New to Solar: Start Here

Welcome to the Penrith Solar Centre Introduction to Solar Systems!

If you’re interested in solar, you’ve probably done a quick Google search. It might have been a bit overwhelming. It’s a lot to take in.

Don’t worry, this cheat sheet was designed just for you.

The purpose of this guide is to help you learn about solar energy. That’s it. We’re not selling anything here. While our business does sell, install, and service solar systems, that’s not what we’re about here today.

This overview of solar is going to follow the below table of contents.

1. Main Components of a Solar System and What They Do
2. Why a Good Installer Matters More Than Equipment
3. Installation Basics: What to Expect on Your Roof
4. Sunlight to PowerPoint: How Electricity Flows from Solar to Your Home
5. What Size Solar System Should You Buy?
6. Solar Rebates for Sydney, NSW
7. An Unbiased Perspective on Solar Pricing
8. How to Calculate Your Payback Period for Solar
9. Solar Batteries and Why You Might Consider One

We are educators first today. Please enjoy the enclosed information. By the time you finish this guide, you’ll be able to confidently understand what to look out for in a solar system and what questions to ask your solar sales consultant – even if it isn’t us.

Add the word “solar” at the beginning of either of those words and you’re referring to electricity that was harnessed from sunshine. Solar power is electricity moving from the panels to your home, and solar energy is stored in the solar battery. 

The unit of measurement for solar power is kilowatts (kW), and for solar energy it’s kilowatt hours (kWh). Kilowatt hours are how you read your energy bill. It’s not only stored in your solar battery, it’s a measurement of power over time.

Those new vocab words are all you need to know before you dive in.

If you’re interested in learning a bit more about power and energy, you might want to check out the following article titled, Power vs. Energy: kW vs. kWh.

Let’s jump into our New to Solar Guide!

Main Components of a Solar System and What They Do

There are five main components to a solar system:

• Sunshine
• Solar Panels
• Inverter (or Microinverter)
• Mounting System
• Consumption Monitoring App

Each plays a critical role in harvesting homegrown electrons.

Sunshine: The sun is 150,000,000 kilometres away, give or take a few thousand k’s. Sunlight travels from the sun to planet Earth in the form of radiation that we call sunshine.

That radiation has a spectrum of characteristics, some are detectible by the human eye like colour, and some are not, like ultraviolet radiation.

It’s the ultraviolet radiation that concerns us. The ultraviolet radiation hits the solar panels on the roof of a home or business, where it is transformed into DC power.

Solar Panels: Solar panels are big, flat, dark sheets of silicon and metal. Individual solar cells, which you can see as a grid work under extremely tough glass, are composed of silicon semiconductors.

When ultraviolet radiation (sunlight) shines on the semiconductors, it excites the electrons in the solar cells. 

The free electrons follow the path of least resistance and move towards the surface of the solar cells. This creates a current. This is how DC (direct current) electricity is produced. That’s what the solar panels do. They generate DC power.

We won’t get too technical here. Just the basics. Unclench your shoulders and have a stretch if you’re getting overwhelmed.

Inverter (or Microinverter): From this point forward, there’s some variation in how the solar system works based on what type of technology the solar system uses.

If it’s a central inverter solar system (sometimes called a “string” system), the DC electricity travels through cables to a central inverter. The inverter is usually located on the side of the home near the main switchboard.

The inverter’s job is to convert all that wonderful DC power into AC power for the home to use. Think of your inverter as a translator: your solar panels speak one language, and your home speaks another one.

If it’s a microinverter solar system, then the microinverter is responsible for the conversion to usable electricity for the home. It works exactly like an inverter… but micro. Instead of one central inverter, each solar panel has a microinverter mounted underneath it.

The DC electricity is converted to AC (alternating current) electricity before travelling through cabling to the home or battery. 

Mounting System: When you look at solar panels on a roof, you only see the panels. They are securely attached to the roof by a metal frame underneath them. That metal framework is made up of multiple, smaller, metal components that are assembled to form the solar mounting system.

Consumption Monitoring App: That’s a meaty phrase. It’s got syllables. Don’t worry, it’s just a noun that describes a verb. Consumption monitoring is a combination of software and hardware that allows you to track your solar electricity use. That’s all.

Consumption monitoring is considered by some in the solar industry to be an optional feature for solar systems. We disagree. Without it, you’re blind to how much energy your home is using and when.

Everyone uses electricity differently, so your patterns may not be the same as your neighbour’s. With consumption monitoring, you can see your usage patterns and make changes. This information (when applied) can save you a ton of money.

We feel it’s a necessary part of every solar system. You wouldn’t drive a car without a speedometer, right?

