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What is Solar Energy & How Can You Benefit?

Solar Energy

In today’s climate crisis and the transition to renewable energy, solar is increasingly becoming the popular choice for individuals to begin generating their own clean energy. Australia, especially, is well-suited for solar (both residential and commercial) thanks to its ample sunlight, and open space. To read more about solar energy in Australia, and how you can benefit from solar power, continue reading below.

What is solar energy? How does solar energy generation work?

The sun is one of Earth’s greatest renewable sources of energy.

As something akin to a nuclear reactor, every particle of sunlight that hits the Earth (called photons) fuels our planet. By harnessing these photons, solar power can be utilised to not only generate electricity and power homes and businesses, but also create hot water and central heating for and to heat pools.

There are different ways to harness solar energy, depending on what it needs to be used for, including solar thermal, solar PV, and concentrating solar power.

Solar photovoltaics (solar PV) and solar panels

When most people imagine solar energy, they often imagine classic solar panels either in large fields facing the sky or on the rooftops of residences or businesses. These solar panels utilize the photovoltaic effect to transform the sun’s natural light into electricity through the use of semiconductive materials.

While solar energy has long been a topic of interest to scientists (the first solar cells were described in 1883), modern solar panels utilizing the photovoltaic effect were first invented by US company Bell Labs and were able to transform sunlight into electricity at 4% efficiency. Today, most modern solar panels run between 15% - 20% efficiency.

Solar panels today are generally made up of a silicon layer, copper wiring, and a glass case, all held together in a metal frame, usually with an anti-reflective coating to increase efficiency. Silicone is a semiconductive material that, when exposed to sunlight, releases an electric current.

This electricity is released in the form of an alternating current (AC) which travels through the wiring to an inverter that then transforms it into a direct current (DC) for use in a home or business. There are three types of solar panels on the market; Monocrystalline, Polycrystalline or Thin Film:

 Monocrystalline panels are cut from larger silicone, which gives them a uniform appearance and a higher level of efficiency than their polycrystalline counterparts but a more expensive startup cost.

 Polycrystalline panels are created by melting silicon fragments together to form the solar panels. As a result, they don’t allow the electrons released during the photovoltaic effect as much room to move, resulting in less efficient energy generation but at a lower upfront cost.

 Thin-Film panels are created by layering thin layers of PV material over each other. They are generally not very efficient and don’t work well on residential rooftops, requiring more space to be of any value to the solar system owner. However, thin-film panels are cheap to make, and as technology develops they should become more efficient.

According to the Clean Energy Council 2021 Clean Energy Report, solar PV accounts for 35.8% of all renewable energy generated in Australia and 9.9% of the total energy generation (including non-renewable sources). There are currently more than 2.7 million rooftop solar PV systems installed, which means 1 in 4 Australian households are benefiting from generating their own solar energy.

Solar thermal energy

Solar thermal energy is the process of harnessing the heat from the sun for residential or industrial use. Solar thermal energy offers more uses than its photovoltaic (solar panel) counterpart but is more often used in large-scale industrial or commercial settings.

Solar thermal energy is used in three temperature ranges; low, medium, and high; each of which have different uses.

 Low temperature solar thermal energy is most often used for the heating and cooling of residential or industrial spaces, either for the short-term or through the storage of the heat generated. This can be done through passive heating, or through active heating which requires external energy to function.

 Medium temperature solar thermal energy is most often used for the heating of water, including for residential or industrial use, as well as to heat pools. Some less well-known applications include drying crops such as lumber or food such as dried fruits, fish, or grains.

It is also used in cooking to reduce the need for firewood and limit the amount of smoke released into the air, and for the distillation of water through evaporating the water and leaving the clean condensation on a covering glass.

 High temperature solar thermal energy is primarily used for large-scale industrial generation. One of the benefits of this large-scale solar thermal energy is the ability to store the heat for up to 24 hours, as it is easier to store heat than electricity, allowing for greater efficiency while reducing environmental impact.

