Solar panels convert sunlight into electricity through the photovoltaic effect. Here's the simple version of what happens on your roof every sunny day [^1^]:
Photons hit the panels: Sunlight contains tiny particles called photons. When they strike the silicon cells in your solar panels, they knock electrons loose.
Electric field creates current: Solar cells are made of silicon layers (one positive, one negative). The knocked-loose electrons flow from negative to positive, creating direct current (DC) electricity.
Inverter converts to usable power: Your home runs on alternating current (AC), not DC. The inverter transforms DC into AC electricity you can actually use.
Power your home or export: The electricity flows to your switchboard. If you're using power, solar feeds your appliances first. Any excess goes back to the grid (and earns you credits).
⚡ Key Fact
Most commercial solar panels convert 15–22% of incoming sunlight into electricity. The rest is lost as heat or reflected light. Higher efficiency panels (20%+) cost more but produce more power in the same roof space.
Solar Panels Explained
Not all panels are created equal. Here's what matters when comparing options:
Panel Technologies
Monocrystalline: Most common in 2025. Made from single-crystal silicon, these are the most efficient (19–22%) and longest-lasting. Slightly more expensive but better value long-term.
Polycrystalline: Older technology, less efficient (15–17%), cheaper to produce. Rarely used in new Australian installations.
Thin-film: Flexible and lightweight but low efficiency (10–13%). Used for specific applications like caravans or curved roofs.
What to Look For
Wattage: Modern panels range from 390W to 470W+. Higher wattage means fewer panels needed for the same system size.
Efficiency rating: Above 20% is considered high efficiency.
Temperature coefficient: Lower is better. Shows how much performance drops as panels heat up (important in Australian summers).
Warranty: Look for 25-year performance warranties and 10–15 year product warranties.
Tier 1 rating: Bloomberg New Energy Finance ranks manufacturers by bankability. Tier 1 panels are from financially stable companies likely to honor warranties.
🌡️ Hot Tip
Solar panels actually work better in cooler temperatures. A 25°C day with bright sun produces more power than a 40°C scorcher. This is why southern states like Victoria and Tasmania can have excellent solar output despite being "less sunny" than Queensland.
Inverter Types: Which One's Right for You?
The inverter is the brain of your system. It converts DC to AC and manages how your solar interacts with your home and the grid. There are three main types [^3^]:
🔌 String Inverter
One central inverter for all panels
✓ Most affordable ✓ Simple maintenance ✓ Proven technology
✗ Shading affects entire system ✗ No panel-level monitoring ✗ Single point of failure
🔋 Microinverters
Small inverter on each panel
✓ Shade doesn't affect other panels ✓ Panel-level monitoring ✓ 5–25% more energy in complex conditions ✓ Longer lifespan (20–25 years)
✗ Higher upfront cost ✗ More components to potentially fail
⚡ Hybrid Inverter
Solar + battery in one unit
✓ Battery-ready ✓ Backup power during outages ✓ Smart energy management ✓ One device, less clutter
Australian standards allow you to oversize your panel array by up to 20% above your inverter capacity. For example, a 5 kW inverter can handle 6 kW of panels. This improves energy production in low-light conditions (morning, evening, cloudy days) without overloading the inverter.
Why 6.6 kW is Australia's Sweet Spot
The 6.6 kW system is the most popular size in Australia because:
Uses a standard 5 kW inverter (cheaper, widely available)
Covers the average home's daytime usage (16–18 kWh/day)
Fits on most standard roofs
Best balance of cost vs. output
Eligible for maximum STC rebates
Battery Storage: Do You Need One?
Solar batteries store excess daytime energy for use at night. Sounds great, but the economics don't always stack up. Here's the honest breakdown:
When Batteries Make Sense
High evening usage: You use most power after 6pm when solar isn't producing
Time-of-use tariffs: Your retailer charges more for evening power (common in VIC, SA)
Blackout protection: You need backup power (essential for medical equipment, home offices)
Going off-grid: Remote properties without grid connection
Future EV charging: Planning to charge an electric car overnight
When They Don't
Low feed-in tariffs aren't the problem: Even at 5c/kWh export, batteries rarely pay for themselves within warranty (10 years)
High upfront cost: $8,000–$15,000 for a quality battery
Limited cycles: Batteries degrade with use. Most last 10–15 years vs. panels at 25+ years
💡 The Math
A typical battery saves $500–$1,000/year in electricity costs but costs $10,000+ installed. That's a 10–20 year payback, longer than most battery warranties. If you're considering batteries, do it for energy independence and blackout protection, not purely financial returns.
Battery Types
Lithium-ion (LiFePO4): Most common. Safe, long-lasting, compact. Tesla Powerwall, BYD, Sungrow use this.
Lead-acid: Cheaper but bulky, shorter lifespan, maintenance required. Rarely used in modern homes.
Costs, Rebates & Payback
What You'll Pay (2025 estimates)
System Size
Price Range (after rebates)
Annual Savings
Payback Period
6.6 kW
$4,500 – $7,000
$1,200 – $1,800
3–5 years
8 kW
$6,000 – $9,000
$1,600 – $2,400
3–5 years
10 kW
$7,500 – $11,000
$2,000 – $3,000
3–5 years
13+ kW
$10,000 – $15,000
$2,600 – $4,000
3–6 years
Government Rebates (STCs)
The Small-scale Technology Certificates (STCs) scheme reduces your upfront cost by around $400–$600 per kW installed. For a 6.6 kW system, that's roughly $3,000–$4,000 off the sticker price.
Based on your location (sunlight zones) and system size
Applied instantly by your installer (you don't claim it yourself)
Phasing out gradually until 2030
Feed-in Tariffs
When you export excess solar to the grid, your retailer pays you a feed-in tariff. Rates vary by state and retailer:
VIC: Minimum 4.9c/kWh (regulated)
NSW, QLD, SA: 5–15c/kWh (shop around)
WA: 2.25c/kWh (Synergy) or 10c/kWh (Horizon)
TAS: ~8c/kWh (Aurora)
ACT: ~8–12c/kWh
Higher feed-in tariffs favor larger systems (more excess to export). Lower tariffs favor self-consumption (using solar as it's generated).
The Installation Process
Knowing what to expect helps you choose a quality installer and avoid cowboys. Here's the standard process:
Step 1: Assessment & Quote (1–3 days)
Installer visits or uses satellite imagery to assess roof condition, orientation, shading
Reviews your electricity usage patterns
Provides detailed quote including system size, panel/inverter brands, warranties, and total cost
Step 2: Paperwork & Approval (1–2 weeks)
Grid connection application to your DNSP (Distribution Network Service Provider)
STC rebate paperwork
Building permit (if required by council)
Step 3: Installation Day (4–8 hours)
Mounting system installed on roof
Panels secured to mounts
Inverter mounted (usually near switchboard)
Electrical wiring and connection
System testing and commissioning
Step 4: Inspection & Connection (1–4 weeks)
Electrical safety inspection by licensed inspector
DNSP approves grid connection
Meter upgrade (if needed for smart metering)
System activated and generating
⚠️ Red Flags to Avoid
Be wary of installers who: pressure you to sign on the spot, won't specify exact panel/inverter brands, offer prices way below market rate, aren't CEC-accredited, or ask for large upfront deposits (more than 10% is illegal in most states).
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