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Solar Panels 101 | All You Need to Know About Solar Systems

Solar Panels 101 | All You Need To Know About Solar Systems

So, I hear you’re looking into solar panels but don’t know where to start. Well, you’re in the right place because, today, I’ll be going through all the basics.

This includes discussing how they work, its parts, the savings you could get, and everything between.

I urge you to read this from the top if you’re completely new to solar panels. But, if you’re looking for specific information, go ahead and tap on the topics below to head straight to their sections.

How do solar panels work?

An infographic that displays a step-by-step guide or process of how solar panels work.
An illustration that displays a step-by-step process of how solar panels work.

Solar panels work by gathering photons (light particles) from the sun and using that to generate electricity. 

These photons knock electrons from their resting state which sends the electrons scrambling. This movement is what generates DC electricity that your system then converts to the AC electricity that you and I use for our appliances. 

All this is possible because of the photovoltaic effect. If you’re looking to dig deeper into the science behind solar panels as well as the step-by-step process on how they work, here’s our in-depth explanation on how solar panels work

Moving on, you might be asking: 

Do solar panels work at night, in the shade, and when it’s snowing? 

Given that solar panels depend on sunlight to work, your system can’t gather as much light in these conditions.

But, nighttime, cloudy, and snowy conditions don’t mean you can’t enjoy solar panels. After all, there are ways for you to store the solar energy that you generated when the sun was shining, but more on that later

Moreover, these conditions are temporary, especially in sunny Australia. Night turns to day, the clouds move over, and the snow melts away pretty.

For your benefit, here’s what happens with your solar panels at night, in the shade, and in the winter:

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The different parts of a solar system

Now that you have a general idea of how solar panels work, it’s time we talk about what makes the entire system work. 

Solar systems are made up of the following parts: 

  • Solar panels
  • Solar inverters
  • Mounting
  • Batteries (optional)

Solar panels

Needless to say, solar panels are rectangular things that are mounted on roofs (most commonly) or on the ground. What you likely didn’t know about solar panels is that they’re made up of solar cells and that they come in different types.

Solar cells (or photovoltaic cells) are the mini-rectangles that line up to make the entire solar panel. These PV cells are what make it possible for a solar system to absorb photons that become electricity.

Types of Solar Panels, Monocrystalline, Polycrystalline, Passivated Emitter and Rear Cell (PERC), Thin-film
A diagram visualizing the various types of solar panels commonly utilized today.

The types of solar panels include the following: 

  • Monocrystalline – Most durable but also the most expensive. 
  • Polycrystalline – Less efficient than monocrystalline but also more affordable. 
  • Passivated Emitter and Rear Cell (PERC) – More efficient and more space-saving than monocrystalline solar panels but more expensive.
  • Thin-film – Less efficient than the other types but they are also the most lightweight and, thus, the easiest ones to install.

Of course, there’s more to these different types. But, from a consumer’s standpoint, the descriptions I included should cover the gist of what you need to know.

Having said that, we have a complete article on choosing the best type of solar panel for your home if you want to read more about it.

Solar inverters

Solar inverters are what’s responsible for converting the DC electricity from your solar panels to the AC electricity that you and I use.

DC electricity only travels in 1 direction whereas AC electricity travels back and forth. DC from your solar panels flows through an inverter that rapidly switches the flow of the current. This creates the now usable AC electricity that powers your appliances.

Examples of solar inverters in Australia depicted through illustrations.
Examples of solar inverters in Australia depicted through illustrations.

Like solar panels, there are also different types of inverters:

  • String inverters – These convert DC to AC electricity from many solar panels that are wired together in a “string” (or series) circuit. It’s cheaper but can be less efficient. 
  • Microinverters – These inverters are attached to individual panels. So, they also convert electricity from a per panel basis rather than together as a series. They’re more expensive and harder to install but can be more efficient. 
  • Power optimizers – Think of these as string inverters with optimizers attached to every panel. The optimizers give your system the monitoring capabilities and efficiency of microinverters with the ease of installation of string inverters. This makes them cheaper but also costly to repair.

Again, there are more pros and cons to these inverters that you should consider before making your decision. We talk more about the different types of solar inverters in another article but what’s mentioned above are the main differences.