While there are currently few high temperature solar thermal energy plants in Australia, due to the cost-efficiency of coal and the lack of government incentives, there is hope for its increased application in the future.

Concentrated solar power

Concentrated solar power (CSP) is another method of capturing the sun’s energy for industrial use. CSP involves the use of mirrors and lenses to concentrate sunlight onto a receiver to heat up a heat engine (such as a steam turbine) which then generates power.

Similar to solar thermal energy, CSP can store the heat for later use (in the evening or overnight for example) making it more efficient than PV panels.

In Australia, like with solar thermal energy, there is not a big push to bring CSP to the country as the start-up costs can be quite high, despite the abundance of sunshine available. Many government initiatives, as well, are only available for small or medium-scale renewable energy generation and CSP generally runs at large-scale industrial generation.

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Solar energy in Australia

Australia is well-suited for solar energy as one of the sunniest countries on the planet, and like most other renewable energy sources including biomass and wind, it’s on the rise in popularity particularly when it comes to small-scale solar PV systems.

In 2019 renewable energy made up 24% of Australia’s total energy generation which, by the end of 2020, grew by an additional 3%. This increase was mostly thanks to a growth in small-scale PV system installation which overtook hydroelectricity as the second most popular renewable energy source in 2020.

Rooftop solar panels

Rooftop solar panels are generally small scale solar PV energy systems on homes or businesses.

Unlike the large, ground-mounted, solar farms which can generate up to 100kWh or more, rooftop PV systems generally generate between 5 to 20kWh. These rooftop solar panels are among the most popular household renewable energy sources available and with the cost of solar PV lower than ever before, among the most accessible to the average consumer.

Things to consider before installing a solar PV system

When considering solar panels, there is a lot to take into consideration.

Not only understanding what you will need for a full solar system, in order to get the most from solar energy, or the start-up costs associated with solar panels, but information about your roof and housing situation will all need to be taken into account in order to decide if solar panels are right for you.

  • Any repairs needed to be done to the roof before installing a solar PV system
  • The direction your roof faces
  • Trees, buildings, or other tall structures that might prevent your PV system from getting maximum sunlight

How to install solar panels

You’ll need to find an accredited solar installer to get solar panels installed on your house.

Knowledge of panel placements, high-voltage wiring, city and state regulations, and more all make this a project best left to the experts. Luckily, in Australia, it’s easy to find reputable solar PV system installers with the Clean Energy Council.

What is the Clean Energy Council? The Clean Energy Council (CEC) is Australia’s renewable energy association.

The CEC is responsible for creating the voluntary solar industry code (authorized by the Australian Competition and Consumer Commission) designed to lift solar industry standards beyond the required regulation and enforce strict pre and post-sale requirements including proper documentation and business practices.

When choosing a solar installer, you’ll want to ask around for several quotes to find the best installer at the best price. Your solar installer will be able to help you with the tricky things, such as knowing:

  • The best type and size of solar PV system for you: This will take into account your household’s energy needs, budget, and orientation of your roof
  • The best way to mount the panels onto your roof: The material of your roof will affect the way your solar panels are installed onto your roof
  • The best type of inverter: Inverters convert your generated electricity from DC to AD, and you'll need to choose the right type, which depends on the type of solar PV system you have.

By finding a CEC approved installer, you can be assured in finding a reputable business that will guide you through pre and post business activities, ensuring proper documentation of all consumer rights and honouring all warranties and cooling-off periods.

In addition, some government regulations require solar systems to be installed by a CEC-certified installer for customers to receive solar rebates.

Moving home? Most solar system warranties are transferable to new homeowners, and having owned and installed solar panels on your roof could increase your home’s real estate value by up to $20,000.

Advantages and disadvantages of solar energy

Choosing whether you want to invest in solar energy for your home is a big decision, and weighing the pros and cons of solar energy can help you decide if solar energy is the best option for you.

