If you’re looking to join the more than one million households and businesses in Australia that use rooftop Solar Panels, you have a lot to think about. Indeed, going solar can be quite daunting; the choices can be both complex and overwhelming. Say hello to our ultimate buyer’s guide to solar panels. In here we have distilled everything you need to know about solar panels in one comprehensive guide.

Table of contents

  1. The history of solar panels
  2. How solar panels work
  3. Different types of solar panels
  4. Storing and converting solar power
  5. Solar panels at home
  6. The cost of solar panels
  7. Solar as an investment
  8. Choosing the right installer
  9. Government incentives and grants
  10. Frequently asked questions (FAQ)
  11. References and links

1. The history of solar panels

Solar energy is fundamental to the existence of humans and almost every living organism on Earth today. Living creatures have used it for 3.4 billion years, and the plants we rely on today have been photosynthesising for the last 423 million years, storing solar energy and releasing valuable oxygen in the process.

However, as well as fuelling the plants we eat, direct sunlight has been a useful tool for mankind for many thousands of years. For example, the ancient Greek scientist Archimedes is said to have used giant mirrors to magnify sunlight and set fire to enemy ships besieging the city of Syracuse.

In the 1st to 4th Century A.D. Roman baths used large south-facing windows as a method of heating, allowing light energy through whilst trapping heat. This principle inspired Horace de Saussire to invent the Hot Box in 1767. This device was essentially a small solar oven with reached temperatures upwards of 100 degrees Celcius. It allowed people like astronomer Sir John Herschel to work outside, cooking food in their solar hot box.

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“Someday, some usefulness might be
drawn from this device. For it is quite small,
inexpensive, easy to make.”

–Horace de Saussure, 1700s

Several inventions followed, but it wasn’t until the late 19th century that John Ericsson invented the first solar-powered heat engine.  Building upon Ericsson’s work, by 1913 Frank Shuman (who is also called the “father of solar energy”) had built the world’s first solar power station, which heated water to produce steam. His 70 horsepower machine was used to pump 100 gallons of water a second from the River Nile to irrigate surrounding cotton fields.

“We have proved the commercial profit of sun power
in the tropics … after our stores of
oil and coal are exhausted the human race
can receive unlimited power from the rays of the sun.”

— Frank Shuman, 1916

Fast forward to the 1930s and the photovoltaic revolution was underway. Discoveries by scientists like Albert Einstein and Edward Becquerel led to the realisation that we could use sunlight to generate electricity directly. It wasn’t until 1941 though that Russel Ohl, a researcher at the AT&T Bell Labs, developed and patented the first viable solar cell. By 1954, a 6% efficiency silicon solar cell was invented. This led to speculation that we would one day harvest “limitless energy from the sun”!

2. How solar panels work

Solar cells are composed of so-called semiconductor materials (normally silicon), which have unique properties that allow them to generate electric energy through the photovoltaic effect. These materials are purposely contaminated with impurities of a different material to create either a deficiency (P-type) or an excess (N-type) of electrons. In a solar cell, these two types are sandwiched against each other ina  so-called PN-junction to force freed electrons to move in a specific direction, thus creating a current.

Step 1: light hits the solar cell. When light hits the solar cell, electrons that are normally ‘tied up’ in the so-called valence band absorb solar energy and escape.

Step 2: electrons escape. When the electrons escape the valence band, they become ‘free’, but due to the nature of a solar cell are forced to flow in one specific direction. This forces the electrons to build up on one side of the material, giving rise to a charge imbalance or voltage across the cell.

Step 3: electrons flow through a circuit. Both sides of the cell are connected via an external circuit, which allows the accumulated electrons to flow back to the other side. We now have a direct electric current (DC) which we can use to charge batteries.

Step 4: current is used or converted. The electrical current generated by a solar cell can be directly used to charge a battery. If we want to feed solar energy back to the grid though, it is fed through an inverter, which transforms the current into an alternate current compatible with the power grid.

Step 5: electron returns to the solar cell. Ultimately, the charge is balanced by electrons returning to the solar cell. The process now repeats.

