House with solar panels on the roof

Home solar power systems explained

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In this guide, Canstar Blue details all you need to know and consider before installing a solar power system at your home.

Let’s face it; choosing a solar power system for your home can be overwhelming. Especially if you don’t understand how solar energy works in the first place! While there are pages and pages of information on cost analysis, best products and solar savings, it can be daunting for a solar newbie looking to install panels at their home.

That’s why we’ve created this expert’s guide to home solar systems – to help you start accessing solar power without all the confusing jargon. From how it works to how it can save you money, what it will cost and how to find the best deal for you, this guide will cover all the nitty grit details around residential solar systems.

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How do solar power systems work in Australia?

Graphic of house with solar panels and arrows

To generate solar power, you’ll firstly need a solar system. In Australia, solar power systems typically consist of two components – solar photovoltaic (PV) panels and an inverter. The solar panels work by collecting sunlight which activates solar cells and produces electrical currents. These panels are generally mounted to the roof of a home in order to maximise sun exposure.

After the panels have produced electrical currents, it is then up to the solar inverter to convert 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.

Where this converted electricity then ends up will depend entirely on the connection type you have for your system. Typically, most homes will operate with a grid-connected solar system. This means that the house and solar power system are connected to the main electricity grid, allowing the house to still access grid-power during the evening while solar energy is used during the day, as its generated. Households are also eligible for a solar feed-in tariff through this connection type, which sees them financially rewarded for sending excess solar power back into the grid.

Other types of connections include off-grid or hybrid connections. Both of these incorporate a solar battery into the home solar system to help store excess solar energy for use when sunlight may not be as prevalent. A hybrid connection will keep the home connected to the grid as well as its solar and battery system, whereas 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 size residential solar system do I need?

The size of the residential solar system you need will be dependent on factors like household energy usage, the number of residents at the property and roof space. Solar power systems are measured in kilowatts (kW), with one panel typically producing around 4 kilowatt hours (kWh).

According to research conducted by Canstar Blue in 2022, a 6kW solar power system is the most common system size that Aussies have installed, with between 22% and 29% of respondents across the different states and territories sharing that they had this size.

As for the number of solar panels you’ll need, this will vary depending on the size of the overall system and 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, 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 panels for your home as well.

What’s the best position to install solar panels?

Generally in Australia, it is considered best to install your solar panels north-facing on your rooftop as this is the direction that will capture the greatest sunlight during the middle of the day. However, depending on the surroundings of your home, a true north installation may not be ideal or realistic.

The biggest variables when it comes to the best position for solar panels include roof angle, shading or obtrusions near the roof, cloud cover and geographical location. The latitude of where you live may also contribute to your solar panels’ positioning – as a general rule of thumb, you’d want the angle to be at a similar degree to the latitude for maximum effectiveness.

A good solar installer should be able to take all of these into consideration though when calculating the optimal angle and position for your panels.

Solar Plans & 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. Again, it’s best to review the fine print to check the base rates as opposed to just choosing a plan with a higher FiT.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 3911kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4613kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

What is the average cost for 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.

Are there still solar rebates available?

Though the number has dwindled, there are still some 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 though, there is also the government’s monetary incentive – the Small-scale Renewable Energy Scheme. 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 in order to recoup some of the costs associated with installation. These certificates are usually sold on your behalf by your solar installer.

Are the any financing options for home solar system installations?

Installing a solar power system on your house can be quite an expensive endeavour. Luckily there are a few different ways to finance installation if you don’t have the upfront funds available. Some of the top ways you can finance your residential solar systems include:

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

Australian bank notes in a glass jar

Like most aspects of a solar installation, the length of time it will take you to pay off your installation will depend on a number of factors, namely the number of solar panels for the home, type of inverter, installation costs, solar feed-in tariff and how much of the generated solar energy is being used.

Typically, a 4kW system can produce 16kWh of electricity per day, however, this figure may fluctuate depending on weather conditions. Over the years, degradation of the solar panels may also impact the efficiency of the system which may delay the time it takes to payback the system.

For a rough estimate, however, you can expect it to take between three to six years to pay off your system, depending on your location.

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 needed to power things like appliances, lights or 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 on your energy bill. You may even be eligible for a solar-specific energy deal which generally offer 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, so 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.

Should I buy a solar battery too?

Solar battery and solar panel connected

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 first before making a purchase decision around solar batteries.

You may find it useful to install a solar battery if you’re looking to store any leftover power and use it later at night when your panels are not generating any solar electricity. If you’re not concerned about using electricity from the grid at night, then perhaps a battery isn’t for you. Again, you should speak to a licenced installer to best weigh up your energy needs.

It’s worth pointing out that 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 at times where it costs you more to consume power from the grid. Particularly, if you are only home or using large appliances in the evenings – when electricity is usually the most expensive on these tariffs.

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.

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 at 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

Image credit: divanov/Shutterstock.com, pada stockphoto/Shutterstock.com, Bakhtiar Zein/Shutterstock.com

Kelseigh Wrigley
Energy Specialist
Kelseigh Wrigley was a content producer at Canstar Blue for three years until 2024, most recently as an Energy Specialist. She holds a Bachelor of Journalism from the Queensland University of Technology.

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