Pros and cons of solar energy
Advantages of solar energy Disadvantages of solar energy
  • Reduce energy bill
  • Increase home value
  • Good for the environment
  • Helps with rising electricity costs
  • Return on investment
  • Low maintenance
  • High start-up cost
  • Can’t move with you if you move home
  • Weather dependent
  • Not suitable for every home
  • Not 100% carbon neutral

Advantages of solar energy

 Reduce your energy bill: How much you save and earn with solar panels depends on the size of your system but not only will you reduce your energy bill by using less electricity drawn from the grid, you might even earn money through a solar feed-in-tariff.

 Increase home value: While solar panels can’t be uninstalled and taken with you if you move, you will be able to benefit from the increase in home value by installing a solar system onto your house.

 Good for the environment: The sun is a renewable energy source, and using solar energy means less electricity generation from coal or other non-renewable and environmentally unfriendly sources.

 Help combat rising electricity costs: With electricity costs on the rise, and the cost of solar panels decreasing, investing in solar energy means far greater energy independence and freedom

 Return on investment: Despite the high start-up costs, between reducing your energy bill and earning through a solar feed-in-tariff, your solar PV system could pay for itself within 10 years.

 Low maintenance: While solar panels might seem like they will be costly to maintain, in reality, it is really easy. Most solar panel installers have warranties on their parts for up to 25 years for any big problems, and the only thing you need to worry about is keeping them clean of debris a few times a year.

Disadvantages of solar energy

 High start-up cost: Even though the cost of solar PV systems has decreased dramatically in the last few years, they’re still an expensive investment. The average cost of a 5kW solar system in Australia is around $5,000 but can cost even more in some states. If you want to add solar battery storage to your system, that can cost you over another $10,000.

 Can’t move solar panels with you: Solar panels are a good investment if you’re not planning to move for a long time, as they are next to impossible to uninstall and take with you. However, if you do need to move, solar panels do increase the value of your home.

 Weather dependant: Solar panels obviously rely on the sun to generate solar energy. If you live somewhere with lots of cloud cover, or where you don’t get multiple hours per day of sunlight, you won’t generate enough electricity to earn back on your investment.

 Not suitable for every home: There are a lot of factors that go into determining if solar panels are a good fit for your home. If your roof is facing the wrong direction or has a bad angle, solar might not be suitable for you.

 Not 100% carbon neutral: Even though solar energy is a renewable resource, the manufacturing and transportation of solar PV systems means that they are not 100% carbon neutral.

Small-scale Technology Certificates (STCs)

Small scale technology certificates are a federal scheme through the Renewable Energy Target to give customers rebates for their small-scale renewable energy generators. Small-scale technology certificates represent the amount of energy your solar PV system (or renewable energy generators) would generate over its lifetime, offsetting what you would otherwise draw from the grid.

The more electricity your solar system will generate, the more STCs you will receive.

This scheme is available until 2030 (or for 15 years for customers who installed solar panels before 2017) and applies to not only solar PV systems but other small-scale renewable energy systems under 100MW, such as wind power or hydropower.

It is possible to independently trade STCs, but it’s much more preferred and common to assign them to your installer or retailer who will give you a point-of-sale discount immediately to offset your upfront solar PV system cost.

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Solar feed-in-tariff

Solar feed-in-tariffs (solar FiT) are a tariff your energy provider pays you for any generated energy sent back into the electricity grid. Solar FiT varies depending on where you live, and your specific energy provider, and can range anywhere from under 9c/kWh to up to 20c/kWh.

Many times, the higher solar FiT rates come with a lower discount off the reference price, so if you’re not careful you might not save as much money as you hoped. Depending on your energy usage, lifestyle, and the size and type of your solar PV system, you might be better off foregoing the massive feed-in tariff in exchange for a higher discount.

Choosing the right solar energy plan
Higher FiT but no (or low) discount off the reference price Bigger discount off the reference price and lower FiT
  • Your solar PV system is greater than 5kW
  • You use most of your energy in the evenings
  • There are conditional discounts applied to your electricity plan you might not make
  • Your solar panels are under 5kW
  • You use most of your energy during the day and export less to the grid
  • You have battery storage

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