How to buy the best solar panels for your home

How to buy the best solar panels for your home

When shopping for solar panels, it's essential to identify your specific needs and how different panels can meet them. A critical first step involves understanding the basics of how solar panels work, analyzing the various types available, and evaluating their efficiency, cost, and potential savings. According to Google, some of the common considerations when buying solar panels include efficiency, cost, warranty, and the type of solar cells used.

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Solar panels are increasingly being installed by homeowners who are worried about rising electricity costs and who want a system that cuts their bills and produces greener energy. We explain what you need to know before installing a solar photovoltaic (PV) system on your roof.

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How do solar panels work?

Some materials such as silicon can be made to produce electricity when light falls on them. This is called the photovoltaic effect. Solar panels use this to convert energy from sunlight into direct current (DC) electrical power.

An inverter unit then changes this into alternating current (AC) for your home's electrical circuits. Any excess energy can be fed back to the electricity grid or to your own battery storage system.

What's in a solar panel?

Most solar cells are made of silicon. Solar panels, also called modules, are each made of several solar cells (typically 60 cells, but some have 72 or more), connected together and sandwiched between protective glass and a backing plate. The whole panel is usually surrounded with an aluminium frame. A typical installation includes several panels connected together in an array.

Types of solar panels

Almost all panels used in home solar systems are mono- or multi-crystalline. While there are technical differences between these types, don’t put too much consideration into this – it’s much more important to consider other aspects such as price, rated power output, and warranties.

The rated power output, or capacity, of solar panels has increased over the years as manufacturers find ways to squeeze out more power. Not so many years ago, 250W panels were common – now, you’ll often be offered panels of the same size that deliver 400W, 500W or even more.

Types of solar panel

The main types of solar panels you'll see on homes are monocrystalline and multicrystalline (aka polycrystalline) panels, but there are other types too. Here's a quick explanation of the main solar panel types on the market today.

Monocrystalline Panels

Monocrystalline panels are typically black and have a reputation for higher efficiency than multicrystalline (or polycrystalline) models, which are typically dark blue and are sometimes said to have better temperature tolerance. The differences come from the manufacturing processes of the silicon cells in each case. Monocrystalline panels are increasingly the common option for home installations.

Polycrystalline Panels

Polycrystalline panels, made by melting multiple silicon crystals together, are less efficient but are more affordable and environmentally friendly since they make full use of the silicon material.

IBC and PERC

Interdigitated Back Contact (IBC) solar cells achieve higher efficiency by having all electrical contacts on the rear, avoiding any metal strips on the surface. Passivated Emitter and Rear Cell (PERC) technology increases efficiency by reflecting light that passes through the cell back into it for another chance to generate electricity.

Heterojunction (HJT) and Thin Film

Heterojunction technology combines conventional crystalline silicon cells with thin film solar cells to boost efficiency. Thin-film solar cells are evolving but are generally less efficient and more flexible in application compared to crystalline panels.

Bifacial Panels

Bifacial solar panels have cells on both sides to capture sunlight from both the front and scattered or reflected light from the back. Depending on their mounting and reflectivity of the surrounding surfaces, they can generate significantly more power than single-faced panels.

How much do solar panels cost?

According to SolarQuotes, these are the current price ranges for good quality solar panel systems.

• 5kW: $
• 6.6kW: $
• 10kW: $13,000

Those prices include the usual rebates and incentives. Expect to pay the higher end of the range if you're going for top-quality components or if your home has unusual installation requirements.

CHOICE tip: Compare prices for whole systems, not just individual panels.

How many solar panels do you need?

The power output of your whole solar system matters more than the size or number of panels. The higher each panel's nominal power rating (and actual power output), the fewer panels you'll need (or the more power you'll generate).

If you have plenty of roof space, you might find it more economical to buy cheaper panels with lower efficiency and just use more of them. Most solar panels are about 1.6–2 square meters in area, but they vary in length, width and power output.

CHOICE tip: Fewer panels can mean a quicker installation.

An example: You could use 20 x 320W panels, with each panel about 1.7m² in area, for an array of 6.4kW and about 34m² total area. But you could go for a higher power panel from the same range, such as a 345W panel, and get a 6.9kW system that takes up the same area (though the panels might cost a little more).

