Solar electricity

Understanding solar electricity

Is solar electricity the same as solar hot water?

No. A solar hot water system collects solar energy - heat - from the sun, and uses that heat to warm water. There is no electricity generated in this process.

In contrast, a solar electricity system captures solar radiation from the sun, and turns it into electricity that can be used within our homes. This page is about solar electricity.

How is solar electricity generated?

A solar electricity system consists of a collection (array) of joined solar panels (also referred to as photovoltaic panels or PV panels), that have semi-conducting material such as silicone embedded into each panel. The silicone absorbs photons from sunlight, which knock electrons loose within the silicone. The movement of electrons results in the generation of a direct current of electricity, also known as DC electricity. In most households, DC electricity is not useable, so most solar PV systems have an inverter connected to them to convert the DC electricity into AC electricity, which is what comes out of our power sockets.

How is solar electricity stored?

Once electricity is generated, it must be stored in one way or another – it can’t just sit in our electrical wiring. Most homes that are already connected to mains electricity simply feed any excess power they generate back into the grid, which means back into the general pool of electricity that supplies the neighbourhood.

If your home is not connected to mains electricity you may find it more cost-effective to set up an off-grid solar electricity system, which allows excess energy to be stored in batteries and drawn as needed. Homes on mains power could technically choose to go off-grid, but the cost to set up battery storage is usually too high to make it a cost effective alternative. This option is becoming cheaper and may be worth investigating if you want to further reduce reliance on the mains.

How is solar electricity used?

In Victoria we operate on a net feed-in system. This means that where a solar system is connected to the mains, the household first uses energy generated by the solar system. If there is not enough energy being generated at a given time, additional energy will be drawn through the meter from the grid. If there is more energy being generated than the household requires at any given time, the excess will be fed through the meter into the grid. Households receive payment for any energy fed into the grid.

What are the benefits of solar electricity?

Low maintenance

Once purchased and installed, a solar PV system should last for 25 years or more. During that time, it will need very little maintenance and usually no new parts, so the electricity it produces over that time is virtually free. Each kilowatt hour (kWh) of energy you use that has been generated by your own solar PV system is a kWh of energy you don’t need to buy.

To keep your system running as efficiently as possible it is a good idea to clean the panels once or twice a year to remove dust and droppings. Just use warm soapy water and a soft cloth, then rinse.

Potential earnings from a high feed-in tariff

If you already have a system and it was installed a few years ago, you may have a higher feed-in tariff than is currently available. If you are on the highest 66 cents per kilowatt hour (c/kWh) feed-in tariff, this means that you will be paid more per kWh of energy you feed into the grid than what you will be charged per kWh you draw out of it. If this is the case, you have to opportunity to significantly offset your electricity bill or even generate a credit.

To take best advantage of a high solar feed-in tariff you need to try to feed as many units of energy into the grid as you possibly can during the time of day you are generating the most energy, so that you earn the most for it. This means timing appliances so that they use energy outside of peak generation times, when you will be billed at the lower rate of around 28c/kWh.

I am considering installing solar electricity, what do I need to know?

There are several important things you need to consider when you are investigating the potential for installing grid-connected solar electricity on your property.

What will your solar ‘feed-in tariff’ be and what does that mean for you?

Grid-connected households who install solar electricity systems will be paid the standard solar feed-in tariff about 10 cents per kWh of energy they feed into the grid. This is significantly less than what we are charged per kWh of energy we take out of the grid, usually around 28 c/kWh.

Energy that has been generated by a grid-connect system can’t ‘wait’ in our power lines for us to use it, so any we generate in excess of what our home uses within a 30 minute time slot, will be fed back to the grid and paid for about 10 c/kWh. In this scenario, it will be to your financial advantage to time as much of your household energy use as you can to be between the peak solar generation times of 10am and 3pm.

Changing when you use energy may be easy or difficult for you, depending on whether you have small children at home, are out at work all day, and a myriad of other possible factors. But it is definitely worth considering when you use power in your home and if there is any flexibility in this when deciding whether solar electricity is for you, because of the financial implications.

Site considerations

To work optimally, Solar PV panels need to be placed in the best possible position to catch sunlight, ideally north facing and at an angle of 30 – 40 degrees (this angle varies according to your location). If your roof faces east but you really don’t want to install roof frames to face them north because of what it will look like, perhaps solar isn’t for you.

In addition to optimal placement, the location needs to be as shade free as possible. If your roof is shaded for a large portion of the year or shaded during the peak generation period (between approximately 10am and 3pm), then solar might not be appropriate.

Finally, the space you have available on your roof to place panels is definitely a factor. You may simply not be able to fit the size system you need.

Once you have made sure you have plenty of shade free roof space for solar PV panels, and can position them optimally, then sizing is your next decision.

Sizing a system

One way to approach sizing is to look at your current electricity bill and choose a system size that will generate the amount of electricity you currently use per day.

A much better approach is to put some thought into reducing your overall household energy use first, and then size for the reduced load. There is no point investing in a 5kW solar electricity system if you can quite easily reduce your household energy use so that a 3kW system will provide enough. You may be better off spending the difference in cost on energy saving measures.

To find out ways to reduce your household energy visit the other Sustainable Living pages on this website, grab a free copy of council’s Practically Green at Home guide, or visit some of the websites listed at the end of this page.

Once you have worked out how many kWh of electricity your home will use on the average day, choose a size to best suit those needs.

Here is a list showing the approximate energy production of various sized Solar PV systems for Melbourne.

  • 1 kW system:            4  kWh a day
  • 1.5 kW system:         6  kWh a day
  • 2.0 kW system:         8  kWh a day
  • 3.0 kW system:        12 kWh a day
  • 4.0 kW system:        16 kWh a day
What options do I have in panels?

