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Selecting a solar system
A qualified solar retailer will look at your bills and your roof and recommend an appropriately sized system for your home. For many homes in Yarra, a system size of approximately 3-4kW will be appropriate. You can also estimate the size you’ll need yourself, by looking at your energy bills.
In Melbourne, a 4 kilowatt (kW) solar system generates around 14 kilowatt hours (kWh) of electricity on a sunny day. The average household in Victoria uses around 16kWh per day, but usage depends on many factors – the size of your home; how many people live with you; how often you are at home; and the type, condition and energy efficiency of your appliances and your home. Look at your energy bills to see your daily usage.
You may want to consider a larger system if you expect changes in your household – for example, if you expect your family to increase in size, to spend more time at home, or you’re thinking of adding a battery or electric vehicle in the future. In general, if you are deciding between two system sizes, it is more cost-effective to install a bigger system upfront.
Solar systems have two main components: solar panels and an inverter. You can see which products meet Australian standards on the Clean Energy Council list of approved products.
The inverter converts the DC current generated by your solar panels into AC current that is used in your house. The most common and least costly type is the string inverter, which can be installed on most homes. A string inverter system has one inverter for all the panels in the system.
For homes with partial shading or where the solar panels need to be installed on separate roof sections, microinverters or power optimisers can help. With a microinverter system, each panel has its own small inverter. Power optimisers achieve a similar result by splitting a string inverter into separate sections. CHOICE has more information on choosing an inverter.
Selecting a solar company
You must use a Clean Energy Council (CEC) Approved Solar Retailer and Accredited Installer to ensure your system is eligible for available rebates and incentives. CEC Approved Retailers agree to a Code of Conduct demonstrating their commitment to responsible sales and marketing activities and solar industry best practice.
You may want to look at reviews of a company’s customer service and its track record of installing solar in Australia, to assist in case of any warranty claims. Consider talking to neighbours or friends with solar about their experiences. Beware of high-pressure sales tactics, door knocking, and cold calling. Make sure you receive a professional, written quote that includes the details of the offer, not a verbal or handwritten quote.
- Clean Energy Council guidelines recommend that your quote should include:
- Itemised list of components, and whether the price has deducted the value of STCs (small scale technology certificates) to reduce the cost of the system
- Site-specific system design including proposed roof plan
- System performance estimates (daily, monthly and annual) and expected efficiency losses due to shading or orientation
- Full disclosure of assumptions made
- Warranty details
- The responsibility of each party for all aspects of the process (e.g. metering changes, grid connection, retail agreements, other paperwork)
- Service agreement
- Schedule of deposit and progress payments
- Agreed timeframe for installation
- Any site conditions or circumstances which may result in extra chargeable work required that is not covered in the initial contract.
Check the warranty terms. Your solar system should have:
- Product warranties cover any manufacturing defects of the panels and inverter. All CEC Approved Retailers offer a minimum warranty of 5 years. Product warranties can be up to 25 years for panels and 10 years for inverters, roughly equivalent to the life of these products.
- A workmanship or installation warranty covers any problems occurring due to workmanship during installation of the system. These must also be a minimum of 5 years for CEC Approved Retailers.
- A performance warranty guarantees the output of the system up to a percentage of the output at installation. This indicates the quality of the panels’ performance over time, but is not the same guarantee as the product warranty. Over time, a solar system will become slightly less efficient. This warranty is usually a guarantee of 90% output after 10 years, and 80% after 25 years.
There are a number of independent organisations providing information and advice. Visit Solar Victoria, the Clean Energy Council, Consumer Affairs Victoria, or CHOICE for more information about choosing a solar system.
Getting value for money
Compare multiple quotes
Solar is a major household purchase, so it’s always a good idea to get multiple quotes before making a decision. Look closely at the details of the offers and compare the features that are important to you.
There may be other costs associated with installing solar. Some common reasons are:
- Your electrical switchboard needs upgrading. This is more common in older houses where the original switchboard is still in use.
- Your roof is difficult to access, for example, because your home is multiple storeys, or attached to other buildings.
- Your roof is very flat or very steep, and requires tilt frames.
- Your panels need to be located far from your switchboard or on multiple roof faces, and require additional cabling.
Rebates and incentives
There are state and Federal Government rebates and incentives available for installing solar, and various financing options for covering the upfront cost.
Victorian Government’s Solar Victoria rebates
If you are an owner-occupier with a household income less than $180,000 and your home is valued at under $3 million, you are likely to be eligible for a State Government rebate for installing solar. The Solar Victoria rebate is currently up to $1,400.
When you receive a quote from an authorised solar retailer, they will work with you to claim the rebate. Solar Victoria highly recommends that you receive confirmation of your eligibility before accepting a quote or paying a deposit.
Visit Solar Victoria to find out more about solar rebates.
Australian Government's STCs
Small-scale technology certificates, or STCs, are the Federal Government incentive available to all small-scale solar systems (under 100kW). STCs are tradeable certificates paid directly to the solar company, and should appear on your solar quote as a reduction in the total cost of the system. When discussing the cost of solar systems, companies usually talk about the cost of a system with the price reduction from STCs already applied.
STCs are calculated based on the size of your system, a rating given to your location in Australia, and the number of years remaining until 2030, when the STC scheme is phased out. This means that installing solar this year will generate more STCs than the following year, so it costs less to install sooner.
For more information on STCs visit the Clean Energy Regulator.
Some of the most common financing options to cover the upfront cost of solar are described below, but make sure you consider whether these are right for you, and whether you should seek financial advice, before making financial decisions such as taking out a loan or adding to your home loan.
If you are eligible for a Solar Victoria rebate, you are also eligible to apply for an interest-free loan from Solar Victoria, up to the value of the rebate. For smaller systems, this means you can install solar at little to no upfront cost. You repay the loan, with zero interest, over four years, while saving on your energy bills.
Visit Solar Victoria to find out more about interest-free loans for solar energy systems.
Some banks offer green loans with low interest rates for installing solar or energy efficiency upgrades. These can be a competitive option to fund the upfront cost of solar, and let you pay for the system over time through the energy savings on your bill. Make sure you understand the terms and conditions and compare establishment and ongoing fees, interest rates, and restrictions or fees for changes to the loan such as early repayments.
Another option is to add to your home loan or redraw any extra payments. With low interest rates, an addition to your home loan could allow you to finance the upfront cost of solar and pay back the cost over time, while saving on your energy bills. If there is still considerable time left on your mortgage, however, even low interest rates over many years can add up. Increasing your monthly repayments by using some of your energy savings to pay down your loan could reduce the time you are paying off your solar system through your home loan.
You may wish to seek financial advice before taking up a financing option.