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Mounting

Solar mounts are pieces of metal (stainless steel or aluminum) that secure your solar panels to your roof or on the ground.

An infographic that illustrates the three components of solar mounts, including roof attachments, module clamps, and mounting rails. Solar mounts are pieces of metal (stainless steel or aluminum) that secure your solar panels to the roof or ground.
A representation of the three components of solar mounts, including roof attachments, module clamps, and mounting rails.

Roof mounting is the most used option in Australia and typically comes in 3 parts:

  • Roof attachments – These are drilled into your roof and act as the base of your entire system. Depending on the type of roof you have, these attachments can be different materials. 
  • Module clamps – These are the pieces of metal that link your roof attachments to the mounting rails. Like almost anything with solar systems, these come in different shapes and sizes. 
  • Mounting rails – These are what connect your solar panels to your mounting system and to your roof.

Batteries

And, last but definitely not least, a solar system may or may not come with solar batteries. 

Solar batteries are added or installed alongside the rest of your system to make it capable of storing excess energy. This makes it great for blackouts, using solar energy at night,  maximizing your savings, and other things that I’ll talk more about in a bit. 

If you’re interested in batteries, though, you need to look out for a few factors but the main things are:

  • Storage capacity – Or how much electricity the battery is capable of storing. 
  • Power rating – This measures how much power the battery can put out. 

Together, both of these factors will tell you what appliances you can run through these batteries, how many of these same appliances can be run at the same time, and for how long. 

Other factors include roundtrip efficiency, safety, lifespan, and others but we’ll save that for a different, more in-depth article about solar batteries

Now, given that solar batteries are an optional part of your system, you might be asking: 

Solar batteries – Do I need them? 

Well, that depends on many things. But, ultimately, it comes down to your budget.

What I will say, though, is that batteries solve many problems. This includes saving you the most amount of money over the long term. So, if all that matters to you is maximizing the amount of money you keep in your pocket, I recommend them.

But, if you need a little more convincing…

Recommended solar batteries in Australia that are considered among the best options available.
Some of the top-rated solar batteries available in Australia that are highly recommended.

The benefits of having solar batteries: 

You will still have power whenever there’s an outage. 

As batteries make it possible for you to store the solar energy that you don’t use, power outages can be a thing of the past for you. 

Imagine all your neighbors lighting candles and fanning themselves while you have your AC on full blast and lights on all your rooms. That would be an experience, eh? 

You will still get to have solar energy even at night. 

Solar panels can only generate electricity if there’s sunlight. This is why many people with solar systems still rely on the grid for power when the sun goes down.

The grid normally charges more at night as they know you use most your electricity during this time.

With a battery, though, you’re capable of using the excess power you generated during the day. Mind you, you can still buy power from the grid if your battery runs out of juice. You don’t rely on it as much, which brings us to the next benefit.

You won’t be as reliant on the grid. 

Depending on the size of your system, your battery, and your usage patterns, you may not even have to use electricity from the grid at all.

I’ve seen more and more people who now owe the power companies nothing because they incorporated batteries into their system. This is especially true now that the price for batteries have gone down compared to the last decade.

Batteries curb the cost of peak electricity charges. 

Like many others, Australia has begun using Time of Use (TOU) tariffs. What this means is that there are peak hours where electricity is more expensive, off-peak hours where it’s cheaper, and shoulder hours that sit between. 

This doesn’t apply to everyone as not everybody has meters capable of this. But, if it applies to you, solar batteries can help you reduce your quarterly power bills by allowing you to use your own electricity during peak electricity hours.

Batteries save you more money than feed in tariffs

Another type of tariff that you will experience when you use renewable energy sources like solar power is the Feed in Tariff (FiT). This tariff is the power companies paying you for feeding your excess solar electricity back to the grid.

Unfortunately, the value of FiTs have gone down compared to the price of buying electricity. So, using as much of your self-generated electricity is the way to maximize your savings.

You can charge your electric cars for free

Imagine having a full tank of gas every day and not having to pay a single dime. What a life that would be. 

Well, that’s more than possible when you have solar batteries collecting all the excess energy your panels generate. 

