How Does Solar Panel Home Works?

Table of Contents
    Add a header to begin generating the table of contents

    In Australia, solar power has attracted the most attention and funding of any alternative energy source. Do you have a firm grasp on the fundamentals of solar energy technology, given the rising popularity of solar power as a means through which households and companies may cut their electricity bills and their carbon footprint? How does it function, exactly?

    This article will attempt to explain how solar panels work by transforming the sun's energy into electricity. The science of solar power is explored, and then several considerations leading up to the purchase of a solar power system are laid out.

    To generate electricity, solar panels absorb sunlight and convert it into usable electrons. This power can be used locally, or, when excess, sent back into the grid. Put solar panels on the roof to convert sunlight into DC power. It is then sent to a solar converter, which transforms the DC power from your panels into AC power.

    Things To Consider Before Installing Solar

    The sun is an inexhaustible source of clean energy, but solar power is not without its detractors. Before making a solar investment, you should think about the following three things:

    Solar Panel Efficiency

    There is a significant efficiency gap between solar panels and other types of power generation. A coal power plant, as an example, can extract around 70% of the usable energy from coal. However, the best efficiency ever recorded for solar cells is only 46%, and practical efficiency is typically far lower than that due to the less expensive manufacture of commercial panels. As a result of its low efficiency, more solar panels are needed to generate the same amount of electricity, limiting the use of solar power.


    Your solar panels' efficiency is highly dependent on the amount of sunshine they receive. Most of us in Australia are fortunate enough to live in a country with year-round pleasant weather, but many people in the world have to deal with cold, wet winters. For this reason, cloudy countries cannot rely on solar power.


    Unfortunately, solar panels are still fairly pricey, running anywhere from $2,500 to $12,000. To give you an idea of scale, a 4kW solar system, minus installation expenses, will run you about $5,000. The bright side is that solar energy is becoming increasingly affordable.

    There is still a long way to go before solar technology reaches its full potential, but it is an excellent renewable energy option with endless possibilities. We hope this post has helped you learn more about solar power and its many advantages and potential drawbacks.

    With solar energy, there is no need to manually turn the system on and off; it will do it whenever it is needed. There's no need to manually toggle between solar and grid electricity, though; your solar system will do that for you based on how much energy you use. A solar system is so low-maintenance that you may forget it's even there. This also ensures that a high-quality solar energy will serve its owner for many years.

    how does solar panel home works (1)

    Your solar charge controller can tell you how much power is being created right now, how much has generated today, and how much it has provided in the entire period it has been on. A few of high-quality inverters also provide wireless connectivity and advanced online monitoring.

    FAQs About Solar Panel At Home

    Solar panels work through a series of events that allow customers to take advantage of the sun’s rays. This process essentially takes place in five steps:

    • Sunlight hits the solar panels on rooftops.
    • Solar cells are activated and produce electrical currents.
    • Electrical energy is converted via a solar inverter.
    • Converted electricity can be used to power you’re home.
    • Excess electricity can be fed back into the grid for a small rebate off your energy bills.
    • Your solar panels are made up of silicon photovoltaic (PV) cells. When sunlight hits your solar panels, the solar PV cells absorb the sunlight’s rays, producing electricity via the Photovoltaic Effect. The electricity produced by your panels is called Direct Current (DC) electricity, which is not suitable for your home by your appliances. Instead, the DC electricity is directed to your central inverter (or micro inverter, depending on your system set-up). 
    • Your inverter can convert the DC electricity into Alternating Current (AC) electricity, which can be used in your home. From here, the AC electricity is directed to your switchboard. 
    • A switchboard allows your usable AC electricity to be sent to the appliances in your home. Your switchboard will always ensure that your solar energy will be used first to power your home, only accessing additional energy from the grid when your solar production is insufficient. 
    • All households with solar are required to have a bi-directional meter (utility meter), which your electricity retailer will install for you. A bi-directional meter can record all the power drawn to the house and record the amount of solar energy exported back to the grid. This is called net-metering. 
    • Any unused solar electricity is then sent back to the grid. Exporting solar power back to the grid will earn you a credit on your electricity bill, called a feed-in tariff (FiT). Your electricity bills will then consider the electricity you purchase from the grid, plus credits for the electricity generated by the solar power system that you don’t use.

