7 Basics You Need to Know About Residential Solar Systems in Australia


    Switching to clean energy for powering your home is one of the best investments you can make. A residential solar system can protect you against the ever-increasing energy costs for the years to come while also doing the bit for the environment. If you are considering installing a solar power system in your home, this guide will take you through the basics of residential solar systems to ensure that you pay the right amount of money for the system that is perfect for your home.

    1.       How Do Residential Solar Systems Work in Australia?

    Most of the residential solar power systems in Australia are grid-connected systems without solar battery storage. But you can always select from among three options that work best for your home.

    ·       Grid-connected systems: It allows you to keep a connection to the grid so that you can buy power at night times or when it is cloudy. The solar inverter works hand in hand with grid power to use all the solar energy first before drawing power from the grid. It also enables you to sell excess power back to the grid. Grid-connected systems are widely used because it is not economically viable to disconnect from the grid.

    ·       Off-grid systems: Off-grid solar systems are standalone power sources that comprise PV systems and batteries to provide a 24-hour power solution. As it doesn’t require a grid connection, it’s popular for new construction projects in rural parts of Australia. In such cases, it is economically and environmentally a preferable option because a new grid connection could cost over $50,000. While a standalone solar system with battery back-up will have a large upfront cost of around $25,000, but you won’t need to buy power from there-on through its lifetime.

    ·       Hybrid solar systems: Hybrid systems comprise both grid connection and battery backup. Solar battery storage is used to store energy and reuse it when the system is not generating power. The grid connection is used when your energy consumption is more than what your solar power can fulfill on its own. Solar battery storage offers you the ability to use solar power excellently. However, they do not provide a glorious return on investment considering their current pricing. Given that a modern battery can last for 10 years at most, only one out of 10 households in Australia choose to install a battery with solar.

    Except for the off-grid solar system, residential solar systems operate in one of the two modes.

    ·       Solar energy produced is more than your energy consumption: In this scenario, your solar system is generating more power than your home needs. The surplus energy produced by your system can be sold back to the grid for a rate called a feed-in tariff. Feed-in-tariffs depend on your state and energy retailer. So, if you’re living in Brisbane, AGL may pay you 15 cents per kWh of energy exported.

    ·       Solar energy produced is less than your energy consumption: In this scenario, your home will need to import grid electricity because your solar system is not generating enough power. For instance, your home needs 3 kW power per day, but your solar system is generating 2 kW per day. Then, you will have to pay for that extra 1 kW of energy imported from the grid, although you will save on your electricity bills, nonetheless.

    It should be noted that grid electricity is much more expensive than the exported solar energy, which makes self-consumed solar energy is more than twice as valuable as exported solar energy.

    2.       The Three Main Components of Residential Solar Packages

    Any residential solar package includes these three basic components and since there are plenty of solar brands out there, it is important to pick the best one for your home.

    1. Solar Panels: Usually, solar panels are the collection of 60 or more solar cells that can vary in type and arrangement. The residential-size solar panels have 60/66 cells. There are mainly four types of solar panels—Polycrystalline, Monocrystalline, Half-cut, and Shingled. 

    If you have any kind of shade that looms over the solar panels through the day, half-cut and shingled panels would be a better choice over conventional one. Otherwise, either of the four solar panels would work well on a residential roof. 

    What makes a difference is the solar panel’s brand. While the difference between budget and premium brands is marginal, your choice will determine how much energy output can it maintain over the years and the duration of the product warranty. If you go for high-end brands, solar panel costs can affect your overall budget.

    1. Solar Inverters: Solar inverters come in two flavours—string inverters and microinverters. String inverters are the size of a briefcase that goes on a wall and all the solar panels connect to it. Whereas, microinverters are the size of a paperback book that goes on the back of each solar panel. 

    There is a third option as well called ‘power optimizer’, which comprises a string inverter on the wall and optimizers on each panel. Considering Australia’s harsh weather, you should never mount a string inverter where it will be exposed to direct sunlight. 

    Solar inverters mostly have a lifespan of about 10 to 15 years because they function continuously without a break unlike humans. So, if your inverter fails or gets burnt inside, it will break down your entire solar power system unless there are micro-inverters installed.

    1. Racking or Mounting: Solar module racking or photovoltaic mounting system is the component that fixes solar panels on surfaces like roofs, the ground or building facades. In essence, mounting systems are simply aluminium rails bolted together. There is a vast range of racking brands out there in the Australian solar market. The difference between these brands is some of them are easy to install on difficult roofs.

    3.       Is Your House Right for the Solar Power System?

    Turning to solar is mostly a worthwhile investment, although there are a few house-related factors that may influence the viability of a productive solar system or the cost of solar system installation.

