The beginners guide to solar

Upfront cost vs the return you get

A typical 5 kW solar array will cost about $6,000 to install. This could produce around 20 kWh per day.

Are you willing to wait to get a return on your investment?

Depending on where you live, you may be able to save up to $1,500 per year off your power bills through a combination of solar feed in tariffs and relying less on power from the grid.

Add to that any federal or state rebates for installing the system, and you would normally be looking at around 3-6 years for your solar setup to pay for itself.

Case studies: How to avoid a bad installation

We spoke to four different customers about what they learned from their own experiences with solar systems and the installation process. So what do you need to know if you're planning to buy solar?

• Michael
• Martin
• Tom
• Susan

Before buying: Lot's of research

• Michael poured a lot of energy into the quote process to make sure he'd get the best system with the Victorian solar rebate. He got quotes from 8 different companies, read online reviews, and spent four hours over more than a month discussing systems before settling on G-store, a Victorian state retailer. G-store decided to split the system between the north and west side of the roof based on Michael's usage habits.

During installation: The installer fixed any issues:

• While the installation ran into some problems, including broken roof tiles and leaks, Michael was impressed with the way his installer dealt with it, allocating specific people for specific jobs to get everything fixed up. In the end, he paid $8,200 for a 5 kWh system on a 20 year warranty, and expects to make his money back in 3 years while saving $2,500 annually on bills.

After installation: Switched to a better plan and has actually made money on hot days

• Following the installation, Michael switched to Amber Electric for their wholesale power prices after he saw people tweeting about it online. He says he's made $60 on some hot days by switching off appliances with a 16c/kWh feed-in tariff.

Before buying: Found an installer who looked at his house in a lot of detail

• While Martin had gotten a few solar quotes done over the years, he'd never been happy until he encountered a local retailer, Simmark. They looked at his roof, shading, and usage before coming back with a recommendation for a system size and a quote. The installation itself was straightforward, taking just a couple of days.

After installation: His first bill went from 17kWh to 13kWh per day and is now 9.2kWh per day

• Martin ultimately spent $7,000 on his 6.5 kWh system, which cut his first power bill from 17kWh to 13kWh per day and it now averages out to be 9.2kWh per day. In a quarter his bill has gone from $556 to $319.

During: Bad experience, but using his own knowledge of his house was able to get the right system

• Tom from the ACT had an initially bad experience with his solar panel installation. The salesperson did a great job drawing up a map of his roof and evaluating his usage habits, but Tom had to convince them that the south-west corner of the roof was prone to shading based on his own experience living there. Moving it meant a few extra hours of power production daily.
• Unfortunately the installers were mistakenly given the wrong map, and ended up taking four weeks and breaking some tiles, though they later fixed it.

After installation: His first bill went from $550 to $230

• Overall, Tom spent $5,000 on a 20-panel, 5 kWh system with 10-12 years of factory warranty and cut his power bill down from $550 to $230. He refinanced his house to afford the system, since he considers the financing options from big energy companies to be a rip-off.
• With his new solar system installed, Tom now runs his washer, dryer, and air-conditioner during the day to save on energy, and got an app on his phone so he can track just how much power he's producing and when.

Before installation: Installer was very professional during the installation

• Susan from NSW was satisfied with her solar experience. She called up a specialist who took the time to do a professional evaluation of her house, asking lots of in-depth questions, checking the position of the sun, and using the shadows from adjacent buildings to figure out the best place for the panels.

After installation: Cut her power bill roughly in half

• Susan has a lighting qualification from the University of Technology Sydney (UTS) and found James Wallis Power Installers to do the actual installation after discovering them from work referrals. Happy to dish out for the environment, Susan spent $5,000 on her system and has made it back over the past 3 years by cutting her power bill in half. Now, she says she no longer worries when power prices go up because she has her solar.

How to ensure you have a good solar installation

Based on what we learned from our case studies, here are the main things to think about when you're trying to get your solar system actually installed.

Don't rush the quoting process

Before you even begin the quoting process, it's worth taking the time to read reviews of the solar installers you're considering. Positive reviews are great, but also check the negative reviews and see if they involve legitimate problems you might face, or are simply written by angry people.

During the quoting process itself, your installer should be asking about or taking into account your usage habits and the position of the sun and shade during the times you use your energy the most to help choose the best spot for panels. A good installer may even take a look at your electricity bill before moving ahead, and ask quality, detailed questions throughout the process.

