Sunny Days.. A Solar Panel Installation Guide

Why Go Solar?

The question shouldn’t be why, rather why not go Solar! If you live in Australia, we are blessed with around 300 days a year of glorious sunshine and long summer days even with La Niña making this summer a bit of a dampener. That is a lot of free electricity to cover your daily needs. You can also get paid by your retailer for whatever you don’t use by feeding it back to the grid. Solar installation costs have also come down significantly so you can recoup your investment (ROI) fairly quickly to achieve pure savings. Solar is also clean, green and renewable as it comes from a natural and endlessly abundant source. Here is a rough guide based on my experience with my own solar panel installation and what lessons I learnt along the way. This is more of a beginner’s guide rather than an advanced guide.

What are the main components of a solar panel system?

There are 4 main components of any solar panel system.

• Solar Panels – The solar panels themselves which are assembled on an array on your roof.
• Solar Inverter – The inverter is a generator that converts the DC power into AC power so that it can be used. This usually sits on a wall next to your electricity meter
• Smart Net Meter – A smart net meter allows you to send and receive electricity to the grid whereas a conventional electricity meter can only receive electricity. You might require an upgrade to your existing meter if it is not a Smart Meter
• Battery – This is an optional component if you wanted to store or save your energy to consume later. Battery prices are still high though they are coming down so your ROI (Return on Investment) needs to be worked out before investing in a battery.

Installation Checklist

1. Smart Meter – Find out from your retailer if you already have a Smart meter installed – If not, you will need to arrange to get one installed which can take some time. A Smart Meter allows you to feed excess solar back to the grid
2. Phase – Confirm if your power is single phase or three phase. This might also influence your inverter size
3. Roof + Panels – Based on the size and aspect of your roof this will determine the the number of panels which can fit on your roof. Most individual panels generate between 250 to 400 watts each so this will determine your overall output.
4. Panels & Inverter – Shop around and find three reputable Solar Installers who can install Tier 1 Solar Panels + a good Inverter. Generally there is a 4:3 ratio so if you can get 6.67kW total output from your panels, you would require a 5kW inverter. Go big!
5. Reputation & Longevity – Make sure the Installer is “CEC Approved” and find out how long the Installer has been in business. Try to get two references from existing customers
6. Warranty – Make sure you obtain at least a 25 year warranty on panels + 10 years warranty on the inverter. The warranty should cover installation and include both parts & labour
7. Wifi & Battery Ready – Check the inverter has WIFI, an App to monitor daily output and is “battery ready”
8. Hidden Charges – If your house is double storey, make sure that you are aware of any additional charges
9. Panel Removal – Ask your Installer to include removal of any old panels to free up space + avoid warranty issues later
10. Notice of Completion – Get a Compliance Certificate after Installation to provide to your Retailer
11. Support – Find out if they provide sales and technical support and how they can be reached. Try calling the number
12. Negotiate – Negotiate the package with your Installer (inverter + panels + installation) and work out your Payback or ROI
13. Billing – Contact your electricity retailer to advise you are getting Solar – update your billing to optimise for solar. If your retailer does not have competitive solar offerings (e.g. strong feed-in tariffs), strongly consider changing retailer.

Other Considerations

• Micro Inverters & AC Panels – Rather than have one inverter for the entire system, this has mico-inverters for each panel which means that each panel is monitored and optimized individually to generate maximum power. It also means that if a panel fails this can be identified and replaced individually rather than having to replace the entire array. Trade offs are cost and complexity as there are more components which can fail.
• Poly Crystalline vs Mono Crystalline Panels – There are differences in efficiency and pricing. Poly is slightly less efficient than Mono but is also lower priced.
• Batteries – Batteries are still expensive so have not been reviewed as they would blow out ROIs but prices are coming down so it may be worth looking into depending on your requirements

What Questions will my Installer Ask?

1. NMI – What is your NMI number? This can be found on your bill
2. Retailer – Who is your Current electricity retailer and distributor
3. Phase – Whether you have single phase or three phase
4. Roof – A picture of your roof (they can usually source)
5. Meter – A picture of your electricity meter

What do I need to do once my Solar has been installed?

1. Notification – Once your solar is installed, send the certificate of completion to your retailer to notify the distributor so you can start receiving feed in tariffs on your bill (get paid for the excess solar you generate)
2. WiFi Connect – Connect your Solar Inverter to your Wifi to measure how many kWh is being generated on a daily basis. You can view this directly on the inverter while it is turned on but it is easier to have this on the Inverter’s App. You can also setup your Electricity Retailer’s App to view how much kWh you consumed and how much you sent back to the grid.
3. Monitor – Once you are connected, you can measure and monitor your daily consumption, usage and feed

How do I calculate my Payback or Return on Investment (ROI)?