If you’re interested in learning a bit more about the process of choosing components for your solar system, you might want to check out the following article titled, How to Shop for a Solar System.

Why a Good Installer Matters More Than Equipment

One of the biggest decisions you can make about your new solar system is who you will get to install it. It’s a big choice regardless of who you choose. You want your solar system to work well, look good, and complement your lifestyle.

A bad installation will look like crap and underperform at best. At its worst, a bad installation is unsafe. Don’t forget that all solar systems are mini power plants up on the roof. Getting a good quality installation is key.

In Australia, there are generally two types of solar business models: in-house and sales/subcontractor.

An in-house solar installer is a type of business that offers top-to-bottom, inquiry-to-installation solar systems installation and servicing.

They are certified by the government to install solar. They will handle your questions and installation from the moment you reach out to them to the moment they set up the consumption monitoring app on your phone to fulfilling your warranties.

The sales/subcontractor business model for solar installation is a little different. The sales company works with you to design a system that meets your unique energy needs and goals. They then hire a subcontractor to install the system. The work is divided between two entities.

If you’re uncertain about who to hire for your solar installation, we recommend you get multiple quotes from multiple installers.

There are websites like SolarQuotes or SolarChoice out there that make money by collecting your information and selling it to installers like us. They are a wonderful place to look for additional quotes.

Read the reviews for different solar installers. Google, Facebook, and review sites like the above are a great place to look for consistency in solar installers’ reviews.

If you’re interested in learning a bit more about the importance of a good installer for your solar, you might want to check out the following article titled, In-house Installers vs. Subcontractors: Which is Better?

Installation Basics: What to Expect on Your Roof

We live in Australia. The vast and mysterious Southern Hemisphere. The sun makes its way across the sky to the north of us here in the Sydney metro area. So, your solar panels should face north, right? That should maximise productivity, right?

That’s absolutely a trick question. While the compass direction your solar panels will face does play a part in productivity, there are many other factors to consider. 

Remember the sun rises in the east and sets in the west.

Panels that face eastwards will harvest sunlight in the morning effectively because the panels are facing the sun when it says good morning every day.

Panels that face westwards will harvest sunlight in the afternoon/evening more effectively because they’re facing towards the sunset.

And while northern-facing panels generally, in an overall way, produce more energy, they struggle to keep up with an east/west split. Especially in the early morning and late evening.

It’s far more important to consider when you’re using your energy than how much light the northern face of your roof will receive in the summer.  

Let’s look at what’s happening outside the house first. Much like The Drifters 1962 classic, we’re going Up On the Roof.  

There are a few key terms that we’ll use as we discuss solar panel placement on the roof. They are: 

Pitch: The pitch (angle of your roof or panels) affects how directly sunlight hits the panels. In general, the optimal pitch for solar panels for most homes in Australia is around 30-35 degrees because of where it is located on planet Earth in relation to the sun.  

Angle: You’ve taken geometry, so you know this term, but it’s been a few years. The angle of the sun and how it relates to your solar panels is what we’re concerned with here. When we install solar panels, the angle of the sun’s rays and how they interact with the pitch of the roof is important.

For optimal efficiency, you want to install solar panels at an angle so that the sun’s rays will hit it at a 90° angle.  

Here’s the thing: how can you get the right pitch for your solar panels that’s going to maximise efficiency year-round?  

You can’t. The sun moves in the sky from north to south and back to north again depending on the season. In the summertime, the sun is high in the sky and your panels will produce more than average. In the wintertime, when the sun is low in the northern sky, your panels will produce less.

We recommend you be mindful of pitch and angles without getting too hung up on this. It’s important to know what’s happening to your roof, and your solar installer will be able to walk you through this in a way that is unique to you. After all, your roof will be different from your neighbour’s.  

If you’re interested in learning a bit more about which way to point your solar panels, you might want to check out the following article titled, Which Way Should Solar Panels Face in Australia?

Sunlight to PowerPoint: How Electricity Flows from Solar to Your Home

Your home will interact with your solar system in one of two ways: it gets too much electricity from it, or it gets too little electricity from it.

When your home is getting too much electricity from solar, the power is exported to the grid for something called a feed-in tariff. Your energy retailer will pay somewhere between $0.04 – $0.15 per kilowatt hour you export to the grid.

When your home is getting too little electricity from solar, your home will import electricity from the grid to keep the lights and appliances running when your solar is lagging. Of course, you have to pay for that electricity. As of this writing, it’s about $0.38 per kWh on average.

