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Solar power options: going on-grid or off-grid

Find out whether an on-grid or off-grid solar system is better for your needs.

Most solar systems are connected to the power grid and are known as "on-grid" systems. Those which are completely removed from the power grid are called "off-grid" systems.

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What's the difference between on-grid and off-grid solar systems?

The main difference between the two systems is how you can access power, and whether or not you can store it.

On grid

  • Solar panels generate electricity during sunny periods.
  • Excess power is pushed back into the grid for feed in tariffs.
  • Draws mains power from the grid when panels aren't producing.
  • Limited in size (usually ~5kW inverter) based on grid setup.
  • Often <$10,000 to install.

Off grid

  • Solar panels generate electricity during sunny periods.
  • Excess power is stored in batteries or wasted.
  • Draws power from batteries or a backup generator when panels aren't producing.
  • Not limited in size.
  • At least $15,000 to install, but often more

How does an on-grid solar system work?

Energy production

The main components of power generation are:

solar panel

Solar PV (photovoltaic) panels, to generate electricity from sunlight.
inverter

Inverter or micro-inverters, to convert power into a more usable form.
fuse

Electrical safety gear like breakers, fuses, and disconnects.
electric meter

A meter, to monitor energy production for feed in tariffs and tracking system performance.

Where does excess energy go?

Excess energy is fed back into the main power grid. Depending on your energy plan, you will be paid a feed in tariff for each kWh of power you send back to the grid.

What happens when my panels are offline?

Your house will automatically draw power from the mains electricity grid. Each kWh of power used will be charged at the rate specified on your power plan.

Your system will stop working when there is a power failure on the main grid, even during the day. This reduces the risk of electrocution to repair workers.

How am I billed?

You will be billed monthly or quarterly by your provider, depending on your plan. Your total bill will be your mains power usage charges minus any feed in tariffs, plus supply charges and any other fees.

How does an off-grid solar system work?

Energy production

The components for an off-grid system are the same as for on-grid, plus:

power pack

Battery bank, for storing excess energy.
electricity controller

Charge controller, to stop batteries overcharging.
switch power disconnect

DC disconnect, to switch off access to the battery bank when not being charged, for safety.
electric generator

Backup generator (optional), to provide energy on cloudy days or at night time.

Where does excess energy go?

Excess energy is used to charge your battery bank. If your battery bank is full, your solar panels will cut their power production down drastically. Your charge controller will still maintain a small trickle of power to the batteries to maintain charge.

What happens when my panels are offline?

Power will be drawn from your battery bank. Once your batteries are depleted, you'll either need a backup generator or you will lose access to electricity.

How am I billed?

Since you aren't using external power, you won't be billed.

What are the benefits of going off-grid?

Although off-grid systems come with a number of challenges - including a huge upfront cost and the prospect of being left with no access to electricity in extreme circumstances - they have a number of benefits. These include:

  • Avoid grid-related power outages.
  • Reduce electricity usage costs to zero.
  • Live in remote or rural areas with no easy grid access.
  • Environmental benefits of using 100% renewable energy.

Hybrid power systems

Hybrid power systems are on-grid systems that also incorporate battery banks. This allows you to switch to backup power in an emergency, or store up power and feed it back into the grid when you may get a higher feed in tariff.

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