3. Different types of solar panels

There are a few major types of solar panel and it can seem quite daunting if you’re trying to work out which one is right for you. Different types can have different efficiency ratings, sizes and costs, but the best way to think about it is that whatever type you go for, if it’s a 3kW system, it’ll generate about 3kW, regardless of what it’s made of. Based on that logic, a more efficient 3kW solar panel will be smaller than a less efficient 3kW solar panel as it needs less sunlight to generate those 3kW.

So what are the main types?

Monocrystalline and polycrystalline are the main solar cells used on houses. Similar in cost, efficiency and functionality, they do have a few differences. The most obvious is how they look and this is probably the biggest concern for people putting solar panels on their roofs [15].

Monocrystalline (mono)

Probably the better choice if you’re lucky enough to have bright sunlight shining directly onto them, because the crystalline silicon bars inside the solar cells are all aligned in one direction – you’ll get great efficiency in bright sunshine from the right direction. Because of the uniform alignment of the cells, mono solar panels appear quite dark as they absorb most of the light shining on them. Small diamond shapes are visible on mono panels because of a coating which directs more light to the cells.

Polycystalline (poly)

These are made from the offcuts of the silicon bars used in the mono solar cells. Each cell contains several pieces of pure silicon crystal and as a result these crystals aren’t aligned so uniformly. This makes them slightly less efficient in really bright sunshine, but slightly better for dull conditions or when the sun isn’t shining directly on them. You can see the difference between mono and poly solar panels; polys usually appear bluer as they reflect a little more light. They also lack the diamond pattern as they don’t divert light the way monos do.

Thin Film

You might have looked at hundreds of thin film solar cells but that doesn’t mean you’ve ever seen one. As thin as a human hair [16], flexible, and fixable to glass windows that remain semi-transparent. Thin films are second generation solar cells – whilst they’re currently much more expensive than monos or polys they are developing to be more efficient than polys, being used in some of the world’s largest solar power plants [15].

If production costs decrease like they have with the first generation, we might see thin film cells on office windows worldwide, powering the offices directly and more efficiently than a national grid. At present the cheapest materials for thin film cells are copper indium and cadmium telluride, but super-thin silicon based cells are a close third [17].

Gallium Arsenide & other advanced technologies

Multi-layered, multi-junction third-generation solar cells are the pinnacle of solar technology, driven by space science. NASA say it costs $22,000 to put 1kg of technology into orbit [18], so being light and efficient saves millions of dollars. Highly efficient Gallium arsenide based solar cells power most of our satellites and the rovers currently exploring mars – they can regulate their temperatures using fibre optics [19] and even recycle solar energy [20] but are currently far too expensive for most other uses.

4. Storing and converting solar power

Once the power is flowing from a solar panel it needs to be stored or used efficiently to minimize wastage. The energy may be used to charge batteries, especially on commercial solar farms. This is a growing area of research and it’s hoped that solar energy will soon provide power for us at night and in cloudy weather, by storing extra energy generated during very sunny periods [21].

Instead of charging batteries, most domestic solar energy users connect to the national grid to sell the energy they produce and enjoy government benefits – see Part 7 of this guide. To do this, we use inverters (usually supplied and installed with solar panels) to convert the DC electrical current, that solar panels generate, into AC current. AC is used by the national grid and most home appliances, so inverters are an essential part of almost all solar power uses.

Should I connect to the grid or use the energy myself?
You can choose whether or not to connect to the national grid; the majority of household solar panel owners do connect. Being grid-tied means you’ll receive power from the national grid when the sun isn’t shining and will reduce your electricity bill by deducting the energy you have produced but not used. Grid-tied systems require less management, but during times of power outage, you won’t be able to generate energy if the grid is deactivated for maintenance.

Non-grid solar cells are more often used in more remote areas, or on boats and mobile homes. If the sun isn’t shining, the lights will go out, so you’ll need backup batteries or generators if you go non-grid. [23]

5. Solar panels at home

A solar panel’s maximum electricity output during direct bright sunshine is known as its Watt Peak (Wp) and it’s a good tool for calculating how much energy you could generate. For example, a polycrystalline solar panel measuring about 150x60x3cm has a Watt Peak of about 150 – it’ll generate 150 watts in ideal conditions, enough to power a PlayStation 4 [24][25]. To generate 600w of power with those solar panels you’d need about 6x4m of roof space and could power an air conditioner all day for free.

Location matters!

