Page 7 of 9

Chapter 7

Solar PV


In just the last few years, solar photovoltaic (‘solar PV’) panels have become an affordable and popular way for homes around the world to save money while generating energy on their roofs. Their popularity is only expected to increase in the coming years as prices come down further and as grid electricity prices continue to increase.

This section covers the ‘solar panel basics’ - from system components to system energy yields and system sizing.

What is a solar PV system?

A solar PV system is usually comprised of a few key components:

  • Solar panels - which capture light and turn it into DC (direct current) electricity. There are number of ‘recipes’ for a photovoltaic cell, but the most common by far is silicon.
  • A central inverter or multiple microinverters - which convert DC from the panels electricity into appliance-friendly AC (alternating current) electricity. Inverters may also contain communications software that enables system performance monitoring from a distance.
  • Mounting - for affixing solar panels to the roof or mounting them on the ground.
  • Cabling - which connects the various parts of the system together.
  • Monitoring & control systems - which may be inbuilt into the system’s inverter or from a third party developer. Monitoring and control are not necessarily included in every system.
  • Batteries (optional - see Section 8 in this guide) - for storing excess solar energy for later use, among other applications.
A diagram depicts a solar panel mounted and connected by cabling to an inverter. This inverter splits off to an energy management system and a battery.
Types of solar PV systems

Solar PV systems can be grouped into three broad categories:

  • Grid-connected solar PV systems without batteries - where the house has the option to draw on the energy from the solar panels or energy from the grid. This has come to be the most common type of solar system in recent years. Little icons depict a home, a solar panel and a power line within blue circles.
  • Grid-connected solar PV systems with batteries - where the home maintains a grid connection but can also draw on either their solar panels or batteries as a priority over grid electricity. This sort of system is expected to become widespread in coming years. Little icons depict a home, a solar panel, a grid power line and a battery within blue circles.
  • Off-grid systems - which usually contain both solar panels and batteries (but which may also contain a diesel or other generators), and are designed to enable a home to function completely independently of the grid. Off-grid systems were once the most numerous type of solar system until grid-connected systems became affordable and popular. They remain a great solution for meeting energy needs in remote locations, and are even becoming increasingly sought-after in urban locations. Little icons depict a home, a solar panel and a battery within blue circles.
Why go solar?

Solar panels have long been recognised as a source of clean energy, but have only recently gained their reputation as a smart way to save money. Depending on where you live, the financial attractiveness of going solar may rest on generous government subsidies, market-based mechanisms, how much sun you get, or some combination of these.

There are essentially four ways that homes can save (or earn) money with solar.

  • Solar self-consumption, where the solar energy is used directly by the home to reduce their electricity bill. In this case, the more energy you consume during daylight hours, the more money you will save. (Self-consumption can be augmented with battery storage, which allows excess solar energy to be stored for later use.)
  • Solar feed-in tariffs or net metering, where the solar energy is sold into the grid at a subsidised rate - thereby earning the home credits on their electricity bill. In this case, the more energy you send into the grid, the more you will save.
  • Renewable energy certificate programs, which may serve as an additional revenue stream for solar system owners unrelated to self-consumption or solar feed-in incentives. (Note that some certificate incentives are applied directly to the cost of the system.) In this case, the more solar energy your system produces (in total), the more you will earn.
  • ‘Solar leasing’ or ‘solar power purchase agreement’ (PPA) programs, where the home has access to a discounted electricity rates via a solar system installed on their roof (which is owned by a third party). With a solar lease/PPA, you can think of the solar system on your roof as just another power plant selling you electricity - except that instead of being a large, far-away coal plant, it’s a small, local solar farm. The amount that you can save through a solar lease/PPA depends on the terms you’ve reached with the provider.
A clear blue sky reflects of a steal blue set of solar panels. Dramatic white clouds dance along the horizon behind the top of the solar panels.
A diagram depicts a home situated with a solar panel on its roof. The Sun is positioned above the solar panel. Cabling runs from the panels on the roof to a battery and monitoring system positioned on the ground. The battery is connect to an inverter that turns the green path of electricity to orange. This orange path connects to a washing machine, providing is solar power to run. 
When should you go solar?

The cost of solar power is coming down dramatically around the world, even as conventional, fossil-fuel based forms of generation increase in cost. In fact, solar power is now one of the most affordable forms of electricity generation anywhere (c.f. here).

Falling solar costs and advancing technologies may lead some people to assume that it is better to wait before investing in a system, but there are several compelling reasons to take action sooner rather than later.

  • Incentives are disappearing - the government-backed subsidy and support programs initially put in place to support solar through its early days are being reeled back around the world as solar prices fall ‘naturally’.
  • Grid energy prices are steadily rising- putting off going solar means more time (and money) spent paying higher electricity prices.
  • Advances in solar technology have become slower and more incremental over the past few years - which means that there are not likely to be any game-changing ‘breakthroughs’ commercially available in the near future.

