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Solar Panels: Types, Cost, and Installation

Solar panels

Solar panels are popular, and if you’re not yet one of the 2 million Australian homes benefiting from solar energy by saving an average of $540 per year on your electricity bills, it makes sense to want to get in on the action. It can seem daunting to try and navigate the world of residential solar panels, but if you want to get the most out of solar energy generation, keep reading more below and discover the cost, benefits, and how-to about solar panels.

Types of residential solar panels and ways to generate solar energy

solar panels on a residential roof connected to a battery

There are many different ways to generate residential solar energy. Cost, efficiency, aesthetics, and the layout of your home and roof, as well as what you hope to get out of your solar energy, can all play an important role in choosing the right type of solar energy generation for your home.

Traditional solar panel systems (Solar PV systems)

Traditional solar panels are among the most popular and most common types of rooftop solar systems. Within the umbrella of “solar panels” there are three main types:

 Monocrystalline Solar Panels: The oldest and most developed of solar panels. These panels are created from a single, continuous crystal structure, which increases efficiency and allows them to be used for many years (some monocrystalline solar panels are still in use from the 1908’s). The average efficiency of monocrystalline panels is 18%.

 Polycrystalline Solar Panels: While similar to monocrystalline solar panels, these panels are made from pieces of silicone crystals, rather than one continuous crystal structure. While traditionally seen as inferior to monocrystalline, polycrystalline solar panels now offer a more cost-effective and comparably efficient alternative to the more expensive monocrystalline panels, with an average efficiency of 14-16%.

 Thin film solar panels: Unlike crystalline solar panels, thin film solar panels are made by coating glass or steel with a thin layer of light-absorbing material. These panels are significantly less efficient than mono or polycrystalline solar panels, with 9-13% efficiency. However, thin film solar panels are more cost-effective, and have more flexibility when it comes to installation allowing them to be installed on surfaces that crystalline panels might not be able to be installed on.

Solar thermal panels

Solar thermal panels are less well known than traditional solar PV systems. Unlike solar PV, which transforms the sun's energy into electricity using a generator, solar thermal energy heats up the water inside cylinders attached to your roof, which is then used to heat your home and water.

Solar thermal systems can often provide anywhere from 40% to 90% of your home’s hot water supply. However, since they do require the sun to be shining in order to effectively heat your home and water, you will need to supplement your solar thermal system with an electric or gas boiler.

There are three main types of solar thermal systems:

 Flat-plate collectors: Large, solar panel-like collectors which attach to your roof and transfer the heat of the sun to a hot water tank. These are more affordable, but not the most efficient choice.

 Evacuated tube collectors: While similar to flat-plate systems, evacuated tube collectors use glass tubes to transfer heat to a hot water tank. While more efficient than flat-plate systems, they are also the most expensive.

 Heat-pump systems: These systems collect heat from the air, rather than direct sunlight, to heat your household’s water. These do require electricity to pump the hot air, but not a significant amount.

Solar thermal systems can cost between $3,000 and $7,000 depending on the type of system, which can be up to $5,000 more than choosing a traditional gas or electric hot water system. However, the running costs for a solar thermal system can be up to $200 less per year than running an electric hot water storage system.

Solar pool heating? Pools can use a lot of energy between heating, cleaning, and running a filter. Discover how you can benefit from solar pool heating to reduce the cost of owning a pool.

Solar energy tiles

If you don’t like the aesthetics of solar panels on your roof, but want to benefit from a solar PV system for your home, solar energy tiles can be an attractive alternative. These tiles, also known as building-integrated photovoltaics (BIPV), are integrated into your roof rather than attached on top, creating a more streamlined appearance.

While solar roof tiles are more aesthetically pleasing than a traditional solar PV system, they are both less efficient and more expensive.

  • Solar roof tiles have an average efficiency of 10%, whereas monocrystalline solar panels have an average efficiency of 18%
  • Solar PV systems can cost around $4,000 to $6,000, while solar energy tiles can cost you over $10,000 for the entire system with installation and an inverter
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How do solar panels work?

Solar panels, and the technology behind them, might seem complicated, but when the step-by-step process of transforming the sun into electricity is broken down, it’s relatively straightforward.

 Traditional solar panels are made up of silicon cells, a metal frame, and a glass casing surrounded by a special film and wiring. These solar panels are grouped together and installed on the sunny side of a roof.

 These silicon cells, also known as solar cells, are made up of two thin layers of silicon one of which is positively charged, and one which is negatively charged. This forms an electric field.