As you can see, a feed-in tariff payment is considerably less than what your energy retailer is charging you for electricity. This is the power of solar: that self-consumed power is valuable.

If you’re interested in learning a bit more about how to use monitoring to program your energy, you might want to check out the following article titled, What is Consumption Monitoring?

What Size Solar System Should You Buy?

This is one of the first questions anyone asks when it comes to purchasing a solar system. After all, you need to understand how much it will cost, and the cost is often reflected by system size.

The answer to how much solar you should buy is this: as much solar as you can fit on your roof without breaking the bank.

We’re not saying that to trick you into buying more than you need. The reality is that energy is getting more expensive (along with everything else), and your electricity needs will grow as electric vehicles, and other renewable products enter our lives.

The most solar you can install will be different from household to household. Roof space is the biggest deciding factor, and most homes in the Sydney metro area have a unique roof. This is when a good installer comes in handy: they will know how to maximise your roof real estate.

Another important consideration when installing solar has to do with inverter limitations laid out by your local energy distributor (DNSP) and how the grid connects to your home. The ins and outs of this can also be handled by a good installer. They will know how to give you the system you want within the limitations of a site.

In our many years of operation, we’ve never had a customer come back to us complaining about having too much solar on their roof. However, we have experienced customers coming back and asking to install more panels. For some systems, this can be a complicated and expensive process.

If you invest in a smaller system, you will most likely be disappointed by your winter production. There’s less direct sunlight in the winter months and a smaller system will struggle to produce energy for your home. There’s just less surface area harvesting sunlight in a smaller system.

If you’re interested in learning a bit more about your energy needs, you might want to check out the following article titled, How Much Solar Do You Need?

Solar Rebates for Sydney, NSW

Sadly, for Sydney and all of New South Wales, there is only one solar rebate. It’s not exactly a solar rebate, though that’s what it’s commonly called. The solar rebate is the Australian Government Small-scale Renewable Energy Scheme (SRES).

The SRES is a government incentive to encourage the use of renewable energy in Australia. It offers money off the upfront price for the installation of solar panels. In the SRES, the scheme issues virtual certificates called Small-scale Technology Certificates (STCs).

This is where the government gets tricky: STCs are sold by your solar installer on your behalf to companies and corporations who are big polluters. That payout from those companies is the “rebate.” This transaction is regulated by the government, but the money comes from the companies purchasing these “renewable energy credits” in the form of STCs.

The number of STCs a system receives depends on its location, installation date, and the amount of energy it is estimated to generate in megawatt hours for the lifespan of the system.

Even though the SRES “rebate” is still available, it is gradually phasing out by 2030. You still have seven years to cash in on this discount.

Every year, the number of STCs created per system sold decreases by 1/15th.

The sooner the installation, the more STCs, and, therefore, a higher upfront discount. Waiting reduces your rebate as the value of STCs continues to decline. It is still available.

The only requirements for claiming the rebate are:

1. Your solar system must be under 100 kW in size.
2. The system must be designed and installed by an accredited professional.
3. You must use solar panels and inverters that are approved for installation in Australia.

All you need now is a roof.

Note for Newbies: The estimated amount of energy is based on how many solar panels you have installed, not the size of the inverter. Both are measured in kilowatts, so it’s easy to mix that up. Try not to.

If you’re interested in learning about the rebate for solar, you might want to check out the following article titled, Understanding the Federal Government Solar Rebate in Australia: The STC Scheme in 2024.

An Unbiased Perspective on Solar Pricing

Not every solar system is created equal. Some leave off features, others include them, and there is a difference between cheap and quality solar.

Like all consumer products, you get what you pay for.

For many years, a 6.6kW system was the size many solar companies recommended. These days a more common system size is around 10kW. Our average is 11.7kW.

• 6.6kW system will range from $5,000 to about $11,000.
• 10kW system will range from $8,000 or so to about $14,000.
• 13.3kW system will range from $10,000 to about $15,000.

A good solar installer will break down that cost in an itemised quote that includes things like consumption monitoring along with panels, inverter, and a possible battery.

Another factor that’s quite important when pricing solar systems is the type of solar system you’re investing in.

As we mentioned, there are central inverter systems and microinverter systems.

• Central Inverter System will range from $0.60 – $1.00 per kilowatt.
• Microinverter System will range from $1.00 – $1.30.

How you determine which system depends on all we’ve discussed thus far. It really does depend on the home or the customer.

It’s very easy for costs to inflate when it comes time to work with you to get a quote you like. It’s possible you’ll need to upgrade your home from a single-phase to three-phase site. You might need a new switchboard. You will definitely need a new meter.