Talking about solar system capacity & yields: Kilowatts vs kilowatt-hours

Solar system capacity is usually discussed in terms  ‘kilowatts’ (kW) or ‘kilowatts-peak’ (kWp) as opposed to the number of panels. These days, 1 kW of solar capacity is usually made up of about 3 or 4 solar panels, depending on the wattage of the panels in question (1 kilowatt equals 1,000 watts).

The kW or kWp figure refers to the amount of instantaneous power that the panels are capable of producing when they are fully exposed to the sun at a 90 degree angle. For example, a 2 kW solar system would have a peak output of 2 kW and a 3 kW system an output of 3 kW, etc. Throughout the course of a day, however, a system’s output will rise and fall - lower in the early morning and late afternoon when the sun is lower in the sky, and highest around the middle of the day.

Energy yields for a solar system over the course of the day are usually discussed in kilowatt-hours (kWh). For example: If a 1 kW solar system produces electricity at its peak output for an hour, by the end of that hour it will have generated 1 kWh (minus system inefficiencies - usually between 10-20%). If a 3kW solar system produces electricity at peak for an hour, it will have generated 3 kWh (minus inefficiencies).

As discussed in section 2 of this guide, kilowatt-hours are also the standard energy consumption units that will appear on your electricity bill. If your electricity bill includes a demand charge, this will be shown in kilowatts - the same unit used to describe a solar system’s instantaneous power output.

How solar panel tilt & orientation impacts energy production

The amount of energy that your solar system generates on a given day will depend not only on the sun’s position in the sky, but also the tilt angle and orientation of the panels themselves. In the northern hemisphere, a south-facing panel array will generally deliver the highest energy yields, while due-north is the ideal for the southern hemisphere. For tropical regions, solar system yields will be greatest when the panels are mounted flat or nearly flat on a roof.

Panels may also face in easterly or westerly directions, although overall yields in these cases will be lower than a system that faces the equator. East-facing solar arrays will reach their peak output around mid-morning, while west-facing arrays will reach it in mid-afternoon. Solar arrays that face away from the equator are not generally recommended because of the degree to which energy yields are negatively impacted, but may be a good option where no better orientation is available and where the cost of a solar system is low.

Depending on your geographic location, you can generally expect anywhere between about 3 to 6 kWh of solar energy yield per 1 kW of solar capacity on average throughout the course of a year. To get a more detailed idea of the solar energy potential of where you live (anywhere in the world), visit the National Renewable Energy Lab’s PVWatts calculator tool at

...and don’t forget about shading

Also keep in mind that even partial or intermittent shading on your solar panels can potentially have an impact on your solar energy yields. Where shading looks likely to be an issue, consider trying to remove or avoid the source of the shading at the design stage, or investigate microinverters (or similar technology such as power optimisers) to mitigate its impact.

How much solar capacity do you need?

There are a range of factors that influence which size system is best for your home. Assuming that your primary goal in going solar is to maximise savings or revenues, the first thing to consider is what size system achieves this goal. Also keep in mind is that you may want to consider a larger capacity system if the tilt angle or orientation are less than ideal in order to make up for reduced energy yields.

Grid connected solar systems

The ‘right’ size for a grid-connected solar system depends heavily on your needs & budget, the incentive structures for solar where you live, and whether you own or lease your system.

  • If there is a generous solar feed-in tariff in place where you live and no limits on solar system size, the system size limit is essentially what your budget and roof space allow. In reality, however, most governments put controls or limits on allowable system sizes based on the physical limits of the networks or the customer’s own needs (to prevent the customer from installing a system purely for profit).
  • If there is no generous feed-in tariff incentive, aim to choose a solar system that meets your daytime energy needs - this will help you avoid purchasing electricity from the grid during the day, thus saving you money on your electricity bill. Batteries (see section 8) can help you to ensure that most or all of your solar energy is put to use directly within your home.
  • If you are signing up for a solar lease or PPA, the company providing the system will recommend the optimal system size for you.

Off-grid solar systems

Designing an appropriately-sized off-grid solar system is significantly more complex than designing for grid-connection. This is because an off-grid-connected home must rely on their solar (and/or batteries) to meet 100% of their energy needs; as the grid is not there as a ‘backup’.

Best practice for an off-grid solar system that does not incorporate a diesel, petrol or other generator is to size for 3 to 5 days of ‘energy autonomy’ - full energy self-sufficiency. In order to achieve this, both the solar and battery capacity need to be substantially larger than a standard grid-connected system. ‘Peak demand’ (i.e. the highest points of demand throughout the year, in kW) is another consideration for off-grid systems that isn’t as relevant in grid-connect systems - not sizing the system to meet peak demand could result in frequent blackouts.

Because of the complexity and higher capital costs, anyone interested in going off grid should consult with professional off-grid system designers before making a decision.

Why solar is better with energy management

As discussed above, getting the most value out of a solar system depends on your circumstances. An energy management system can help to maximise the benefits, regardless of your situation.

Enquire today about how carbonTRACK can help you.


In the next chapter, we’ll have a comprehensive overview of home battery systems.

Back to Contents
Get a free copy of this guide here

Enter your details and we’ll send the guide right to your inbox!