that secure them in place. Tilt racks can help adjust your panels for optimal angles based on the seasons in your state or territory and the time of day.

Moreover, how your solar panels are racked is especially important if your solar panels are being installed on a flat roof.

Other solar components

While these peripherals are not mandatory, they may add value to your solar system depending on your consumption habits and lifestyle:

• Solar hot water system
• Solar pool pump
• Solar monitoring system

How is solar-converted electricity used?

Where this converted electricity then ends up will depend entirely on the connection type you have for your system.

Note: Keep in mind that regardless of connection type, Aussies are required to have a two-way net electricity meter or solar smart meter installed to record the energy they consume from the grid and the energy they export back to it.

Grid-connected solar system

Typically, homes operate with a grid-connected solar system. This means that your home and solar power system are connected to the grid, allowing the house to access grid power during the evening while solar energy is used during the day as it is generated.

Households are also eligible for a solar feed-in tariff through this connection type, meaning they’ll be rewarded with bill credits for every kilowatt (kW) of excess solar power exported back to the grid.

Off-grid or hybrid connections

Both of these connections incorporate a solar battery into the home solar system, to help store excess solar energy for use when sunlight may not be as prevalent. Batteries also offer backup capabilities (depending on the brand and model of battery) in the event of a power outage or blackout.

However, a hybrid connection will keep the home connected to the grid as well as its solar and battery system. In comparison, an off-grid connection leaves households completely independent from grid power, relying only on generation from their solar system and what’s been stored in the battery.

What is the average cost of a solar installation?

The cost of a solar installation will vary depending on a number of factors, such as the size of the system, the quality of products chosen and the demand for solar installers at the time of your installation. As you can assume, the larger the solar panel system, the more expensive it is going to be.

Generally, however, you can expect to pay between $4,200 and $10,000 for solar panels in Australia. According to a recent pricing index from SolarChoice, Western Australia typically has the cheapest solar panel costs, while those in the Northern Territory can expect to pay two to three times more than other states and territories for home solar panels.

What size residential solar system do I need?

The size of the residential solar system you need will be dependent on factors such as:

• Household energy usage
• The number of residents at the property
• Roof space.

Solar power systems are measured in kilowatts (kW), with one panel typically producing around 4 kilowatt hours (kWh).

According to Canstar Blue research conducted in 2024, a 6kW solar power system is the most common system size that Aussies have installed. 22% of survey respondents have a 6kW system, with 5kW the second most common size (16%).

How many solar panels will I need?

As for the number of solar panels you’ll need, this will vary depending on the size of the overall system and the generating capacity of each individual panel.

Those installing a standard 5kW home solar system will typically only need about 14 panels, but those looking at an 8kW or 10kW system may need as many as 28 solar panels. Please note that solar panels are generally measured in Watts (W) not kW.

If you are unsure what size or type of solar power system would be best suited to the energy needs of your home, your solar installer should be able to help you make this decision. They can also assist in helping you choose the best solar inverter and solar panels for your home.

Should I buy a solar battery too?

Solar batteries are a great way to maximise solar energy usage, but they are an expensive cost on top of your solar installation. Because of this, it’s best to assess what you hope to achieve with a residential solar system before making a purchase decision around solar batteries.

Solar batteries are generally useful and cost-effective in the following scenarios:

• If you are on a time of use or controlled load tariff, where pricing fluctuates depending on the time of day, you may find that a solar battery can assist in storing your generated power to be used for energy-intensive appliances at times when it costs you more to consume power from the grid.
• If you have an electric vehicle that you charge at home, you might also consider a solar battery to help offset the cost of charging your car via the grid.

If you’re not sure how or where to start searching for the right solar battery for you, we highly recommend visiting the Canstar Blue guides listed below:

• Best solar battery storage in Australia
• Best solar battery company in Australia
• Solar battery price: is it worth the cost?

Solar plans and prices

Here are some of the electricity deals marketed towards customers with solar panels available in New South Wales, Victoria, Queensland and South Australia.