Just plug in your electric vehicle every time you get home and forget about it. The next morning, you should have a car with a full tank of “gas” waiting for you to step on the accelerator. 

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Benefits of using solar power

At the end of the day, batteries are an optional part of a solar system in spite of its many advantages. Regardless if you have a battery or not, however, using solar power still comes with a hefty list of benefits. 

Here are some of the best ones: 

  • Solar power is now cheaper than ever
  • You can make use of Australia’s many incentives for renewable energy
  • The cost to maintain solar panels is close to zero
  • Modern solar panels are rated to last at least 25 years
  • Modern solar panels are more efficient than previous iterations
  • Having a solar system in your home supercharges its property value
  • The manufacturing of solar panels has a significantly less carbon footprint than burning fossil fuels

If you want to read more about the benefits of solar panels, we have another article dedicated to exactly that. 

Your potential savings if you use solar panels

Before anything else, allow me to assume that we’re talking about the average household using an average size solar system (which is 6.6 kW, by the way). In this case, you could save around $1300 per year which shaves off at least 87% of your annual energy bill.

That said, there’s no way of telling exactly how much money you can save. After all, there are a lot of factors that need to be accounted for.

If you want us to explain these factors, you can find all that here. For now, though, here are approximate savings you can get from differently sized solar systems:

Your Potential Savings If You Use Solar Panels
A table illustrating the potential cost savings achievable through the use of solar panels.

Solar panel rebate – What is it?

Solar rebates in Australia are called Small-scale Technology Certificates (or STCs for short). You can get these certificates whenever you have solar systems installed, but there are a few easy eligibility requirements you have to fulfill:

  • Your installer needs to be CEC accredited. 
  • Your system has to be less than 100 kW.
  • Both your panels and inverters have to be approved. 

The first and last are part of why installers are so crucial to this process but I’ll talk more about that in a bit. 

Circling back…

Your rebate depends on the number of STCs you’re eligible for as well as the current value of STCs. 

How many STCs you’re eligible for is determined by these 2 things:

  • The size of your system
  • Your deeming period

You can worry yourself about all that if you want to but here’s a free STC calculator that the Australian government provides to make life easier. 

On the other hand, the value of STCs changes from year to year. As of right now, the value of STCs is at $39.95. So, if you were looking to install a 10 kW system and you were eligible for 100 STCs, you’d have a rebate of $3,995. 

table of Rebates Depending on Number Of STCs
A table displaying the amount of rebate for a 10 KW solar system with 100 STCs, depending on the varying values of STCs.

If you want to check the current value of STCs, Green Energy Markets is a good place to go. 

So, now you have STCs. What’s next?

There are 2 routes that you can take:

  • You can “surrender your rights” to your STCs to your installer and get the total value of your certificates deducted from your final quote, or
  • You can hold on to the STCs and trade them yourself. 

The first route is what most people default to and it’s also what I recommend. It’s easy, it’s quick, you pay less upfront, and you don’t have to worry about it afterwards. 

The 2nd route, trading STCs yourself, is a bit more complicated. There are a bunch of steps involved but, all in all, you either trade them in the open market using the current value of STCs or you trade them in the clearing house where the value is locked at $40. 

The clearing house looks tempting because STC prices generally fall under $40. But, it takes years, if not forever to get your money. There are also a bunch of processes you have to go through before you get access to the clearing house. It’s all a big fuss but if you want to go through all that for potentially larger savings, go for it!

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What system is best for my home?

Well, that depends on what you want out of your solar system. Here, you have 3 choices:

  • Grid-connected
  • Grid-connected with battery
  • Stand-alone

Let me break them down for you. 

Grid-connected solar

A solar system that’s also connected to the grid is currently the most common type used in Australia. The biggest benefit with this system is that if your solar panels can’t produce enough power (e.g. at night), you can still use power from the grid. 

But this goes both ways. If you have any excess energy, your system feeds it back to the grid for everyone else to use. In this case, you get paid a feed-in tariff.

This system requires a smart meter, though. It measures all the electricity that goes in and out of your home. This data is then used by the power companies to calculate your quarterly energy bills and feed-in tariffs. 

Grid-connected solar with a battery for storage

While not as common, it’s definitely on the rise, particularly because batteries have become cheaper while the value of feed-in tariffs have generally become smaller.

