So you've decided to go solar, great decision. Solar systems will pay for themselves quickly, protect against rising energy costs and increase your self sufficiency. They're also a big help for the environment, with a 5 kW system saving over 5 tonnes of CO2 per year.
Solar is a long term investment, and it needs to be treated accordingly. Taking a few moments to go through some of the key aspects will ensure your system meets or exceeds your expectations.
A Quick "How They Work"
A solar system is made up of multiple panels and an inverter. Panels are installed on the roof and convert sunlight into DC electricity. The more panel capacity you have, the more power you produce. Panel and system capacity is measured in watts or kilowatts, and is the sum of all the panels. For example, a 16 panel system with 320W panels will produce 5.12 kW.
The solar inverter has two main functions, to maximise energy harvest from the panels and convert the DC power into AC power for your home. The bigger your inverter capacity, the more panels you can have. String inverters are the cheapest and most common, but micro inverters and optimised systems offer more flexibility and produce more energy, particularly in shaded or non ideal conditions. Your inverter is the only part of your system you'll interact with and the one most likely to fail, so if you're going to spend extra anywhere, it's here.
Solar panels are mounted on the roof and convert the sunlight into DC electricity. In our opinion there are three categories of panels, low end, standard and premium. Avoid low end panels. They may do OK out of the box but they're far less likely to survive the test of time, particularly Australian conditions. Standard panels are great if you're looking for something reliable without spending top dollar. Premium panels are available and will outperform standard panels in the long run. They also come with features that may appeal to some solar shoppers.
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How You Save Money
With the exception of some older systems, energy generated by your solar power system will go into your home for your appliances to use first. When this happens, you’re not buying energy from your retailer and saving around 25c per kWh of energy. When you’re producing excess, you can sell it back to your retailer, but in most cases you’re only getting between 6 and 15c per kWh.
You're not purchasing as much energy from your retailer and you're selling back your surplus from your solar.
For this reason, moving your consumption to daylight hours when the solar is generating increases your savings. Production and consumption monitoring devices can help you with this. Installing batteries enables you to store surplus power during the day for use at night, saving the difference between the purchase price and buyback price per kWh stored.
Let’s say your proposed system has a yearly yield estimate of 7300 kWh, which is ballpark for a 5 kW. If you manage to use 50% of the power you produce yourself and you pay 25c per kWh for power, you’ll save just over $910 per year. With the remaining half of the 7300 kWh that we’ve sent that back to the grid, we’ll assume you’re getting 8c for each of these, which amounts to another $290. So our rough calculation shows we’ll save approximately $1200 in a year.
Sizing your system
Your energy bill will tell you what your average kWh consumption is per day, which is a good place to start. You’ll need around 1 kW of solar for every 4 kWh you consume per day, depending on site conditions. Remember that your consumption may be different depending on the season or household changes, so take a yearly look and plan ahead. Given that the price jump to bigger systems isn’t much, it makes sense to lean on the larger side. It also makes sense to oversize your inverter in all cases, but more on that later.
Don't be like Brian
You also need to factor in when you use power. Take Brian for example. Brian’s bill says he uses 12 kWh per day, so knowing that 1 kW will produce 4 kWh on average, Brian settles on a 3 kW system. What he hasn’t factored in is that he uses most of those 12 kWh at night, so his production during the day is cheaply sold to the retailer and then he buys it at night at the normal rate. Brian has what we call low self consumption, which can hurt the economics of a solar project and make sizing systems tricky.
Here’s a few things that Brian could do to increase his self consumption:
Install panels on the west to produce power later in the day
Change his consumption patterns
Install a battery to store surplus production during the day
Install more than 3 kW or oversize his inverter (more on that below)
Brian could have also installed a bigger system to generate more savings with surplus power. Given the buyback rates offered by some retailers, many people with low self consumption have done the maths and have gone solar anyway. Remember too that you have weekends and days off, so there are times where self consumption will be higher.
If you’re uncertain how much power you consume during the day, start taking some meter readings. If you take readings just after sunrise and just before sunset, you’ll get an idea of how many kWh you’re consuming during the day. We even offer a free spreadsheet you can download which will guide you through this.
If in doubt, put a little more on. There are many fixed costs with solar like applications, admin, load up, cabling, electrician call out etc. which are similar regardless of system size. For these reasons, bigger systems are usually cheaper per kW. There’s been many more people regret going too small than too large, particularly at today’s prices.
Your system will rarely achieve more than 85% of your panels peak power output, even with a premium panel. Note we’re not talking about your system yield in kWh, we’re talking about peak power output. If you want to know why this happens and more about panel production, check out our blog post Panel Production Explained. Since a 6 kW system will rarely exceed 5 kW, we strongly recommend putting more panel capacity than inverter capacity. We call this oversizing. More reasons to do this include:
Network limits are normally on inverter capacity, not panels. This is a way to get more out of it, and ensure your expensive inverter will actually be working to its capacity, starting earlier and finishing later.
