Disclaimer: Neither Auto & General Insurance Company Ltd nor its representatives necessarily endorse or recommend the views of these professionals and their companies or the companies/brands suggested in this article. Budget Direct recognises any costs, timelines and savings suggested by the contributors is subject to usage and dependent on the type of solar systems used.
How do solar panels work?
When sunlight hits a solar panel, photons (particles of light) dislodge electrons from atoms inside the solar cells and these dislodged electrons create a flow of direct current (DC) electricity.
The flow of electricity from each solar cell is transmitted via solar DC cable to your solar inverter, which converts the DC electricity generated by the solar panels into usable alternating current (AC) electricity.
The AC electricity from the solar inverter is then used to power your home. If you are producing more power than you need the surplus electricity is exported to the electricity grid to be used by other homes and businesses.
Solar panels use energy from the sun to convert DC electricity into usable AC electricity for your home. With a solar system, you create your own electricity for your household’s use and sell any excess power back to the grid.
Solar panels collect DC energy which travels to a homes inverter. The inverter is responsible for converting the DC energy collected by the solar panels into usable AC energy for the property.
Without going into detail about photons, electrons, semiconductors and the photovoltaic effect, to put it simply, solar panels convert sunlight into electricity (and in Australia we have lots of it). The solar inverter converts the DC solar power into AC electricity which is then used by your home, thus reducing the amount of power purchased from the grid. Any excess solar power is sold to the grid which also helps to lower your electricity bills.
Simply put, solar powered homes and businesses are powered by the sun. The panels on the roof use photovoltaic cells to capture particles of light and convert them to a DC electrical current. The DC current then flows from the panels to the inverter – known as the heart of a solar system – which converts the electrical current to AC power. AC power is the most commonly used form of electricity. Once converted, the electricity is sent to the breaker box and is used to power electrical appliances - just as you would with electricity drawn from the grid.
They take the direct sunlight (not heat) and turn it into DC energy which can be converted into your household electricity using an inverter.
In very simple words, Solar panels convert energy from the sun (sunlight) into electricity (Direct Current). An inverter mounted near the meter box will then convert the DC into AC and allow the electricity to flow into the house and power lights and appliances. Any excess electricity generated by the system will be sent back to the grid and a feed-in tariff credit is received by the electricity retailers. This is a standard grid-connected system with no storage, however batteries can be coupled to the system to store excess energy to be used at night time and in other situations of need, such as during blackouts. Batteries are becoming more popular with prices going down and State Government incentives due to the fact they also help to stabilise our electricity grid.
Solar panels work by converting light from the sun into energy which you can use in your home or export to the grid. Panels on your roof generate DC (Direct Current) Electricity, which is fed into an inverter which converts the DC electricity into 240 volt AC (Alternating Current) electricity which can be used in your home. There is obviously a bit more to it than that, relating to the chemical properties of the silicon wafer that allow passage of the electrons, but in short, sun shines, hits the panels and creates energy!
A full solar system consists of the solar panels, which convert sunlight into electricity. They then send DC power to an inverter, which then converts it to AC power for supplying electricity to the property. From the inverter it goes to your switchboard which will then feed the electricity to the circuits requiring it.
Any excess electricity will be sold back to your electricity company for an agreed amount. This rate is normally a bit lower than what they sell it to you for, but it soon adds up and helps financially towards your night time usage. It is important to size the system correctly so you get the best return on investment. A quality solar installer will be able to look at your usage and be able to size a suitable solar power system for your needs.
Why should I consider moving over to solar panels?
Right now, solar energy just makes good sense on so many levels. Here’s 3 very good reasons why you should consider making the switch to solar now Make money while the sun shines - Did you know that solar energy actually delivers homes and business one of the highest ROI on any investment you can make? Right now, the average sized system for a home is 6.6kW, and the price has come down so much that it’s now cheaper than a 3kW system was five years ago. When you combine greater efficiency (which means a greater output) at a much more affordable price, the returns are very healthy. Depending on your electricity bill the average sized solar system will pay for itself in approx. 2-3 years in electricity savings alone. If you choose good quality products that’s potentially 23 years ahead of pure savings.