You will be less reliant on the grid with this type of system. You can run your appliances through solar energy during the day, store all the excess in a battery, and use that same energy at night.

But, if you ever need power from the grid, you still can.

Stand-alone solar systems

Stand-alone solar systems are not at all connected to the grid.

This is the most extreme way to make use of a solar system but, to some, it’s necessary. A good example would be people whose homes are in remote areas where power companies can’t reach.

But there are also people who choose this route because they’re sure they won’t use the grid. These are homes that either consume very little electricity or those with systems that are large enough to run their entire home off of solar power.

That said, batteries are a must in these systems. You may also choose to buy diesel or petrol generators for back-up, or use other renewable sources of energy like wind and water.

Other than that, you also have your roof to consider. Ask yourself these questions: 

  • Do you have enough space on your roof? If ground-mounting isn’t an option, your roof also puts a limit to the size of your solar system. 
  • Is the place you want to mount your solar system in a shaded area? Solar panels are less efficient when they’re shaded or covered in dirt and other debris.
  • What material is your roof made of? Roofs and solar panels often go hand in hand. Some materials last longer, are more expensive to replace, and are more difficult to mount solar panels on. 
  • What angle is your roof on? What direction is it facing? How your solar panels generate electricity is also affected by its orientation. 

We have a full article on what orientation your solar panels should face in Australia. But, in general, north-facing solar panels produce the most amount of electricity.

How much do solar panels cost?

A graph showing Estimated Cost Of A Solar Energy System Installation in Australia
A graph depicting the projected costs of installing a solar energy system.

On average, installing solar panels would cost you around $1000 per kilowatt. 

So, if you wanted to install a 10 kW system, expect to spend anywhere around $10,000. This estimate, of course, includes rebates and taxes. This estimate is also for mid-to-high tier solar panels (which I will talk more about in a bit).

But, like many other things, that price also depends on many other things. For example, it could be lower or higher depending on the brand you choose, the type of solar panels you want, the size of your intended solar system, where you’re located, and a few other things.

That said, I recommend getting quotes from an installer you can trust. This brings us to the next section.

How to choose a solar installer

For so many years, the solar industry has suffered from a terrible reputation. This is fueled by cowboy installers that use cheap products and don’t install systems properly.

But, trust me when I say that, given the same brands and types, the efficiency and durability of any solar system is largely determined by its installation. Hence, why you should choose a worthy installer.

Here’s what you should do and look out for when choosing a solar installer:

Get multiple quotes. Always. 

It’s crucial that you don’t rely on one person’s estimation, especially since you will be investing thousands of dollars.

Apart from the price differences, different installers will also have access to different things, including brands, materials, and maybe even discounts.

This is where we can help. We have a network of pre-vetted installers all around Australia. We trust them with our own systems, so we’re sure that they’re honest and skilled professionals. Whenever you’re ready, we can get you 3 FREE quotes from them right away.

Get an installer that’s CEC accredited. 

The truth is anybody can learn to install solar panels off of videos on Youtube. But, really, you should hire an installer that’s CEC accredited.

The CEC, or Clean Energy Council, regulates both accredited installers and retailers in terms of their practices. Rather than hiring some random dude you found on the internet, the CEC’s regulations help ensure that you receive products and services that are up to par.

Plus, only CEC accredited installers get you rebates. So, you’re saving money, too.

Ask for the terms of their warranty.

This applies to both the individual parts of your solar system as well as the workmanship. 

For parts, look for a warranty that says your solar panels are guaranteed to function at 80% capacity for at least 25 years. The higher those numbers, the better but these are industry standards. Also ask if the company has offices in Australia. It’s much easier to to talk to support if a problem comes up.

For workmanship, find an installer that offers a warranty for the repair and/or replacement of faulty equipment used in the installation. Labor should also be part of this warranty. The time frame of the warranty is different for every installer, however, but I recommend finding one that guarantees their services for at least 5-10 years. 

Ask if they provide on-site estimates and if you can cancel on the day.

Quotes can be very precise but, let’s be honest, many times installers will also change their prices when they see your place. This is not your fault and neither is it the installer’s. It’s just something that happens. 