Don't overspend

A good installer will survey your house and usage habits and come back with a recommendation for panel size based on your needs. Have a good idea of how much power you might actually require: some installers may try to upsell you on panels, but make sure they have made that recommendation based on your actual usage. If they upsell you straight away, then it could be a red flag.

Find a CEC approved installer

Ensure that you're using a CEC approved provider so that you're eligible for the solar rebate. While the rebate is shrinking from year to year, it's still extremely relevant: our case studies ended up spending between $5,000 and $8,000 after the rebate had been applied. The rebate depends on the size of your system and where you live, but usually tallies a couple of thousand dollars.

Ask about warranties

Like anything else, solar systems and their various components have a limited lifespan, so warranties are a must. You should look for warranty both on the products (factory warranty) and from the installer for the job. It's always worth calling back when you have a problem.

Warranties seem to be around ten years or so at least, though you might have to weigh that up against the chance of your installer going bust if you have the work done by a small company. You can also cover your solar panels with your home insurance for a bit of extra protection against damage.

Make the most of your solar after it's installed

Once you actually have your new system set up, there's a few things you can do to make the most out of it.

Install a smart meter

A smart meter allows you to track your solar power production and energy use throughout the day. Many energy retailers offer complimentary installation of smart meters for solar users when you sign up. Once you have a meter, there are apps from many retailers and other providers you can install on your phone to track usage on the go.

Consider time of use

Since solar panels are active during the day, consider changing your usage habits to suit. One of our users found that they saved money by running their washer and dryer during the daytime, when they could take advantage of their own generated power. Unless you have a battery, you'll only be able to directly use your solar power during the day.

Hunt for good feed-in tariffs

Energy companies pay solar feed-in tariffs for each kWh of power you feed into the grid, with the rate depending on where you live and what power plan you have. Some retailers will offer the bare minimum required by law, while others will offer big tariffs in exchange for higher usage rates. It's worth shopping around for an energy plan that offers a nice balance between feed-in tariffs and usage rates, which you can do using our energy comparison tool.

While saving your solar power to feed it back into the grid may be tempting given the existence of feed-in tariffs, you're much better off using it wherever possible instead of purchased electricity. You may earn about 10c/kWh pushing it back into the grid, but you'll likely save around 20c/kWh or more for each unit of power you don't buy from your retailer.

1. What rebates and incentives are there for solar power?

There are three main rebates that exist to encourage people to switch to solar power: federal rebates, state government rebates, and feed in tariffs.

• Federal rebates. The federal government will reimburse you for installing your solar system, with more powerful systems attracting larger rebates. These incentives take the form of small-scale technology certificates that are worth about $40 individually, explained here. The rebate is set to decrease annually until it hits zero in 2030, so the sooner you install solar the better.
• State government rebates. These are rebates provided by individual state governments to assist with increasing the number of solar users. Current subsidies for solar panels are provided by the Queensland and Victorian governments, while help with the cost of battery installation is available in Queensland, Victoria, the ACT, and South Australia.
• Feed in tariffs. Solar feed in tariffs are provided by your energy retailer, who will refund you a certain amount per kWh of excess solar energy you feed back into the grid. Tariffs vary widely by state and power plan, but typically run somewhere between 5 - 21c/kWh. Feed in tariffs are particularly useful when you don't use as much power as you produce or have a solar battery to feed energy back into the grid over time.

2. How does your property impact whether you should get solar?

Almost anybody can benefit from installing solar panels, but there are some important factors that will affect how much.

• Panel orientation. Since we live in the southern hemisphere here in Australia, you'll get the most sunlight with north-facing panels. Even if your roof doesn't have a north face, east and west facing panels will still produce a fair amount of electricity during the morning and afternoon, respectively.
• Panel angle. This is a relatively minor factor, but having panels around the same angle as your latitude helps maximise power output. For a flat roof, panels can be mounted to achieve an incline.
• Panel temperature. Hotter panels are less efficient. Higher quality panels will deal with heat better.
• Shading or obstruction. The less sunlight that reaches your panels, the less effective they'll be. Microinverters and power optimisers can help generation if some of your panels get blocked during the day.

3. What types of solar systems can I buy?

4. Is it worth getting a battery?

Buying a solar battery is tempting because it offers you quite a bit more freedom from the power grid as well as giving you a power store to draw upon in emergencies. The issue with solar batteries is that they're extremely expensive (starting at around $10,000) and will only pay themselves off in 10 years plus for the typical household, far longer than the 3-6 years of a grid-tied system.