    1. The direction of roof: As Australia lies in the southern hemisphere, a north-facing roof is optimal for solar production throughout the entire day. Depending on the slope or the pitch of your roof, the west or east-facing roof may decline your energy output across the day by about 15% compared to the optimal direction. 

    However, it is not a stumbling stone. You can still choose to install solar panels on east or west-facing roofs if you don’t get paid much for the solar you export and you’re not home throughout the day. You can always oversize the inverter to counter the loss because of direction.

    1. Shading: It is a simple fact that your solar panels will not generate power if your roof is mostly shaded by the big beautiful trees surrounding your house. If some part of your roof gets a decent amount of sun for most of the year, then it is worth getting your property assessed by solar providers. 

    Any solar energy company providing residential solar packages could give you an accurate idea of how much power your system will produce and how much it will be affected by shading.

    1. Type of roof: Installers can mount solar panels on most types of roofs, although some types of roofs are just unsuitable. For instance, it’s difficult to install panels on the slate roof and nearly impossible for fibreglass. 

    The slope of your roof may cost you some extra money. It is dangerous to install panels on a steep roof, which means installers may need special access and safety equipment. Likewise, if your roof is flat or nearly flat, then you will require extra racking to fix panels at a certain angle depending on your location. For any house in Brisbane, the ideal solar panel angle is about 24° from horizontal.

    4.       Selecting Appropriate Solar System Size for Your Home

    You will need to consider your current energy usage and energy goals to answer this question. There are two key aspects you can evaluate for deciding on which residential solar package is suitable for you.

    1. How much electricity do you consume?

    Different households vary greatly in energy consumption according to the number of family members, appliances, spending habits, etc. The best way to understand your home’s energy needs is to review your most recent power bills. Your bills will show your average daily energy usage in kWh and how it changes over months and seasons.

    1. When do you most often use electricity?

    Whether you use electricity mostly during the day or night may very much influence the size of the residential solar system, you need and the best position to install the panels on your roof. This is because you may have to draw power from the grid during a different time of the day except for summer.

    5.       Do You Need Solar Battery Storage?

    Solar battery storage in an ideal condition can reduce your grid use up to 95%. When you’re not at home, it enables you to store excess energy, ready to use when the sun isn’t shining. But these benefits come at an enormous cost. Solar battery storage with 10kWh of capacity will cost around $10,000 without a battery rebate. With a payback period of 15 years, they come with a warranty of only 10-years. If you’re buying batteries only to save money, then it would be wise to wait 2-5 years for batteries to become viable for homeowners.

    6.       Australia’s Solar Rebate program

    In 2011, the Australian government introduced the Small-Scale Renewable Energy Scheme (SRES) to support the uptake of renewable energy in Australia. SRES works by issuing a Small-scale Technology Certificate (STC), which is officially created when Clean Energy Council (CEC) accredited solar installer commissions your system. STCs are available for all Australian residential systems. It is an upfront discount on the purchase of a solar power system that will be claimed by your solar retailer on your behalf. Again, the amount of discount depends on your zone—each postcode in Australia is given a ‘zone’ based on its solar irradiation.

    7.       Residential Solar System Costs and Savings

    1. The price of your home solar depends on a lot of factors, including where you live, what type and size of the system, the products and brands you select and which solar energy company you sign up with. After the dramatic decline in the solar panel cost over the past decade, solar panel costs are now increasing as the price of a key component ‘polysilicon’ has increased by over 300%. As of now, the overall cost of installing a 10kW residential solar system in Brisbane would be around $9,550.
    2. You need to first work out the right system size or solar package for your needs to calculate how much you will save on your electricity bills. You can save money on your bills either by offsetting the electricity that you are buying from the grid or by selling the surplus electricity for a feed-in tariff. As the prices for buying and selling energy are different, it is important to understand your self-consumption for estimating your savings.
    3. Let’s say your average daily energy usage is 20kWh at 25cents/kWh. Now, assuming that your house is in Brisbane and you consume 50% electricity during sunlight hours, you decide to invest in a 5kW residential solar system priced at $4,500, producing 19.4kWh energy per day. You save around $1,004 annually on your power bills and about $240 from feed-in-tariff. If we assume the electricity inflation rate to be 2.50%, your payback period would be around 3.6 years with a 28% internal rate of return (IRR).


    It is essential to have your basics clear before you invest in solar. It is only after you understand the basics you will select the best solar products for your home. To know more about Residential Solar Systems and how to install them,contact us at 1300 856 678, or email us at info@gorunsolar.com.au