 Solar energy hits these solar cells, which causes the cells to energize and loosens electrons from the atoms within the silicon layers. This causes a DC electric current to generate.

 The DC current is sent through an inverter, which changes the current to AC (also known as alternating current - the type of electric current that powers most homes).

 After the electric current is converted, it is distributed through your home to power appliances in the same way traditional electricity generated from the grid powers your home.

 Any generated energy your home doesn’t use can be sent to the electricity grid for a solar feed-in-tariff

Are solar panels right for your home?

Solar panels can be very expensive, and there are many things to consider before investing in residential solar energy. When shopping around for an accredited solar installer and getting multiple quotes, your installer should discuss all these factors with you before anything else.

 Climate: You need the sun in order to generate solar energy. Thankfully, Australia is the perfect place for solar panels, with an average of 7-8 hours of sunshine per day in the summer.

 Roof: The angle and direction of your roof plays a big role in the efficiency of your installed solar panels. The angle of your solar panels should be the same as the latitude of where you live. If you live at a latitude of 40 degrees, for example, your panels should be mounted at 40 degrees. In addition, the direction of your roof matters as well. North-facing roofs are the best, while East or West are only slightly less efficient. Meanwhile, if you have a south-facing roof, you might want to look into other options such as ground-mounted panels.

 Shade: Since solar panels rely on the sun, it makes sense that you won’t want to install solar panels if your home is surrounded by trees and buildings that block sunlight. There are ways to install solar panels even if your house has some shade; micro-inverters, rather than a large inverter, attach to the back of each panel and convert solar energy to electricity individually.

What if I can’t install a solar PV system?

Maybe you want solar energy for your home, but due to any number of reasons such as housing restrictions, rental agreements, or owning a home not suitable for solar energy, you can’t install solar panels to your residence. While this may be frustrating, not all is lost. Community solar energy (also known as offsite solar) can give people the benefits of solar energy without needing to install panels directly on their home.

With community solar energy, customers can purchase or subscribe to solar panels on a solar farm, and get all the benefits of solar energy in their home. With community solar energy, customers get the benefit of:

  • Not needing to worry about factors such as rooftop size and direction, shade, surrounding buildings, or housing restrictions
  • Not needing to perform maintenance or repairs on solar panels
  • Allowing those who might not be able to benefit from solar power the ability to access it

Solar panel installation 

While you can theoretically install your own solar panels, the Australian government requires all residential solar panels to be installed by an accredited solar installer in order to benefit from everything your solar panels have to offer. A full list of accredited installers (and there are dozens available) can be found on the Clean Energy Council website but some of the most well-known solar installers are:

  • Solahart
  • Solar Australia
  • EnergyAustralia
  • Origin
  • Arise Solar

How much do solar panels cost in Australia?

The cost of solar PV systems are affected by a number of factors; quality, brand, size, location, and more can all drive up the price of solar panels and solar systems. However solar PV systems generally cost between $3,000 and $10,000 in Australia and that price can be lower if government schemes and rebates are applied.

Average solar panel cost in Australia
Solar system size National average costs
3kW $3,920
5kW $4,960
7kW $6,580

*Source: SolarChoice Average Solar Panel Price April 2021

Where you live in Australia greatly affects the overall price of solar panel systems. Those who live in Western Australia, for example, enjoy some of the lowest solar system prices while those who live in the Northern Territory have to pay some of the highest.

Solar panel cost by city (5kW output)
City Cost for 5kW system
Adelaide, SA $4,390
Brisbane, QLD $4,720
Canberra, ACT $4,690
Darwin, NT $7,610
Hobart, TAS $5,870
Melbourne, VIC $4,850
Sydney, NSW $4,900
Perth, WA $3,990

*Source: SolarChoice Average Solar Panel Price April 2021

Australian government solar panel rebates and grants

Despite increased interest in solar panels, the Australian government has begun to reduce the number of initiatives to switch residents to solar energy. While some residents in some states can still enjoy government-subsidised solar PV, there are less rebates now than five years ago.

Small Scale Technology Certificates (STCs)

Small-scale technology certificates are a federal scheme through the Renewable Energy Target, available until 2030, to give customers rebates for their small-scale renewable energy generators. While this can include other forms of renewable energy generation, solar PV is the most common.

STCs represent the amount of energy your solar panels and solar PV system would generate over its lifetime, which offsets what you would otherwise use from the electricity grid. The bigger your solar PV system, and more electricity it generates, the more STCs you’ll receive. While you can independently trade STCs, it’s much more common for your installer to be assigned the certificates who will then offer you a point-of-sale discount, upfront, to offset the solar system cost.