The STC initiative from the government - The Federal Government offers an incentive encouraging homeowners and businesses to make the switch to sustainable energy sources as part of its Renewable Energy Scheme (SRES). When you install a solar system you can receive a rebate by claiming the STC’s (small scale technology certificates). As an example, you can save up to $4,000 on a 6.6Kw system based on today’s STC price. The STC annualises over time and will phase out in 2030, with each year that passes the rebate drops slightly, so to make the most of this rebate now is the time.
Leave only footprints - The environment is always a hot topic for all of us, so no matter which side of the debate you sit on, solar is a great option. We live in the hottest, sunniest country in the world and enjoy an abundance of sunshine every day. It’s an infinite renewable source that does not require mining and refining and therefore reduces our carbon footprint considerably when we harvest power from the sun.
Not only are solar panels better for the environment by reducing the demand for coal powered electricity, but they greatly reduce your power bill. By using electricity created from your own solar system, you are purchasing less power from your Energy Provider.
A quality solar power system can be one of the best investments a home or business owner can make.
During the day your solar power system will provide your home or business with electricity, reducing your reliance on the energy grid and reducing your electricity bill. If your solar power system produces more power than you need, the surplus is exported to the electricity grid and you will be paid for the exported energy.
This is known as a “feed in tariff” and the amount you will receive per kilowatt hour (kWh) is different in each state or territory and can also vary depending on which electricity retailer you purchase electricity from.
Using the electricity you generate yourself, combined with feed in tariff payments, will significantly reduce - and in some cases even eliminate - your electricity bill.
A solar system isn’t financially viable for every Australian homeowner however for a majority of Australian’s, the installation of a quality solar system can deliver clean energy whilst lowering household energy bills for many years.
To save money, of course. The average size solar panel system will deliver savings of approx. $1,000 - $2,000 per year and achieve a payback period of 3 – 6 years. This makes solar one of the most sensible investments a homeowner can make. There’s also the feel-good factor of reducing your carbon footprint and contributing to positive change.
Not just to save money from the extravagant electricity prices. Do your bit to help limit climate change.
Going Solar is a no-brainer nowadays, if you have an adequate roof space. Electricity prices went up by over 63% over the last 15 years and people are using more and more electricity for heating, cooling, pools, etc. and it will only go up even further with the advent of Electric Vehicles. Feed-in tariffs from Electricity Retailers are very attractive and they provide extra savings to help homeowners achieve low bills.
In addition to that, the Federal Government is still financing incentives (STCs) which cover up to 1/3 of the total cost of the system.
The main reason why most people look at making the switch to solar panels, is simply to reduce energy consumption and save on electricity bills. With electricity prices continually on the rise, we are certainly living within a time where we hear the phrase – “you can’t afford to not have solar,’’ said a lot more than ever before.
The best part about this is that due to the fact that solar components have become so much more competitive in pricing over the years, we are truly in an era where solar can become a reality for just about anyone, with no upfront cost options and payoff periods of 2 - 3 years on residential solar, and 2 - 6 years on large commercial solar. In South Australia, now more than ever we have clients choosing solar, and in fact large solar systems while the government incentives are strong on solar.
Although not entirely a main driving force for most people to get solar, there is still a degree of environmental reasons at play here which aids in the decision making process. Installing a solar system today will still significantly reduce your overall carbon footprint, and will help in doing your part in the reduction of coal fired power generation in Australia.
Lastly, the energy market is undergoing a market driven transition to more renewables and distributed energy (lots of small energy generators in the form of solar and battery storage at many homes and businesses, as opposed to the old model of less points of distribution with larger distribution assets). We have already seen energy retailers and smaller players like Living Energy offering VPPs (Virtual Power Plants) which utilise new or existing solar and batteries and smart metering technology to start to cut out some of the layers in the value chain and hence driving pricing down for all!
Most people buy solar to save money, but also it is a major benefit for the environment.
From a financial point of view, solar power systems generally pay for themselves in 3-5 years depending upon the quality of the system that you choose and your power usage profile. Cheaper systems will pay for themselves in about 2 years but with solar you generally get what you pay for, and cheap solar can often work out to be far more expensive due to ongoing issues and failures with low grade product.