Solar power for home and business

Solar power is a viable renewable energy source for consumers looking for a sustainable way to reduce power costs.

It’s the process of converting sunlight into power Photovoltaic solar panels harness the suns energy and turn it into electricity that can be used directly, or stored in batteries, by consumers.

Our Solar power for home and business guide will help you evaluate the viability of using solar energy in your home or business.

We cover government rebates and feed-in tariffs, system types, and the factors that impact on the ability to generate solar power at your property.

cover to Solar Calculator's getting started guide to solar power
1 Is solar right for you?
2 rebates
3 Your property
4 Solar power systems
5 How solar works
6 Buying solar
1

Is solar energyfinancially rightfor you?

Solar power is a long-term investment. Whether it’s financially sustainable is dependent on the cost, the estimated payback and any government rebates and feed-in tariffs.

Use our solar calculator

You can use our solar power calculator to understand if solar is financially worth it for your home or business. To get started all you need is the amount you pay for electricity and an estimate of your electricity consumption habits. It’ll provide an accurate assessment of the cost, expected payback, ROI, electricity savings and environmental benefits of a solar power system for your property.

use our solar calculator

Solar payback and savings

It’s not uncommon for solar panel systems to payback within 4 – 7 years, however, the payback period varies according to several solar power and property variables including system cost, electricity cost and when you use your power.

The image below shows solar power and financial cost and savings results from our calculator for a typical 5kW solar panel system in NSW.

solar calculator results for a typical 5kW system in NSW

You’ll receive a far more accurate assessment of what solar can do for you when you input your details into the calculator.

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2

Rebates and incentives

There are three forms of solar incentives you should be aware of:

  • Federal solar rebate
  • Any state government rebate schemes
  • Feed-in tariffs

Solar rebates

The good news is if you purchase solar panels, you’ll receive a solar rebate from the Australian government. Although the incentive is slowly being phased out over the next 12 years, it’s still a generous incentive that can reduce the cost of solar panels significantly. The rebate varies depending on how much solar power your system generates. The table below shows the solar rebates for different size systems.

Solar rebates Australia
System size: Rebate:
3kW $1,500 – $1,850
5kW $2,600 – $3,100
6.6kW $3,400 – $4,100
10kW $5,200 – $6,200

Solar feed-in tariffs

Once your system starts generating solar power, you’ll receive financial credit from your retailer for any excess energy not used directly by your property. This financial credit is called a feed-in tariff and is separate to the solar rebate. The feed-in tariff is credited for each kilowatt-hour (kWh) of electricity exported back to the grid. The credit amount varies by state and the retailer. We list the average feed-in tariff by state below:

Ready for your quotes?

3

Is your property right for solar power?

There are several site-specific and geographical factors that impact the amount of solar power that your panels can generate for your home or business. While these variables may not impact on your purchase decision, they’ll nonetheless affect the output of your solar panels. As such, they’re all factored into our calculations based on your inputs.

What impacts solar power output

Some factors affect the power output of a solar panel on a daily basis. These include geographic location, panel orientation, panel angle, panel temperature, panel efficiency and sunlight obstruction from shading.

  • Panel orientation
  • Panel angle
  • Panel temperature
  • Shading or obstruction

1. Panel orientation

A northern orientation is best in the southern hemisphere for maximising solar panel output. However, a rooftop will still likely be suitable for solar panels even if it doesn’t face north. Consider your roof’s orientation in conjunction with your consumption habits. An east/west orientation may suit your household if you use power at either end of the day, as the east facing panels generate electricity in the morning while the west facing panels do so in the late afternoon.

2. Panel angle

The pitch or angle of your rooftop is also a factor that affects panel output. Year round, the optimum panel angle is at the same latitude as your location, e.g. Sydney 33.87°. If you have a flat roof, you can mount the panels on an incline to achieve better output.

3. Panel temperature

The hotter your panels get, the less efficient they become. Higher quality panels are more effective at dealing with the effects of temperature.

4. Shading or obstruction

If your panels are subject to shading or obstruction throughout the day, this will affect their output. If only some of your modules are obstructed from sunlight, the use of microinverters or power optimisers will allow your panels to perform better under shading conditions.

Electricity consumption

Once you know your property’s suitability for solar power, you then need to analyse your electricity consumption. Knowing how much you us and pay for electricity is necessary to determine your potential solar savings. Your consumption also sets the basis for the system size that you need.

This system size calculator will help you select the right system size for your property.

Electricity habits change

Most solar owners change their usage habits after they install solar power, as they are far more aware of when they consume their electricity. Using your electricity at times when your system is generating solar power will increase your savings and further reduce your electricity bill.

property variables including orientation, panel angle and shading
4

The different types of solar power systems

There are different types of solar power systems available for domestic and commercial use:

  • A solar panel system
  • A hybrid system (panel and battery system)
  • A battery ready system
  • A stand-alone system

If you already own a solar panel system, you can upgrade by adding a battery to form a hybrid system.