    To assess whether it’s a worthwhile investment, first, it’s important to understand how installing solar panels will reduce your electricity bill. We are ignoring the environmental benefits for now!

    Offsetting Your Energy Consumption

    The primary way solar can help you tackle your energy costs is by reducing the amount of electricity you need to buy from your electricity retailer, which typically will cost between 15-40c per kWh. A grid-connected solar system will prioritise solar energy and harmoniously supply any remaining energy needs from the grid. A typical household may expect to offset 30% to 70% of their energy usage with solar panels, depending on how much their electricity is consumed during daylight hours. This offset percentage can get closer to 100% by installing a battery storage system.

    Feed-In Tariff For Excess Energy

    The amount of energy generated by your solar panel system is dictated by the sun, not your energy consumption, so there will be times when surplus energy is created and can be sold back to the grid for a rate called a ‘feed-in tariff’. These feed-in tariffs vary by state and which electricity retailer (e.g. AGL, Origin etc.) you are with. Typically you can usually find a feed-in tariff between 3-12c per kWh. Your ability to access a feed-in tariff is usually limited to a maximum solar system size – for a full explanation of what is possible state by state, read this guide. 

    Some Options For Increasing Self-Consumption

    Increasing your self-consumption of solar energy will reduce your energy bills. In addition, to improve your return on investment, you can consider applying a timer on common household appliances, such as:

    • Electric hot water system
    • Washing machine
    • Dishwasher
    • Swimming pool pump
    • Underfloor heating system

    You can buy programmable wall-socket timers from a hardware store for under $50, or an electrician can install one for you.

    To work out how much you will save on your energy bill, you first need to work out the right system size for your needs. As discussed above, you save money by offsetting the amount of electricity you are buying (self-consumed energy) and by selling electricity for a feed-in tariff. There are different rates for buying and selling energy, so understanding how much solar energy you will be self-consuming is important in estimating your savings.

    Simple solar payback period free calculator using the Solar Choice advanced calculator. We have created the below five scenarios that look at the savings from different system sizes with some typical assumptions made on energy consumption. We suggest you have a play with one or both of our free to use calculators:

    • Easy to use the calculator
    • Advanced calculator for more precise results

    The price of solar depends on where you live, what type of system and products you select and which solar company you sign up with. As part of our free compare the market service, we collect live and up to date price information from 100s of solar installers around Australia, and we publish average pricing by capital city on the Solar Price Index:

      3kW 4kW 5kW 6kW 7kW 10kW

    All $3,980 $4,610 $5,110 $5,740 $6,700 $9,180

    Adelaide, SA $3,360 $3,920 $4,420 $4,920 $5,920 $8,210

    Brisbane, QLD $3,940 $4,530 $4,960 $5,460 $6,970 $8,750

    Canberra, ACT $3,560 $4,090 $4,440 $5,010 $5,780 $7,610

    Darwin, NT $5,810 $7,130 $7,950 $8,970 $10,090$13,670

    Hobart, TAS $4,880 $5,630 $6,280 $7,010 $7,640 $10,560

    Melbourne, VIC $3,720 $4,150 $4,560 $4,890 $5,630 $8,080

    Sydney, NSW $3,690 $4,160 $4,600 $5,190 $5,930 $7,780

    Perth, WA $2,870 $3,230 $3,660 $4,430 $5,670 $8,810

    Note the average prices in the above table include:

    • A full turnkey system – all products, labour, equipment hire
    • The government STC rebate (more on this below)
    • GST

    One of the biggest problems that solar energy technology poses is that energy is only generated while the sun is shining. That means nighttime and overcast days can interrupt the supply.

    Beware Of Cheap Solar.

    The more you research solar energy, the more "too good to be true" solar costs you'll find. For example: "Limited Time Deal $2,500 for 6.6kW!" These businesses warrant extra caution because they typically skimp significantly on customer care, product quality, and set up processes. For some real-world examples of what might go wrong, check out this ABC report.

    Possible installation and/or product guarantees of ten years or more. However, this warranty will only be useful to you if the manufacturer is still in business and if the warranty claim process is straightforward in Australia. Many of our calls come from long-lost clients who bought from Chinese manufacturers years ago and are now seeking to get in touch with them to redeem their warranty.

