All You Need To Know About Solar Power Systems

There are two main types of residential solar systems: a grid-connect installation, and an off-grid installation. Keep reading to learn which type could be suitable for you.
Solar panels on a suburban house

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What is a grid-connected solar power system?

Look out across the roofs of your neighbourhood and you’ll see quite a few houses with grid-connect solar panels.

Grid connected solar power system

Grid-connected systems are the most common solar power setups in residential areas. At least 15% of Australian households have some sort of solar power system installed. That’s the highest percentage in the world by a substantial amount. Belgium is number two with around 7%.

Solar power suburbs in Australia

Solar panels convert sunlight into electricity that then travels via a power converter for use in the home. Any excess power goes back into the main grid.

Energy providers buy this excess electricity at an agreed price (known as a feed-in tariff) from customers. In a bid to encourage the uptake of solar panels, many state governments offered generous subsidised feed-in tariffs. These have since been wound back.

In NSW, for example, some people managed to pay off their installation in a short time thanks to the government rebate scheme. The original feed-in tariff for NSW was 60c/kilowatt per hour, but today, with tariffs now at 5c/kilowatt hour, the gains to be made are smaller. However, you may still be able to save money with a grid-connect system.

It can pay to have solar energy

The state you’re in affects the amount of money you receive as a feed-in tariff. Some states have voluntary tariffs, whereas some states have compulsory tariffs paid by retailers. To receive the feed-in tariff, your system must be within the specified size for your state.

Australian feed-in tariffs infographic

What is an off-grid solar power system?

The second type of solar-power system is an off-grid system. Off-grid solar energy systems offer the prospect free, clean energy for the lifetime of a solar panel system. These days, a solar panel system lifespan is expected to be at least 20 years. But are they worth the investment?

Off grid solar power system

Off-grid systems are commonly used in rural areas when connections to main power grids are either unavailable, or very costly. During the day, off-grid installations power homes using direct sunlight. Excess power is stored in the installation’s battery bank. When the sun goes down, you can use the battery bank to power your home.

When sunlight is scarce, a generator is usually on hand to back up the battery. For years, good-quality storage batteries were thought to be too difficult and expensive to produce. However, these days companies like Tesla have made significant strides towards creating longer lasting batteries.

How much will a battery system cost you?

Battery technology has developed rapidly since the turn of the century. To give you an idea of how quickly the technology continues to evolve, the cost of electric vehicle batteries has dropped 80% in 6 years.

However, batteries can still be on the expensive side. Depending on your needs, you’re looking at an investment of $2,000-$11,000 for a battery.

In the US, WIRED magazine estimated that a 10 kilowatt Tesla Powerwall battery could run an average-sized home for around three hours.

Batteries also output DC (direct current) but most homes run on AC (alternating current). That means you’ll need something called a ‘power inverter’ to convert from DC to AC. Inverters range from $900-$3,000 depending on your needs.

Electric car and energy charger

How much solar do you need?

If you’re thinking about investing in solar power, it’s important to know how much you’ll require to power your home.

A five kilowatt system should be enough to power a medium-sized home. A three kilowatt system should be enough to power a small home.

Keen to add solar to your energy mix? Find out more with iSelect.