Alternatively, you could make a 6.6kW system using 15 x 440W panels of 2.21m² each, and it would also take up roughly the same area.

What size solar panel system do you need?

To size your solar panel system you need to work out how much electricity you use and when you use it.

As a guide, a typical home uses 20kWh of energy a day. A 5kW solar system would meet most of the daytime power needs of such a home.

However, these days solar panels are relatively cheap, so it usually makes sense to put on the biggest system that your roof can take and that you can afford. The excess electricity can go back into the grid and earn you some money via feed-in tariffs, or charge a home storage battery so that you have cheap power after sunset. 6.6kW is a common size for new systems, but bigger systems (9 to 10kW or more) are also being purchased. The bigger systems often include a battery.

Owning an electric vehicle (or planning to own one in the future) is another reason to consider upsizing the solar panel system, to ensure you've got plenty of cheap solar power to charge the car.

How much money will you save using solar power?

It takes anywhere from two to seven years for a solar system to pay for itself – after that is when you can start counting the savings.

Payback times vary depending on where you live in Australia. The infographic below shows averages for capital cities.

The time it takes for a 5kW system to pay for itself in capital cities:

Perth: 3–4 years

Darwin: 5–6 years

Brisbane: 4 years

Sydney: 4 years

Canberra: 4–5 years

Melbourne: 5 years

Hobart: 5 years

Adelaide: 2–3 years

What are the environmental benefits of using solar?

Your home solar panel system has several benefits for the environment.

Reducing pollution

Power stations fuelled by coal and gas produce a lot of air pollution, in the form of particulate matter, carbon dioxide, methane and more. These have a direct impact on the climate and on personal health. Solar panels don't generate any such pollution.

There is some pollution generated during the manufacture of solar panels (as with all manufactured items), such as greenhouse gases and run-off chemicals. This is not to be ignored, but in general the amount is very small compared to the pollution produced by coal-fired power. There are also concerns about used and broken solar panels ending up in landfill at the end of their life, resulting in wastage of useful materials and possibly heavy metal contamination.

As the solar panel industry has grown, however, so has solar panel recycling, and there are now several solar panel recycling plants in Australia and around the world.

Reducing water usage

Australia is famously the driest continent on the planet, and traditional electricity generation in coal-fired power stations uses a huge amount of water (over 158 billion litres per year for New South Wales and Queensland alone). Even more water is consumed in mining and processing the coal itself. Solar panel manufacture also uses water, but once up on your roof and running, the panels don't use any water at all (except for an occasional cleaning, perhaps).

Reducing our dependence on fossil fuel

Much of Australia's electricity is still generated in coal-fired and gas-fired power stations. But while there are still significant deposits of coal and gas, those supplies won't last forever, and in any case it's becoming less economical to extract them. Gas companies are increasingly looking at fracking to extract more gas, a controversial process with potentially significant environmental risks of its own.

If your solar panel system is set up to export any unused power to the grid (as most are) then not only are you paid for that exported electricity, but it means there's more renewable energy in the system for others to use, and less need to generate electricity from coal or gas. Rooftop solar is increasingly one of the most significant sources of electricity in Australia; in , it delivered 11.2% of Australia's electricity.

All in all, while they aren't entirely problem-free themselves, solar panels are a great option for reducing your home's environmental impact, as well as saving you money.

Rebates and feed-in tariffs

There are two main incentives that can help make your solar PV system more affordable: small-scale technology certificates (STCs) (the "solar rebate") and feed-in tariffs (FiTs). We explain these below. Apart from those incentives, other solar rebates and loans are available in some states and territories:

Australian Capital Territory: Sustainable Household Scheme

New South Wales: Rebate Swap for Solar (households on the Low Income Household rebate can swap it for a solar panel installation on their home)

Northern Territory: Home and Business Battery Scheme

Queensland: Battery Booster program

Victoria: Solar Homes Program

The battery schemes above are included because they can apply to a new solar PV system which includes a battery.

Rebate schemes change from time to time, so it's worth checking the federal government energy website to see what's available in your area.