Remember you’ll only achieve your Watt Peak in the right conditions. To get the best results from a roof-mounted solar panel you need a well-placed, unshaded roof. In the southern hemisphere you’ll get more sunshine on north-facing surfaces and in the northern hemisphere, more sunlight on south-facing surfaces.

Be aware of tilt angles too, as the sun crosses the sky higher or lower in different areas. Maximising the duration that the solar panel directly or almost directly faces the sun is key, and the perfect scenario is aligning the solar panel such that it directly faces the sun during your daily peak energy demand. Try this solar panel tilt calculator for different cities worldwide.

North-facing solar panels are best in Australia. Near-north wont cost you too much – a north east or north west facing roof will only produce 3-4% less energy, but panels on east or west facing roofs can be 12-18% less effective than north-facing roofs [27].
In Sydney you’ll get on average 2600 hours of sunshine a year; Brisbane 2900; Perth 3200 [28] and an average Australian 1kWp solar system in Perth generates 4.4kWh of electricity per day. at 25 cents per kWh, that’s just over 400AUD per year [29].

6. The cost of solar power

When going solar, it is important to realise that the cost of a PV system consists of more than just the panels. For a grid-tied system, you’ll need not just the panels, but you’ll also need an inverter (or a battery for a standalone system) and construction materials like power wires and mounting brackets. On top of that, you’ll probably need to hire a certified installer to safely install the system on your rooftop.

The below table illustrates what you can expect to pay for a fully featured and installed solar PV system in Australia. Note that regional variations apply, due to differing bonus schemes and retailer price points.

CapacityApproximate Cost (AUD)

If you’re unable to pay so much up front, other options are available. Some solar leases mean your immediate energy savings can be used to fund the repayments, and you won’t have to worry about maintenance as it’s covered by the installation company. However, you won’t get as large a return on your investment as you would by paying upfront.

7. Solar as an investment

Solar power is more than an investment in the environment. A solar power system can and should also be seen as a financial investment, and a particularly sound one at that. Depending on where you live, a solar PV system will pay itself back in about 3 to 5 years, after which it will start generating pure profit for its owner.

The below table illustrates how long it would take a four-person household in Sydney to earn back a given system. It also shows how much money the system will have made its owner after 25 years, compared to that same money sitting in the bank.

CapacityApproximate Cost (AUD)Payback periodEst. profit after 25 years (AUD)Money in a term deposit 4.5% p/a

Note that in this table we are assuming that all produced energy is used and the price of electricity increases by 7% per year. Under these assumptions, you can see that even smaller systems yield at least three times more than a standard term deposit! From this we can draw a simple conclusion: from a financial point of view, going solar is an absolute no-brainer!

Caveat: Feed-in Tariffs

Larger solar systems from 5kWp upwards tend to generate more electricity than the average household needs. At this point, you will start exporting excess energy to the grid. The amount your energy retailer will pay you for this energy is called the feed-in tariff and it is substantially lower than the electricity price.

If you are contemplating a large system or have a small household, it is important to keep these feed-in tariffs in mind, because they may lower your projected earnings. Feed-in tariffs differ per state, but tend to be around 8 cents per KWh, but may continue to fall [51].

8. Choosing the right installer

At the center of every good investment are reliable people and companies. Make sure you choose your solar retailer carefully. Here are a few questions you should ask yourself and your retailer when choosing [38];

  • Have they been in the business for long?
  • Are they well established and experienced?
  • Am I confident they will fix any problems properly and quickly?
  • Who is responsible for repair, replacement and maintenance?
  • What happens to their warranties & guarantees if they go out of business?
  • Are they well informed about local legislation, infrastructure and energy companies?
  • Do they have many solid testimonials; system quality, workmanship, service?
  • Will they survey my house before deciding the most appropriate system?
  • Are they approved by the Clean Energy Council?
  • Is their website up-to-date, high quality and well run?
  • Do they respond to my questions swiftly, thoroughly and personally?
  • Do I know anyone with a solar system, what experiences have they had?

You should be cautious of companies;

  • With unproven track records
  • With overly pushy sales tactics
  • That rush you into making a decision
  • That try to sell you unnecessary items like unnecessarily high-capacity inverters
  • That only offer generic, untailored designs
  • That supply cheaper or less reliable products and equipment

Whether you choose a higher risk, cheaper provider or a more reputable and potentially more expensive provider is ultimately your decision. The best thing you can do is make yourself and your decision as well-informed as possible.