Payback or ROI is how long it would take you to recover your upfront installation costs and start generating pure savings. This can drive your decision around when to proceed now, install higher output panels or to wait until you have moved house, etc. To calculate your Payback or ROI. what you would need to work out is how much solar energy you would get paid for feeding back into the grid (savings) and roughly when your total savings would equate to your upfront installation costs * This formula would give you your payback period or ROI in years. Below is a simple example where I have worked out the Payback or ROI for a 7.7kW solar panel system based on the number of panels and output per panel to derive an hourly output. I have conservatively multiplied the total hourly output of 7.7kWh x 4 hours of daily sunshine to factor in cloudy days, etc to calculate a total daily output of 31kWh. This total daily output of 31kWh multiplied by the feed in tariff (FIT) of 21c which is typically lower than electricity rates but being conservative gives you a daily FIT credit of $6.53. Divide this daily credit by your total cost of installation of $5000 and your Payback or ROI is 2.1 years. This means after roughly 2 years, you have recouped your total upfront costs and every day thereafter is pure savings.

Install Cost	Panels	Watts	Total Output per Hr	Feed-In Tariff	Daily Sun Hrs	Daily kW	Daily FIT Return	Annual Return	ROI
$5,000.00	21	370	7.77	0.21	4	31.08	$6.53	$2,382.28	2.10

My solar panels were installed back in January 2018 and I had calculated my ROI to be 2-4 years but actually achieved it in around 20 months so it was well within 2 years. When calculating ROI, you can disregard government rebates or STC credits as they have significantly reduced and are already built into the pricing you would be quoted by your Installer. Based on my ROI, I also decided to hold off on purchasing a battery due to the high upfront costs but might revisit this decision as costs reduce.

* Note – This formula has been simplified to exclude consumption as any electricity that you consume directly as the cost of electricity would always be higher than your feed in tariff you would get paid so this is taking a more conservative figure.

How can I optimise my Electricity Billing for Solar?

Billing is an absolute minefield. Since deregulation, private retailers have flooded the market which has been great for consumers as it’s led to more competition and lower prices. However, it means retailers also have to differentiate their products and plans in order to win your business. This makes their billing at times complex and confusing, making it difficult at times to compare retailers. There are a few key variables to consider when it comes to billing and selecting the most suitable retailer

1. Feed-In Tariff (FIT)– Feed-in Tariff is what you get paid for the excess solar energy you generate. If you are generating a lot of electricity from your solar panels and are not using everything that you produce and you are not planning a battery then “feed-in tariff” is king. At the time of originally publishing this article, the highest feed-in tariff in the market was 21c per kWh. This means if you produce 40kWh in a day, consume around 15kWh per day and feed back 25kWh to the grid then you will get paid a feed-in tariff of 25x21c = $5.25 per day. Note – Plans which have a higher feed-in tariff can have a higher electricity rate and less discounts so you have to do your sums but generally speaking if you are generating a lot of excess electricity and do not have a battery to store it, the higher FIT plans would be more favourable.
2. Electricity Charges – This is what you get charged for electricity and it can vary from 17c to 30c per kWh at the time of this article. The charges for electricity can be higher for plans with a higher feed-in tariff so there is usually a converse relationship between electricity rates and FIT rates. There are also plans that have rates based on “time of use” which are peak, shoulder and off-peak. A good retailer should be able to advise you on the most suitable plan based on your usage. If you are already on time of use metering, it would be good to review your bill to add up your total consumption and work out your average rate per kWh to see whether you are paying less or more. Note – Time of use rates can vary depending on your Distributor e.g. Endeavour and AusGrid have different rates.
3. Discounts – Some electricity plans offer a pay on time discount of up to 30%. This is usually not available for plans with a higher feed-in tariff but the savings from a higher FIT can often offset the 30% discount depending how much electricity you generate. Some Retailers also offer bundle discounts for combining electricity with gas, phone and internet. Others offer a low income rebate for pensioners, etc so it pays to do your sums when comparing retailers and also check periodically as the market changes frequently.
4. Daily Supply Charge – This is a daily fixed rate to supply electricity to your premises so it is not impacted by solar but it can vary depending on your electricity plan!

Conclusion & Final Tips

Solar is definitely a worthwhile value proposition, especially in Australia with our ample sunny days. However, it’s important to choose a reputable installation company and good brand of panels and inverter. Once you have completed your Solar installation, you can look forward to zero bills as your solar energy should cover your electricity consumption and more. It may also tempt you to consider getting an electric car in future as you will have free fuel pump available at home!

My Tips if you are considering going Solar are

• Just do it – The payback is pretty quick so you will get your ROI pretty fast
• Go big – Get the biggest solar panel system you can afford (highest individual panel output x number of panels).
• Shop around – Shop around for Installers and Retailers. It’s a very competitive market
• Monitor Usage – Get the Installers to help you to setup the Inverter App and Monitoring on the day
• Review your Bills – If you are not getting zero or negative bills then tweak your billing type or change retailers

Hope you enjoyed the article and please feel welcome to leave me a comment below. Wishing everyone Sunny Days!

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