There are several different types of solar panels available. Your installer should quote you on one type or another, and give you reasons for suggesting that choice. These are the three main types of panels on the market.

Monocrystalline PV cells are made from a thin slice of a single silicone crystal, and have been around for about 50 years.

Polycrystalline PV cells are made from multiple thin slices of silicone crystal. They are thought to be a slightly better choice if there might be any shading of the panels.

Thin film / amorphous PV panels are made differently than crystalline panels. A solution containing a much lower grade of silicone is sprayed onto a base of glass or stainless steel. Thin film panels are cheaper to manufacture and can be made into flexible panels. However they are quite a bit less efficient than crystalline panels, so that you would need two to three times as much space to mount them on as you would with crystalline to achieve the same energy output. These panels are less common than the other two in Melbourne, but are excellent for use on curves spaces, boats, vans and other applications where weight is a consideration.

Choosing a supplier

It is easy to feel bombarded with choice when it comes to choosing a supplier for your solar electricity system and you might feel tempted to go with whoever approaches you first, or for the cheapest quote. However, it is really important to remember that Solar PV is a large investment; usually with a product life expectancy of 25+ years. It is worth taking the time to consider several aspects of the quote and provider to help you have the best chance of a good investment and long product life.

Reputation and longevity of supplier

Whilst choosing a respected supplier with a long history in the solar industry in Australia is no guarantee that they will be around forever, the knowledge that they have weathered previous ups and downs in the industry is at least some additional reassurance that they are around to stay. Ideally you want to feel certain that whoever you purchase your system from will be around for the next 25 years to help you out with any issues that may arise with your product and to honour any warranties they have provided.

Warranties: length, type of cover, and who will honour it

Different components of your proposed solar electricity system will be under warranty for different lengths of time. It is important to know the length of time for each component, and also specifically what it covers. For example, a good solar panel should have a performance warranty (that it will generate electricity) for 25 years and a material and workmanship guarantee of between 5 and 10 years. An inverter will have a product warranty anywhere between one and ten years. The longer length warranty you can get the better.

As well as knowing what your warranty covers and for how long, you need to know who exactly is going to honour it. This could be the manufacturer, or the importer.

If it is an overseas manufacturer with no Australian office, this can make claims tricky. If it is the Australian importer and they go out of business or sell their business, their warranty obligations towards you cease. Ideally you want to know that there is a reputable and established company – whether manufacturer or importer – in Australia, who is responsible for looking after your claim should the occasion arise.

Quality and efficiency of panels

To begin with, you need to make sure the panels being proposed meet Australian Standards.

Your next question will be about their efficiency. Efficiency is calculated by looking at what percentage of the sunlight that hits them they are able to convert into energy. Most solar panels have an efficiency of somewhere between 12 and 21 per cent. This means that of the total amount of sunlight that hits the panels, your panels could turn anywhere between 12 and 21 per cent of that into energy, depending on what they are rated at. As you can no doubt see, there is a great difference between 12 and 21 per cent efficiency so you need to know exactly what efficiency rating your proposed panels have, and independent evidence to prove it.

How will your new system be connected to the grid?

Your solar installer will generally organise connection to the electricity mains grid for you. It should be simple, but if your meter box or switchboard needs to be upgraded to accommodate solar, this could cause a delay.

If you have not had your meter changed or re-programmed for solar within a month of notifying your electricity retailer, contact them to find out what is causing the delay. If problems persist and you cannot resolve them with your electricity retailer, you can lodge a complaint with the Energy And Water Ombudsman.

Emerging technology


A solar micro-inverter connects to just one solar panel and converts DC electricity generated to AC electricity. If an installer suggests micro-inverters to you, they mean that rather than having a series of panels connected to one inverter, each solar panel would have a separate micro-inverter connected to it. Potential benefits of micro-inverters are that if one panel experiences reduced performance (for example, due to shading), the output of the other panels is not affected. Micro-inverters are more costly to install initially, simply because there are more of them to install per system. Some manufacturers have developed panels with micro-inverters pre-installed. Reading details about the system performance is done through web-based software.

Hybrid systems

A Hybrid solar PV system is grid-connected but also has battery storage. It could be said that this system offers the best of both worlds – if solar electricity ever runs out the grid is there as a backup, which means you can downsize the capacity of battery storage, and yet you can store and use the majority of the electricity you generate rather than feeding excess back to the grid.

Building Integrated PV (BIPV)

Building integrated pholto-voltaics (BIPV) are pholto-voltaic materials that are used in place of traditional building materials in the building envelope. Typical uses of BIPV are as roofing materials, glazing, and facades (the exterior walls of a building). Because the PV capacity is incorporated into the building material, building costs can be reduced because rather than ‘add’ PV on top of the building envelope, it is already part of it.

Glass solar PV

New technology in which solar cells are embedded between two glass panes. Depending on the type of solar cells embedded, the glazing can be either opaque or transparent. The more opaque the glass, the higher the solar efficiency.

Resources and information

Lots to consider? There certainly is – but the good news is that just like many other aspects of sustainability, there are lots of resources available to help you purchase the best Solar PV system for you.

Renew has produced the very useful ‘ATA Fact Sheet - Solar Photovoltaic (PV) Power Systems’(PDF, 192KB)  which outlines the basics about choosing a system, and finishes with a comprehensive set of questions you should ask before taking the plunge.

You can also visit the Clean Energy Council for a useful guide to choosing a solar system and retailer.

Solar Choice allows you to obtain and compare different quotes for installing solar electricity.