These plans typically offer a higher feed-in tariff than standard market offers. It’s best to review the fine print to check the base rates as opposed to just choosing a plan with a higher FiT.

Are there still solar rebates available?

There are still some active solar rebates available in Australia. These rebates, however, may vary in availability depending on the state or territory that you reside in.

Aside from rebates, there is also the government’s monetary incentive – the Small-scale Renewable Energy Scheme. To be eligible, you must meet the following criteria:

• Your system must be less than 100 kW and output less than 250 MWh.
• Your solar system must be installed and designed by a Solar Accreditation Australia (SAA) accredited installer, retailer and designer.
• Choice of panels and solar inverters must be approved for installation by the Clean Energy Council.
• Your system must satisfy Australian and New Zealand standards.

Through this scheme, customers who install an eligible small-scale renewable energy system, such as rooftop solar panels, can earn small-scale energy certificates (STCs), which can then be sold on your behalf by your solar installer or a registered agent.

These certificates are usually sold on your behalf by your solar installer or a registered agent.

Are the any financing options for home solar system installations?

Installing a solar power system in your house is quite expensive. Luckily, there are several ways to finance installation if you don’t have the upfront funds available. The top ways you can finance your residential solar systems include:

• Green loans
• Interest-free solar loans
• Personal loans
• Adding solar to your mortgage
• Solar leasing
• Solar Power Purchase Agreements (PPA)

How long will it take for my solar power system to save me money?

The length of time it will take you to pay off your installation (also known as the payback period) will depend on several factors, such as:

• The number of solar panels for the home
• Type of inverter
• Installation costs 
• The chosen solar feed-in tariff
• How much of the generated solar energy is being used
• The degradation of the solar panels over its lifespan.

For a rough estimate, you can expect it to take between three to six years to pay off your system, depending on your location. Typically, a 4kW system can produce 16kWh of electricity per day. However, this figure may fluctuate depending on weather conditions and only serves as an estimate.

As for how solar power systems can save you money, there are two main ways it can do this – through being less reliant on the grid and earning credits through a solar feed-in tariff. By generating your own energy, solar power in the home can help to reduce the amount of electricity required from the grid to power things like appliances, lights, heating and cooling. This, in turn, could help to lower your electricity bill, as you are no longer sourcing a portion of your power from the grid. 

If you are on a time of use tariff, you may even benefit from more savings on your bill if you reserve your generated solar power in a battery and wait to use it at a time when usage rates are at their peak.

You can also save money with solar by exporting any unused power back into the grid in exchange for a solar feed-in tariff (FiT). This is a credit that’s paid in cents per kilowatt hour (kWh), which is credited to your energy bill. You may even be eligible for a solar-specific energy deal which generally offers a higher FiT rate. Keep in mind, however, that these high FiT plans may be concealing higher usage rates, which may cancel out any savings. 

Be sure to always check the energy price fact sheet before signing up to a deal, especially if your solar panels are not exporting a lot of electricity.

What maintenance is required for home solar systems?

Like most appliances, solar panels also require regular maintenance and servicing. For most home solar systems, a service should be done every five years or so, but your manufacturer should supply a suggested maintenance schedule upon installation.

Keeping solar panels clean and tidy is also an important part of keeping your system running efficiently. Some services may include a clean too where others won’t so it is important to clarify this prior. 

While being more of a preventative measure, birdproofing your solar panels can also prolong the lifespan of your solar panels by deterring birds from nesting on top or below them. 

How to find a solar installer

For a task as big and costly as installing a solar power system, you want to ensure you are choosing a quality installer. 

That’s why it’s important to call around and gather a couple of quotes before making a purchase decision. This way, you can assess not only the prices on offer from companies in your area but also the customer service they offer during the process. 

It might also be helpful to talk to friends and family who have recently installed solar on their property and whether they would recommend the company or not.

Alternatively, you can compare a range of solar installers in our annual customer satisfaction report. Here, we ask everyday Aussies how they would rate their installer based on a number of factors, including customer service, set-up costs and overall satisfaction. To see Australia’s top-rated solar installer, click on the link below.

Best-Rated Solar Installers