Always check the terms and conditions for any rebate scheme carefully to make sure you're eligible, and what steps you need to take. For example, many schemes apply only to certain regions or postcodes, may have limited places available, or are only available to households below a certain income level, or you might need to have your proposed system approved by the scheme before it's installed.

What is an STC?

An STC is a form of currency available to owners of small-scale renewable energy systems. Under the federal government's Solar Credits Scheme, eligible households receive money for STCs created by their PV systems. STCs were formerly known as renewable energy certificates or RECs. Currently, the scheme allows you to cash in the certificates you could earn over the next several years straight away.

A new solar PV system will generate a certain number of STCs depending on the size of the system and its location. Generally, the bigger the system and the sunnier the region it's in, the more STCs it will generate. As an example, a 6.6kW system in Sydney installed in will generate 63 STCs.

While the government has set a price of $40 per STC sold through the STC Clearing House, the price you get will vary depending on how you choose to sell your STCs.

Is the STC rebate going to end?

You may see scare campaigns from some solar installers, usually towards the end of each year, urging you to "buy solar now before the rebate ends". The STC scheme isn't about to end, but it does reduce slightly at the end of each year. It was never planned to run forever – its purpose is to incentivise more Australians to install solar and help make the solar market mainstream and affordable. It diminishes a bit every year and will eventually become zero in .

How to sell your STCs

Have the installer sell your STCs for you

The easiest and most common option is to allow someone else – usually the installer – to sell your STCs on your behalf. This may then be applied as a discount to your installation costs (so it acts like a rebate). The benefit is that the process is easy, with all the paperwork taken care of for you. The downside is you're likely to get a little less money per STC as the installer will take a cut of the transaction, or impose an administration fee, for handling the STCs. You can usually expect about $35–39 per STC.

Sell your own STCs

The second option is to sell the STCs yourself, which involves considerable paperwork, applications and fees. Depending on the number of buyers and the time it takes to complete the process, it may be months after installation before you receive your funds. There's no way to tell exactly how long you could be waiting, which means unless you have the capital you might find yourself out of pocket. You might be able to get a better price than that offered by the solar installer, though maybe not enough to be worth the effort.

How much money will you make selling STCs?

Using the above example, a 6.6kW system installed in in Sydney will generate 63 STCs. Assuming a sale price of $39 per STC, that's a $ saving off the cost of the system.

CHOICE Tip: To calculate how many STCs your system will generate, use the government's calculator.

How feed-in tariffs work

A FiT is the rate you're paid for feeding electricity back into the grid (assuming your panels are grid-connected). Nowadays you don't make much money from FiTs, so it's best to maximise your own use of your solar PV and minimise your export to the grid.

How feed-in tariffs work

Almost all FiTs around Australia are now net FiTs. This means a household is only paid for surplus electricity fed into the grid after domestic use is subtracted. If your system produced kWh, for example, and you used kWh of electricity in your home during the day (the time when your PV system was generating power), the rate is only paid for the 500kWh difference.

(Gross feed-in tariffs, where households are paid for all the electricity their panels produce, irrespective of their own domestic electricity consumption, are no longer available for new applicants in any state or territory.)

How much money do you make from feed-in tariffs?

FiT rates around the country have plummeted over the past few years. Coming off a high of up to 60c per kWh in some parts of the country several years ago, FiTs are now usually in the range of 4c to 8c/kWh, depending on where you're located and which energy retailer you choose. However, they can go up to 15c/kWh or more, depending on your energy retailer, time of day and other factors.

Note: In some states and territories, newly installed solar PV systems no longer qualify for a guaranteed FiT. However, many energy companies offer a voluntary FiT instead. Check with your energy company or the appropriate regulatory authority in your state:

• ACT: Everyday Climate Choices
• NSW: Independent Pricing and Regulatory Tribunal
• NT: Territory Renewable Energy
• Qld: Department of Energy and Public Works
• SA: Department of Energy and Environment
• Tas: Office of the Economic Regulator
• Vic: Department of Environment, Land, Water & Planning
• WA: Energy Policy WA

Do you need a solar storage battery?

A home storage battery lets you store the electricity generated by your