Solar rebates in South Australia

The South Australian government offers all residential households the solar home battery scheme, to offset the cost of their solar energy storage. The total amount available per household depends on a number of factors including whether you’re a concession cardholder, and the size of the system.

South Australia home battery scheme
  Step One Subsidy
Effective 29 Oct 2018 – 14 April 2020
Step Two Subsidy
Effective 15 April 2020
Energy concession holder $600 per kilowatt hour $400 per kilowatt hour
All other households $500 per kilowatt hour $300 per kilowatt hour
Maximum subsidy per battery installation $6,000 $4,000

Source: South Australia Government

Solar rebates in New South Wales

Currently, the government of New South Wales offers one solar power scheme to low-income residents interested in solar energy. Eligible households will receive a fully-funded 3kW solar PV system if they meet the following criteria:

  • Currently be receiving the Low Income Housing rebate (please note that if you receive the solar for low income housing subsidy you will not be eligible for the Low Income Housing rebate for 10 years)
  • Hold a valid pensioner concession card or Veteran’s Affairs Gold Card
  • Own their home and not already have solar PV installed
  • Use at least 3,600kWh of electricity annually
  • Live in: Central Coast, North Coast, Sydney - South, South Coast, or Illawarra – Shoalhaven

Solar rebates in ACT

There are two solar energy programs available to residents in the ACT. The first is available to Pensioner Concession Card holders, which offers up to a 50% rebate (capped at $2,500) to eligible residents.

The second is a program known as the “Next Generation Energy Storage program” which gives eligible customers up to $825/kW on their solar battery storage, up to 30kW. If you have solar energy storage through Evergen, Solahart, or SolarHub, or are planning on purchasing one through one of these installers, get in contact with them directly to find out more.

Solar rebates in Victoria

There are four available solar energy rebates in Victoria for solar energy installation and generation.

  1. Solar panel rebate for homeowners: Up to $1,888 for eligible homeowners to install solar panels on their home
  2. Solar panel rebate for tenants: Up to $1,888 for eligible rental properties
  3. Solar battery rebate: Up to $4,828 for eligible solar panel users who want to install solar storage
  4. Solar hot water rebate: Up to $1,000 for eligible solar hot water systems

Solar feed-in-tariffs in Australia

Solar feed-in-tariffs are given to solar energy users who put generated electricity back into the grid. Electricity providers offer different feed-in-tariffs, and here we outline some of the electricity providers offering the highest FiT.

Solar FiT in NSW
Provider Minimum FiT Maximum FiT
AGL 9.5c / kWh 17c / kWh
Origin Energy 7c / kWh 20c / kWh
Amaysim Energy 10c / kWh 16c / kWh
Solar FiT in ACT
Provider Minimum FiT Maximum FiT
Energy Locals 10c / kWh 16c / kWh
EnergyAustralia 10.5c / kWh 10.5c / kWh
ActewAGL 8c / kWh 11c / kWh
Solar FiT in VIC
Provider Minimum FiT Maximum FiT
Origin Energy 10.2c / kWh 16c / kWh
Momentum Energy 12c / kWh 13.5c / kWh
Click Energy 12c / kWh 13c / kWh
Solar FiT in QLD
Provider Minimum FiT Maximum FiT
Red Energy 6c / kWh 16.1c / kWh
AGL 8c / kWh 15c / kWh
Origin Energy 6c / kWh 14c / kWh
Provider Minimum FiT Maximum FiT
Click Energy 10c / kWh 17c / kWh
Amaysim Energy 10c / kWh 16c / kWh
AGL 12.4c / kWh 16c / kWh

It might seem like if you have solar panels, you should choose an energy plan with a high solar feed-in-tariff. However, it is common for energy providers who offer high solar FiT have lower discounts on their energy rates.

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Depending on your circumstances, you might be better off with a lower FiT and higher discount if you have a smaller solar system that you use more frequently during the day, whereas if you have a large solar system and export a lot of your generated electricity to the grid during the day, you might be better off choosing a higher FiT despite your plan offering a lower total discount.

Are solar panels worth it?

Solar panels and solar PV systems might seem like a big investment, but the benefits can outweigh the costs for most households, and are an easier at-home renewable energy generating system than residential hydropower, biomass or small-scale wind energy. While it may take anywhere from 5 to 10 years or more to recoup what you spent on your solar PV system, you will start seeing immediate benefits through generating your own renewable electricity, thus reducing your annual electricity costs while doing your part to combat climate change and make Australia greener.

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