    In the end, if it seems too cheap to be true, it generally is, and a solution that is too inexpensive will end up costing more than a system that is reasonably priced.

    Do your homework before committing to a solar installation firm or buying any of their products. If you need assistance, please refer to our list of five questions to ask your installer, contact us through email, or dial 1300 787 273.

    The Science Behind Solar Panels

    The photovoltaic effect is a chemical process that is used to generate electricity from the sun. The photovoltaic effect is the name given to the reaction that occurs when certain materials are exposed to sunshine and cause them to generate an electrical current. These qualities are why almost all solar panels employ silicon as their primary material. Coal plants, wind turbines, and hydroelectric dams are all examples of conventional power plants that use an external energy source can spin a turbine, which in turn charges a generator to create an electrical current.

    What Do Solar Panels Do?

    Without getting too technical, the photovoltaic effect occurs when photons from the sun hit the top n-type silicon layer and provide energy to the outermost electrons of an atom, causing the electrons to escape their atomic orbits and become free electrons. DC current is created by the movement of these free electrons. Finally, an inverter converts the DC power into AC power that may be used. Any unused power in your home can be sent back to the power company, while the free electrons find their way to the p-type silicon.

    What Are Solar Panels Made Of?

    Those smaller blue or black circles within a solar panel represent individual sun cells. Commercial solar panels typically feature solar cells constructed of two silicon layers, a p-type layer at the bottom or an n-type layer atop. Thin metal lines act as the conductor for the solar cells and sandwich these layers between them.

    Of course, some solar panel manufacturers claim superior efficiency because they employ premium silicon or a different material. Silicon can also be arranged in a wide variety of crystal forms, with "monocrystalline" (or "black") solar panels boasting the highest efficiency rates. Polycrystalline, which describes blue solar panels, feature numerous silicon structures and are therefore somewhat less efficient than monocrystalline panels but generally more cheap.

    What Extra Costs Should I Prepare For?

    how does solar panel home works (2)Additional fees could be incurred for a variety of reasons in the case of residential construction. The good news is that we ask installers to detail their fees for these typical add-ons as part of the online quotation comparison tool. Refer to the following table to determine which, if any, of these typical features might be present in your own property.


    • A scissor lift and edge guards will be required.
    • Installers will have more work on their hands because they will need to remove a large number of tiles before they can attach the mounting framework to the roof battens.
    • With this type of roofing, you'll need special non-penetrating clamps that aren't necessary for other types of roofing.
    • It is not necessary unless your roof faces due south or is totally level, and then just to rectify a tilt or prevent dirt buildup.
    • No licenced electrician will install solar panels on a switch that isn't up to code.
    • Solar inverters that are compatible with a property's 3-phase power supply are more costly than single-phase inverters.

    What About Batteries?

    Presently, the installed cost of a kilowatt-hour (kWh) of battery capacity is around $1,000. This equates to a price tag of roughly $10,000 for a standard house battery. Nevertheless, as we've shown in detail, solar batteries aren't quite there yet from a financial standpoint. In the next two to five years, if manufacturers considerably scale up manufacturing, we anticipate that batteries can become economically viable for households.

    Investing in High-Quality Solar Products

    You may be feeling a little overwhelmed about making the right decision for your home's solar panels at this point. There are greater, cost-effective products and cheap and ugly ones that will bring more issues than advantages, as is the case with many purchases. As going solar is a long-term commitment that necessitates the services of certified electricians for maintenance and upgrades, we recommend only purchasing high-quality products from reputable manufacturers.

    While there's no replacement for thorough study, we've found three simple ways to tell if a certain brand of solar panels is any good. The first place to start is with Bloomberg NEF's top tier ranking. This list identifies the most financially stable solar panel companies, which can help you determine if they will still be in business when it comes time to make a warranty claim. PV Evolution Laboratories conducts annual independent testing, so you can check to see if the small solar company is recognised as a "high performer" in that report. Next, you should do some online research to see if the business has a local presence in Australia in the form of an office and phone number. This is essential if you need to make a direct warranty claim and your installer is just no longer in business.