Deep breath, unclench your shoulders. We’re just trying to be transparent about additional costs that may or may not affect your payback period. Your home might not need any of that.

If you’re interested in learning a bit more about how microinverters compare to string inverters from a cost point of view, you might want to check out the following article titled, Cost of Microinverters vs. Cost of String Systems.

How to Calculate Your Payback Period for Solar

How long your payback period lasts depends on quite a few variables. This is why we say every installation is unique.

1. The size of your system is the first variable, obviously. Panels cost money, and the more you have the more expensive the upfront price will be.
2. How much solar your system is producing. A larger-sized system will produce more energy and pay for itself faster than a smaller system lagging behind your energy needs.
3. Consumption monitoring is useful to see how much you’re exporting to the grid and how much your energy retailer is paying you for that export. What’s your feed-in tariff?
4. Then you need to understand how much your energy retailer will charge you for electricity in kilowatt hours. On average, in Western Sydney, $0.38 is about what you can expect. It will be higher during peak hours and lower in the middle of the day when everyone’s solar is pumping.

We hope it’s right to assume you’re here because of large power bills. Solar does, in fact, offset those bills. For every kilowatt hour you don’t import from your energy retailer, you’re saving $0.38 on average. This adds up to thousands per year.

Offsetting that charge is what solar does. It’s a giant energy coupon.

We mentioned exporting to the grid and feed-in tariffs. This is what happens when your solar produces more power than your home is using. The extra electricity is exported to the grid and your energy retailer pays you for it.

However, a $0.04 feed-in tariff doesn’t equal the cost of electricity. It’s always more cost-effective to save $0.38 than earn $0.04. Which brings us to our next section.

If you’re interested in learning a bit more about payback periods and solar, you might want to check out the following article titled, What is the Payback Period for Solar Panels in Australia?

Solar Batteries and Why You Might Consider One

Solar panels only work when there is sunlight shining on them. The sun does not shine all twenty-four hours in a day. This isn’t especially newsworthy. Even toddlers understand how shadows work.

However, if you add a solar battery to your solar system, you’ll be able to use energy from your panels when the sun isn’t shining on them.

The only way to fully self-consume your solar power is with a battery. Solar will cut your bills by 60% or so. A solar battery empowers you to get those bills to zero. It’s the only way to produce, store, and consume your homegrown electrons.

They’re also great for power outages. As climate instability affects our community, a solar battery provides protection that the grid can’t offer.

Unfortunately, they cost a pretty penny. To get enough storage to offset the rest of your energy bills, you’ll need around 10kWh of battery storage. It will cost anywhere from $8,000 to $18,000 or so. This all depends on brand and storage capacity.

If you’re interested in learning a bit more about solar batteries, you might want to start with the following article titled, Adding a Battery to a Solar System.

Fortunately, the government of New South Wales has a solar battery rebate.

How the NSW Battery Rebate Works

When you install a battery that helps reduce or shift energy use during peak times, it earns what’s called a Peak Demand Reduction Certificate (PRC).

For every 0.1 kW of energy saved during peak hours, you earn one PRC. These certificates can then be sold to energy retailers. Those retailers need to buy these certificates to meet their yearly environmental obligations.

Essentially, the more energy your battery helps save, the more PRCs you can generate, and the more valuable your battery becomes over time.

The rebate incentive is not given to you directly. Instead, it’s applied as an upfront discount by your installer.

Additional Rebate/Incentive

Even if you don’t qualify for the upfront NSW battery rebate, you might still be eligible for another incentive. For example, connecting your battery to a Virtual Power Plant (VPP) could qualify you for the VPP rebate, which offers rewards based on the energy your battery provides back to the grid during high-demand periods. Your VPP provider handles all this.

The amount of money you’ll receive from the “battery rebate” scheme could be as high as $2,400. The VPP part of the scheme could see rebates as high as $400.

If you’re interested in learning a bit more about the upcoming solar battery rebate, you might want to check out the following article titled, Everything You Need to Know About the Home Battery Rebate for NSW.

Wrapping Things Up: Watt Are You Waiting For? Reach Out for a Quote!

Now you have a general overview of what solar is and how it works. This was just a general jumping-off point for those who are new to solar.

A great next step is to explore our Learning Centre a little more comprehensively. Have a glance and check it out. You’ll find articles like the ones linked throughout this page. Here’s one last one before signing off: How to Shop for a Solar System.

Or if you’d prefer, you can reach out to one of our consultants for a chat.

If you have any burning questions that need an immediate answer, feel free to reach out. We love a good chat in the spirit of education.

Blue Skies,

Penrith Solar Centre

Click here for a free quote!