How to select the best solar energy system for you

For most people, choosing a system type is based on consumption and usage habits, savings goals and of course, budget. We review each of the solar power systems:

1. Solar panels

A solar panel system is still the most suitable and viable system for most consumers. It comprises of solar panels and an inverter or microinverters. It only produces electricity during daylight hours, and generally offers the fastest payback of any system type.

2. Panel and battery systems (hybrid systems)

Hybrid systems are more and more appealing to consumers as the price of solar batteries decreases. It consists of solar panels, a solar battery and an inverter. Hybrid systems can be engineered to facilitate battery backup.

3. Battery ready systems

Battery ready systems are for consumers that intend to install solar battery storage within 2-3 years. It’s slightly more expensive than a straight solar panel system as a hybrid inverter is needed to accommodate a solar battery at a future date.

4. Off-grid solar systems

If you live in an area not connected to the grid, you may consider an off-grid system (a stand-alone system). This type of system operates independently of the grid. While typically far more expensive than grid-connect systems, it’s only recommended to opt for an off-grid when the cost to connect a property to the electricity grid is prohibitive.

Solar power systems: Batteries and components

Is it worth getting a battery?

One of the key decisions to make when purchasing a solar power system is whether to go for solar panels, or a solar panel and battery system. Due to the current high cost of solar batteries, for most consumers, it makes economic sense to opt only for solar panels. However, for households that use a lot of power in the morning and evening peak periods, and can afford the upfront cost, a hybrid system can generate good financial savings, paying off within ten years.

The 10-year payback period is key to hybrid systems, as unlike the panels, the batteries aren’t likely to last beyond ten years.

Panel and battery systems are suitable for:

  • High evening and morning peak energy users
  • Users that are prepared to pay more than $15,000 for a system
  • Users motivated to minimise reliance on grid power

Other system components

We take a look at other system components that you may select when purchasing a system:

  • Solar batteries
  • Inverters
  • Microinverters

Solar batteries

Solar batteries allow you to store energy produced by your solar power system for later use. Sizes start from as little as 1.2kWh and go up to 14kWh for domestic use, though you can combine multiple batteries for greater capacity.

Inverters

Inverters are a necessary component of every type of solar system. They convert the direct current (DC) generated from solar panels into alternating current (AC) that you can use in your home or business. The quality of the inverter you select can have an impact on the performance and longevity of your system. As such, there can be significant price discrepancies between cheap inverters and top of the line models. A good inverter will generally last about 10 – 15 years, while the panels should last 25+ years.

Microinverters

If shading is an issue at your property, or you’re positioning panels on either side of your roof, you should strongly consider microinverters or power optimisers. A typical string inverter will shut down if one panel in a series stops generating power, whereas microinverters allow each panel to operate independently. Microinverters are more efficient, but also more expensive, and you can expect to pay around 15 – 20% more for the system.

5

How solar power works

Photovoltaic (PV) solar panels convert sunlight into electricity. An inverter converts the direct current generated from the panels to alternating current that can be used to power appliances in your home.

Panels only generate electricity during daylight hours

When the sun is shining, solar panels will directly power the appliances in your home. Any excess energy generated by your panels will be exported back to the grid where you’ll earn a feed-in tariff from your electricity retailer. If you have battery storage, the excess energy can charge your battery for later usage. Solar panels do not generate any power at night, or when the sun is not shining.

Will I still need to pay for electricity?

Yes. If the household power demand is higher than what your panels are generating, you will need to purchase power from the grid.

sun shining on solar panels
6

Buying solar power

Once you have an idea of the expected costs, the system type and size you need, you’re ready to buy solar panels. The next step is obtaining different quotes so you can compare prices, panel brands, warranties, and select a good reliable solar installer. Here are the steps to follow:

1. Get quotes

We recommend comparing quotes from different solar companies before making a purchase decision. We provide a quote service and ensure that the Clean Energy Council accredits all installers. We vet all of the installer companies that offer quotes to customers through our website and turn many companies away.

2. Paying for your solar system

Investing in a solar power system can involve a significant financial outlay. If you’re not in a position to pay cash upfront for a unit, it’s possible to lease a system or take out a solar loan.

Both leasing and financing will add to the overall cost of the system, and increase your payback period and reduce your savings slightly, so it’s important to consider how you plan to buy the system in the solar power evaluation stage.

Leasing and financing

Solar leasing involves paying a monthly fee to the solar panel owner so that you can benefit from a system’s output. Solar financing allows you to own the system right away, but you’ll pay interest on the amount of the loan.

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