    Finding a Reliable Solar Installation Company

    Choosing a reliable solar installation company is trickier. There are over a thousand solar installation businesses that we have researched and approved over the past 12 years to include in our comparison service. In a single click, you can quickly examine bids from reliable solar installation companies. The Verification Procedure at Solar Option:


    • See if a company has ever traded before using their ABN.
    • Examine the available reviews online.
    • Verify that the electrician has a Master Electrician's licence, is registered with the Energy Contractors Registry, and is accredited by the Clean Energy Council.
    • Have a look at what they're offering as their baseline on the Grid Choice comparison site.
    • Six months after the installation is complete, have each client provide comments.

    Minimum Requirements

    • Business activity for the past year
    • At least 20 five-star ratings and an overall rating of four or higher
    • Design and installation of grid-connected solar photovoltaic systems with Clean Energy Council certification.
    • You won't find any "cheap and terrible things here."
    • It's unusual for customers to report problems. In the event that a problem arises, we address it quickly and fairly.


    Despite its growing popularity in Australia, solar power is not without its drawbacks. Solar panels can be used to generate electricity for local consumption or export to the grid. The effectiveness of solar panels is largely weather-dependent, and their pricing can range from $2,500 to $12,000. The silver lining is that solar power is decreasing in price. There are various benefits and potential drawbacks to using solar energy, but overall it is a great renewable energy alternative to consider.

    It requires nothing in the way of upkeep and has convenient features like wireless networking and sophisticated remote monitoring. A solution that seems too cheap at first glance may wind up costing more than a more sensibly priced system. Investigate your options thoroughly before committing to a solar installation company or making a purchase from them. Chemical reactions called the photovoltaic effect are utilised to convert sunlight into usable electricity. Solar photons provide energy to the outermost electrons of an atom, forcing them to leave their orbits and become free electrons when they strike the top n-type silicon layer.

    DC power is changed into usable AC power by an inverter. Solar panels consist of two layers of silicon, one of which is p-type and the other n-type. The most efficient solar panels are "monocrystalline" (sometimes called "black"), which use a very pure form of silicon organised in a single crystal. Extra costs may arise for home building, however installers can disclose their rates for common upgrades as part of the quote comparison tool online. To secure the mounting framework to the roof battens, installers will need to remove tiles and use specialised non-penetrating clamps.

    It costs extra to establish a solar energy system with a 3-phase inverter because of the property's 3-phase power supply, and it costs about $1,000 per kilowatt-hour (kWh) of battery capacity to have it all up and running. The best course of action is to get high-quality solar items. There are three easy indicators of a quality solar panel brand. Identifying the most financially solid solar installation businesses can be challenging, but Bloomberg NEF's top tier ranking might assist. You can learn if PV Evolution Laboratories has a physical location in Australia by doing some web research, as they perform independent testing once a year.

    For example, Solar Option checks a company's ABN, reads customer reviews, confirms an electrician's licencing, checks the Energy Contractors Register, and ensures that the company in question is accredited by the Clean Energy Council. Having been in operation for at least a year, having at least 20 five-star ratings, and an overall rating of four or above, and being certified by the Clean Energy Council to design and install grid-connected solar PV systems are the bare minimums.

    Content Summary

    • First, the science of solar energy is discussed, and then steps leading up to the acquisition of a solar energy system are outlined.
    • Investigate your options thoroughly before committing to a solar installation company or making a purchase from them.
    • For these reasons, silicon is used in the construction of nearly all solar panels.
    • Fortunately, as part of our online estimate comparison tool, we ask installers to break down their prices for these common extras.
    • Unless the switch is up to code, no licenced electrician will put solar panels on it.
    • In regards to selecting the best solar panels for your home, you may be feeling a little overwhelmed.
    • Although installing solar panels is a long-term investment that requires the expertise of licenced electricians, we advise only buying high-quality items from established brands.
    • If you want to know which solar panel manufacturers are the most secure financially, this is the list to consult.
    • The next step is to check online for evidence of a physical location and contact information for the company in Australia.
    • If you need to file a direct warranty claim and your original installer is no longer in business, this is a must.
    • Where to Look for a Trustworthy Solar Installation Business
    • It is more difficult to find a trustworthy solar installation business.
    • During the past 12 years, we have investigated and approved more than a thousand solar installation businesses to include in our comparison service.
    Scroll to Top