That being said, this brings up the importance of on-site quotations. Plus points to installers who do this before you commit to their service. 

But, if you have already committed, it’s only fair that you have the option to back out if there are any changes to the plans and design. 

Look for an in-house install team.

 Many times, solar retailers will outsource their installations to subcontractors. Unfortunately, many of these subbies don’t put as much care and effort into their service.

Of course, this doesn’t apply to all subcontractors. There are still those that perform superb services. But, in general, I highly recommend securing an in-house team to do your installation. 

Ask around for the installer’s reputation. 

Do they leave a mess after they’re done? Do they do a good job of hiding cables and installing inverters in good spots? Do they try to sell cheap panels to make a profit? Do they overprice their panels? 

You need to ask the above questions about your installer. The better their reputation, the more likely they are to do great with your system, too. 

The best solar panel brands for all budgets

Top-rated solar panel brands that cater to different budget ranges in Australia which includes Canadian Solar, Trina Solar, Sun Power Solar, REC, Jinko Solar and Q Cells.
Our suggestions for the top solar panel brands suitable for various budget ranges.
  1. SunPower – Best overall
    1. PROS: As of right now, their Maxeon line of solar panels leads the industry in both efficiency and warranty (40 YEARS!). Hands down the best solar panels money can buy. 
    2. CONS: Their efficiency and durability comes at a very steep price. 
  2. Canadian Solar – Very close second
    1. PROS: Their solar panels have maximum power outputs and efficiencies that are comparable to SunPower. Their product warranty lasts 25 years which is the industry standard, but they also have a 30-year performance warranty. Quite affordable, too. 
    2. CONS: Slightly less efficient than SunPower. 
  3. REC – So close, it went down to a coin flip
    1. PROS: Their Alpha Pure solar panels are only slightly less efficient than Sunpower and Canadian that, really, it’s almost nothing. They’re also rated to maintain 92% of their power output in 25 years which ties SunPower but these are more affordable. 
    2. CONS: Slightly less efficient and with slightly less maximum power output compared to SunPower. 
  4. Trina – Best budget option
    1. PROS: One of the largest solar manufacturers in the world. Highly recommended by Australian installers for budget systems that still have similar power outputs and efficiencies to their more pricey counterparts. 
    2. CONS: Their best solar panel is still slightly less efficient than the above brands. 
  5. Q-Cells – Runner-up for best budget option
    1. PROS: Q-Cells’ Q.Peak Duo ML-G10+ is about as efficient as Trina’s best panels. However, Q-Cells’ version has a lower maximum power output. 
    2. CONS: 86% of its maximum power output is guaranteed for 25 years. While that’s still super impressive, it’s inferior to SunPower and REC’s 92%. Also, their best residential panels have a slightly lower maximum power output compared to Trina and the above options. 
  6. Jinko – Competitive but falls short on their warranties
    1. PROS: Jinko makes solar panels that are just as powerful as SunPower, Canadian, and REC. Their efficiencies are also impressive, especially given their affordable prices. 
    2. CONS: While still a good investment, many of their solar panels have warranties that are shorter than 25 years. One even only has a 12-year warranty. 

Avoid the following popular brands (for now):

  1. LG – LG solar panels used to be at the top of the industry. In fact, they were right up there with SunPower. But, for some reason, they stopped manufacturing their solar panels this year so it’s not a good idea to invest in them anymore. 
  2. Longi – Longi also used to be right up there with Trina, Q-Cells, and Jinko as a top value-for-money brand. Recently, however, the frames of their newly manufactured solar panels have been more flimsy. 

For further reading: The most efficient solar panels in Australia

Financing

If you don’t want to pay in full upfront, there is always the option of financing

Like anything else that’s financed, however, there is always a catch. I’ll do my best to outline both the pros and cons of each of your financing options and leave the final decision up to you. 

1. Personal loans

Personal loans are perhaps the most straightforward of all your financing options. You find a lender, they lend you money at a fixed interest rate, then you use that money to pay for your solar installation. 

The good thing about this financing option is that you have the same buying power as someone who’s buying cash. This, in turn, could net you a cheaper bill if you play your cards right. 

