Solar power

A field of solar panels and a setting sun

What is a solar photovoltaic (PV) system?

A solar photovoltaic (PV) system, often referred to as solar panels or solar power, generates renewable electricity by converting energy from the sun. The solar panels generally sit on a house or shed roof facing north so that they get good access to the sun, though sometimes panels are situated at other angles if there is limited northerly solar access. A solar PV system is different from a solar hot water system, which uses the sun's energy to heat water rather than generate electricity.

Types of solar photovoltaic (PV) systems

In Australia the solar photovoltaic panels are usually connected to the electricity grid and generate DC (direct current) electricity. A device called an inverter is used to convert this DC electricity into the 240 volt AC (alternating current) electricity which is required to run the electrical appliances in your home.

The electricity generated by the PV system is delivered directly to your home for consumption and any excess electricity is exported to the grid. Your house will draw electricity from the grid when it is night or when your PV solar system cannot generate enough electricity to meet your consumption.

It is also possible to install solar PV systems with battery systems but these are much less common than grid-connected systems. Solar PV systems with batteries allow for storage of electricity to use at night or at times of low sunshine, and in some cases allow electrical appliances to operate during power outages. If the battery installed is large enough it is possible for a house to completely disconnect from the electricity grid, although these systems usually also rely on a diesel generator back-up and are costly to install.

Benefits of solar PV systems

Installing a solar PV system will allow you to generate renewable energy and reduce your electricity bills. Some of the electricity you generate is used in your home to power electrical appliances and some is exported back to the electricity grid.

In Victoria a typical house consumes around 15 kilowatt hours of electricity per day. Over one year a 1.5 to 3 kilowatt solar PV system can generate around 35% to 70% of this, though the amount generated by the system varies throughout the year as the amount of daily sunshine changes.

Typically 50% of the electricity generated by a PV system is consumed in the home and 50% is exported to the grid. This reduces your annual electricity bill:

  • by reducing the amount of electricity you draw from the grid (and how much you are therefore billed for by your retailer) 
  • because you are paid for the electricity you export to the grid (see feed-in tariff below).

How much will you save?

The output of a solar PV system depends on a range of factors including its size and orientation. The most common systems are:

  • 1.5 kilowatt, which generates 5.5 kilowatt hours on an average daily basis 
  • 3 kilowatt, which generates 11 kilowatt hours on an average daily basis.

A typical house consumes around 15 kilowatt hours per day. Over one year a 1.5 to 3 kilowatt system might generate around 35% to 70% of this requirement. A solar module should last for 20 to 30 years, with inverters lasting up to 10 years. 

Feed-in tariffs

A feed-in tariff is a payment you receive from your electricity retailer (ie the company you receive your electricity bill from) for each unit of electricity your PV solar system exports to the grid.

How to install solar power

There are several factors to consider when installing solar power, such as the positioning of panels and which system to choose.