9. Government incentives and grants

As part of your decision, make sure you know exactly what government incentives you’re entitled to. The Australian government’s Renewable Energy Target means they’ll pay you around 700AUS per kW of solar panels you buy at the point of purchase. This will depend on which STC zone you are in, of which there are four. The below table and map should give you a good idea of your zone. [38]

Approx STC rebate per kW805805723618

Image credit: www.energymatters.com.au

On top of STCs, the feed-in tariff you choose may have a minimum payment as controlled by local government (no minimum in NSW or Qld [38]). There is also room for negotiation with some electricity companies, as well as geographical differences in payments. 8c per kWh sold to the grid is a reasonable guideline number to stick to.

10. Frequently asked questions (FAQ)

Below are some quick answers to the most frequently asked solar power questions.

What about at night? And what if it’s overcast / rainy?

Most isolated solar systems, used in remote areas, boats, caravans etc, will use a battery bank to store the day’s power for use when the sun’s not shining. Grid-tied systems generate the majority of their electricity during bright sunshine, so if it’s cloudy or dark, you may use more electricity than you generate. In that case, the grid will supply the required power just like it does a normal non-solar home.

What’s the best angle for solar panels on my roof?

In the southern hemisphere, north-facing solar panels get the most sun and in the northern hemisphere, south-facing solar panels get the most sun. However the best direction (and tilt angle) of a panel depends on your exact location. You can find out the best direction and tilt with this calculator.

Are there any downsides to solar panels?

Like any source of energy, yes;

  • Solar energy only generates power when the sun’s shining. Whilst effective in sunny climates, it’s not optimal in generally cloudy places and of course won’t be useful at night.
  • It’s also expensive in terms of money and land – payback periods can be 25 years or more and you might need 20 square metres or more for a relatively large system. However, the technology is always improving.
  • Solar panels have environmental impacts, mainly surrounding the energy usage, transport and the sourcing of precious materials required to manufacture them.
  • You need roof access to clean and maintain them.

Is solar power really sustainable?

It’s more sustainable than burning fossil fuels, as they may run out within 100 years. The sun will exist for another 2.5 billion years. Over a solar panel’s lifetime it will produce more energy than is required to build it, but solar power may not be 100% sustainable.

The main limits of its sustainability are the costs of repairing and replacing solar panels, however, because silicon is easily recyclable, the biggest restriction is energy, which solar panels produce anyway. Currently the extraction of silicon can cause significant environmental pollution and improper disposal can be damaging. That’s not to say that solar power isn’t one of the most sustainable sources of energy available.

What can I expect from my energy bill after I go solar?

The most common solar system size in Australia is now 3kWp. A 3kWp solar system will usually offset two thirds of an Australian home’s electricity consumption. If you use all of that energy, you can therefore expect your bill to drop by around two thirds, however you may end up selling electricity you don’t use during the day as feed-in tariffs for about 8c per kWh and buying energy in the evenings for about 25c per kWh.

Which type of panel should I choose? Mono, poly or thin film?

Salespeople can have very strong opinions about this (depending on which one they’re selling) but in reality, mono and poly solar panels perform very similarly on a roof. Individual mono cells are slightly more efficient, but polys can work slightly better in indirect light and can require less space between cells. These are the two most common options.

Thin film solar cells are mainly used in solar farms but still only make up around 5% of Australian solar panel sales. They’re about half as efficient as mono and poly, and generally more complicated to install – their best feature is style.

Should I get a grid tied or battery powered system?

For domestic solar systems, grid-tied is the best choice for almost everyone who has the option. Selling unused energy to your provider and buying it when you aren’t generating enough works out to be much more economical than battery-powered systems. This is because of the initial expense of batteries and their relatively inefficient energy storage ability.

If you’re living in a remote area, or require mobility (e.g. on a boat, caravan) an off-grid system may well be the better option.

How much maintenance can I expect?

Safety and efficient operation is the main priority for your solar system. You’ll get detailed maintenance instructions from your provider. You’ll need to clean them yourself about once every three months – don’t use a pressure washer or harsh chemicals. Apart from that there’s very little to do, you’ll mainly just need to keep the inverter fan vents clean and your solar provider may wish to carry out periodic functionality checks