Getting approval for personal loans is also easier than green loans, another financing option. It does, however, typically come with higher interest rates. You also need a good credit score. 

2. Green loans

Green loans are, really, just personal loans that are offered by institutions who care for the environment – which, to be honest, isn’t a lot. 

What makes this better, though, is that it generally comes with lower interest rates and fewer fees. If you don’t have your own cash to pay upfront, green loans should definitely be on the top of your list. 

However, approval for green loans is also significantly tougher. And, like personal loans, you also need a good credit score. 

3. Adding solar to your home’s mortgage

What’s great about simply adding the cost of solar to your home’s mortgage is that interest rates are currently pretty low. Plus, you could potentially save more money from lower power bills relative to the added debt. 

However, in total, you could also end up paying significantly more for your solar system if you take your time paying off your mortgage. 

Before taking this choice, I highly recommend you compare the price difference between your total mortgage and other financing options. 

4. Solar leasing

Otherwise known as rent-to-own solar, there are 2 big advantages to solar leasing:

  • You don’t have to pay an upfront cost, and
  • You can start enjoying smaller power bills as soon as your system is installed

However, solar leasing also comes with numerous disadvantages. For one, you don’t actually own the system until you’ve fully paid it off. 

Also, the interest rates can be tricky. It’s supposed to be low on paper but the prices are generally marked up, so you end up paying more. This also means you save less money over your system’s lifespan. 

I would only recommend this option if you’re planning to install a large system where your savings significantly outweigh the cost. 

5. Power Purchase Agreement (PPA)

Like solar leasing, the biggest advantage of a PPA is that you don’t pay anything upfront. Here, a solar retailer installs their panels on your roof for free. All you have to do is pay for the power the system generates at a rate that’s much less than what the grid charges. 

The catch is that the company technically still owns the solar panels. Typically, there’s also a minimum amount of energy that you have to buy. So, whether or not you use all the energy, you still have to pay the minimum fee. 

Hence, why I would only recommend this if you’re going to use a lot of power during the day or have a large enough battery to store the excess. 

6. Interest-free loans

And last but not least, interest-free loans have been getting a lot of attention lately – and rightfully so. It’s typically marketed along the lines of the following:

  • “no upfront costs”
  • “Straight monthly payments with zero interest”
  • “Buy now, pay later”

The approval rate is also much, much higher here and you generally don’t need a good credit score either. 

But, the truth is that it’s too good to be true. 

If you do the math, you actually pay so much more for your system. The quote your installer will give you will also be marked up by as much as 25%. Possibly even more. 

For example, let’s say a 6.6 kW solar system costs $6600 in cash. With these interest-free financing options, however, that quote could go north of $8000. Ultimately, only consider this as an option if you didn’t qualify for both personal and green loans. 

Get 3 Solar Quotes From Quality Local Installers.

So, you have solar panels. Now what?

Now you enjoy the benefits of producing your own electricity and not be as reliant on the grid. This includes lower, if not zero power bills and a positive impact on the environment, among other things. 

That being said, I do have a few recommendations about what to do from here:

Keep all your receipts.

This includes receipts for your solar panels, your inverter, a battery if you added it to your system, as well as the installer’s receipt. 

A good installation isn’t likely to break down easily but, in case it does, you will need those receipts to claim your warranty. 

Monitor your system’s stats. 

This can be done from an app on your phone, a website, or even directly from the inverter. 

While not necessary, I highly recommend this so know how much energy you’re generating on different weather conditions, how much you’re using, and how much electricity you’re still importing from the grid. 

Once you get a rough idea of these numbers, large changes can signal you that there might be something wrong with your system. 

Set some money aside for another inverter. 

Compared to solar panels with lifespans of over 25 years, inverters have shorter lives of roughly 10 years. 

So, set aside some money from the savings you’re going to enjoy for a future inverter replacement. 

Keep your solar panels clean. 

Truth be told, you likely don’t have to clean your solar panels. Rain and gravity do all of cleaning most of the time. 

However, if you installed your panels in a place that makes it easily catch dust, debris, foliage, bird droppings, or anything else that might block sunlight, you might just have to clean your panels every once in a while. 

All you really need is a hose and running water but if you want to read more about cleaning solar panels, we have that for you right here