Batteries may be worth it if you're planning to stay at a property for a very long time and enjoy greater power independence. The good news is that solar batteries are getting cheaper all the time, and you can set up a battery-ready system now and buy it later when the price has dropped.

5. Inverters: what are they and why do you need them?

Inverters are electrical components that convert the DC current produced by solar panels into AC power that can be used by your electrical appliances and such. Without an inverter, most of your devices would be unable to function off of the DC power produced by the panels.

The only thing a hybrid inverter changes is that it allows for conversion in both directions, so that it can both charge and drain a solar battery.

6. How can I pay for my solar system?

There are many ways to finance your solar panel system:

• Cash. If you can afford to pay upfront, it will save you having to pay any extra interest on a loan as well as invest your money in a system that has a relatively good return on investment after the first few years.
• Green loans. A green loan is a low-interest loan offered by a financial institution with an interest in renewable investment. You should be able to find one with generous and flexible repayment options over 1 to 7 years.
• Home mortgage. Adding onto your home mortgage will likely only give dividends if you plan to pay more than the minimum repayments. Compare the cost of a long-term home loan against the cost of a short-term solar loan.
• Rent to own. Under this scheme, the company which leases the system to you owns it until you pay it off. This sort of buy now pay later scheme seems to amount to a no-interest loan but often comes with a substantially higher price built into the cost of the system.
• Power Purchase Agreements (PPA). A PPA means you get a solar system installed for no upfront cost, but pay for the electricity it produces as if were being sold to you by the power company (though usually at a lower rate). While this may seem like a good deal, you are generally contractually obligated to buy a minimum amount of power from the company, even if you don't need or want it.
• Personal loan. A regular loan with higher interest rates than a green loan or home mortgage. Some lenders may take into account what you're planning to use the money for and offer you lower rates because of it, and it leaves you in a situation where you're not beholden to a particular retailer or installer.

7. Are solar panels worth it if I'm not home during the day?

The answer to this is probably yes, due to the fact that solar feed in tariffs are much more generous than they were a few years ago. On top of the fact that you likely still use some percentage of electricity during daylight hours no matter when you're out, thanks to fridges and other static appliances.

As far as tariffs go, the electricity your solar panels are generating during the day that you aren't using will be fed directly back into the grid, earning you a refund on your energy bill that's much higher than it would be a few years ago. In addition, if you are investing in a solar battery, any energy you don't use during the day can be saved for later use or fed back into the grid in the same way.

Frequently asked questions?

• What is a solar regulator?

  The regulator is a crucial component in an off-grid solar setup, or a grid-connected setup with an in-home battery. It is also known as a charge controller and controls the flow of Direct Current (DC) that is carried away from the panels to the battery.

  The regulation of DC current is important because it stops the system from overflowing, or the battery from overcharging and becoming damaged. It also acts as a no return point, meaning that once the panels have generated electricity and sent it into your home, the regulator will prevent it from returning back to the panels, which will keep the battery charged and prevent wastage.

• What is a solar inverter?

  The solar inverter is probably the most important element of the solar setup. It takes the DC current that panels produce and turns it into 240V Alternating Current (AC), which makes it suitable for home appliances, lighting and everything else.

  Without the inverter, the energy that your panels produced would not be usable in your home, so it is important to buy a quality, durable inverter. A poorly made or inefficient inverter can affect your system's reliability and ability to power your home.

• What types of inverters are available?

  There are two basic types of inverters on the market.

  • Modified sine wave inverters. These cost less than pure sine wave inverters and are more simple in their construction. They work for most households appliances, but problems have been reported with larger appliances, such as garage door openers, photography lighting systems or even laser printers.
  • Pure sine wave inverters. More reliable, more versatile and expensive than modified sine wave inverters. They're often worth the investment for the superior performance though.

  When you're getting solar installed, you don't need to know too much about the technical stuff. You can leave that up to your solar installer, but there are also a few things that you should know. Knowing what the regulator and inverter are can help you to ensure you aren't oversold and that you get the perfect kit for your home.

• Which regulator and inverter do I need?

  It is always best to buy quality over quantity and this is especially true of your electricity supply. The last thing you want to do is install your solar panel system and then realise that the parts you saved money on are not suitable for your home and have them replaced at even further cost.

  Discuss your situation at length with your solar installer. They will be experts in regulators and inverters and will be able to help you with the right parts at the right price.

Solar Guides on Finder