It's frustrating watching your 5 kW inverter rarely exceeding 4 kW of output. Adding panels later to fix this is difficult, particularly as changing standards require retrospective upgrades. You’re also paying those fixed costs again.
The cost difference between a 6.5 kW and 5 kW, both on a 5 kW inverter is small. The installers are already on site, panels aren’t expensive and they generate 30% extra STCs.
All good solar inverters comfortably handle more panel capacity. If in the middle of a nice summer day your panels do produce more than your inverter can output, the extra power is ignored by the inverter in an effect called “clipping”. There is a 133% oversizing limit imposed by the Clean Energy Council, our governing body. So under this ruling, a 3 kW inverter is maxed out to 4 kW of panels and a 5 kW inverter is maxed to 6.66 kW of panels. You should make the most of this.
Use More than one Orientation
A clever approach is to incorporate multiple orientations with your solar panels, typically two. This widens your production curve. It also staggers the peak production of the panels a little bit, which lowers the peak output and prevents a bit of clipping on oversized systems. While north panels produce the most, having panels on the west is also a good idea, as most families use more power in the afternoon. Western panels produce the bulk of their power in the afternoon, so there's a better chance you'll use it yourself, which saves you more money. East and west panels will only produce around 15% less than north panels over the year.
For going solar, you will receive a point of sale discount thanks to STCs. STCs are a tradeable item, worth between $25 and $40 each. The number of STCs you get are calculated by a set formula. System size and installation location has an impact on this, so a bigger system will get more. Also, the same size system in Darwin would get more than in Melbourne. Everyone is eligible, even if you’ve had a previous solar rebate or STCs. You don’t have to pay the total cost inclusive of STCs and claim it back yourself, almost all solar retailers trade their STCs and deduct it off the price for you. Here are some key things about the STC discount:
You’ll have to sign the STCs over to the solar retailer on installation day.
In most Australian cities, you’ll get $2,100 for a 3 kW and $3,500 for a 5 kW. Melbourne and Hobart a little less, Darwin and Alice Springs a little more. We’ve used $37 for the STC value here, so if you want to know how many STCs this is, divide the amount by $37.
The STC discount is slowly being phased out by 1/15th for each year after 2016. Don't be tricked by solar retailers saying the rebate is ending, which some try towards the end of the year.
It’s technically a discount, not a rebate.
Our advice is to put the STC discount aside and focus on your net price. When you’re shopping around, you can assume that all advertised and quoted prices are after the STC discount has been applied.
Choosing your Solar Retailer
All solar retailers will tell you they only do quality installations, are highly experienced and respond quickly to issues. You just can’t believe them. Your retailer is important, and we’ve seen many things go wrong with poor quality retailers, including:
Systems installed in sub-optimal locations or wiring configurations
Delays or changes with the installation or cost, not discussed at sign up
Poor workmanship and incorrect handling of components
Poor quality smaller components, like cabling, DC isolators, racking, breakers etc.
Retailers are your point of call for all system issues and warranty claims, and even good installs and components have them. Many customers have waited months for simple things like inverter swap over, roof leaks or even commissioning. Some have had to go elsewhere for these basic things. Good retailers know which products to use, are setup for post sale issues and set correct expectations at the point of sale. Here are some pointers to help you find a good retailer:
Look at independent online review sites, like Whirlpool, Google and ProductReview for feedback on how previous customers have fared.
Some companies have been in business for many years, but have done next to no solar installations. Quantify experience and ask your retailer how many they’ve done.
Look at independent quality certifications, like Quality ISO 9001 or CEC Approved Solar Retailership, which is different to the CEC Certification all installers require.
Retailers that are patient, knowledgeable and tailor your solution from a wide range of products.
Monitoring Your System
Don't have to check it every day, but Every so Often-ish
Most inverters come with a little green light to tell you everything is OK, so keep an eye on it. This is one of the reasons we recommend putting the inverter somewhere you walk past regularly. Remember that at the start and the end of the day that light might go orange or blink - this is normal. If positioning your inverter in an area you see regularly is not possible, we recommend setting up online monitoring. Online monitoring is great either way, because it stores your production data in the background and it's always there if you want it.
If you don't have online monitoring, it doesn't hurt to check your overall yield. Write down some readings on your inverter (date and kWh), or just take a photo of it on your phone - that records the date for you anyway. Remember you don't monitor the system by looking at it's peak output, as a cloud might come over and it wouldn't be an accurate reflection. You monitor it by checking your yield in kWh. Your yield should match the yearly yield estimate given to you by your solar retailer. It's poor practice by the retailer if they haven't provided a yield estimate on the quote. Better quotes will break this down into monthly estimates, which makes it easier to check throughout the year.