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Grid-interactive solar

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Two million rooftops and counting

Grid-interactive solar is more popular than ever in Australia with around 3.5 million panels installed on Australian homes and businesses last year alone. Solar systems are affordable, grid electricity is becoming more expensive and every system installed helps the environment by placing clean renewable energy into the electricity grid.

Today new battery storage can be added to grid-interactive solar power systems to enable householders to use solar electricity when it suits them.

Read on to find out more, or use our Free Solar and Battery Advice Calculator to plan a solar PV system that cuts your electricity bills and generates clean energy for years to come.

Today more than 1 in 4 houses own a solar electricity system. Image by David Tooby.

Sunlight on the solar panels generates Direct Current (DC) electricity. This DC electricity is fed into a solar inverter that converts it into Alternating Current (AC) electricity that regular household appliances use. At any instant, your appliances get the first call on your solar generation and if there’s excess, it’s immediately exported to the grid.

That’s how a grid-interactive solar power system works at least, which is the most popular set-up in Australia at the moment. The two other system types are hybrid, which is like a grid-interactive system but with the addition of batteries to store energy for use later in the day, and off-grid, which also uses batteries to store energy. Off-grid systems are generally used by homes without access to a grid connection in rural or remote areas.

Renew’s Solar Electricity booklet explains these three main types of solar electricity system, including how they work and the pros and cons of each one, and Renew magazine’s Solar Panel Buyers Guide always gives the best overview of the panels available.


Our organisation has been around since 1980 when a group of environmentally conscious enthusiasts concerned about fossil fuels and pollution came together. While household solar was still a long way off in Australia, the early members shared small DIY solar projects in their magazine (now Renew magazine). They were the first to install PV panels when it became possible, often at great expense, and then opened their homes so others might go on to do the same.

Solar is no longer a novelty with solar panels becoming a common sight on Australian roofs in the last decade. Today more than one in four households own a solar PV system according to Roy Morgan research. Installations are booming with 1057 megawatts of small-scale renewable energy systems installed across homes and businesses in 2017, the equivalent of 3.5 million solar panels. This figure had already been surpassed before the end of 2018 – over 45,000 solar PV systems were installed across Australia between April and June alone according to the Clean Energy Regulator.

A recent Sanctuary article about long-term Renew member Stuart McQuire explains some of the triggers for the solar boom. Stuart’s roof became home to Australia’s second installed grid-interactive solar PV system in 1996. The 2kW system was around the price of a small car at the time and was the first to be connected to the grid in Victoria. Since then he’s installed a second 1.5kW solar PV system under very different circumstances, in 2009, when a premium feed-in tariff of 60 cents per kilowatt-hour came into effect.

This is around the time Australia’s PV boom started. The global retail price for solar suddenly halved from the $12 to $14 per watt for the early solar power systems, to around $6 per watt. Plummeting solar costs coincided with the introduction of feed-in tariffs paid for any electricity sent back to the grid.

Feed-in tariffs have fluctuated since then, but still the economics of solar have never been better today. Current installed prices range from $2 to $1 per watt, and lower for really large home systems.

Household solar is now entering a new exciting phase, where the economics have shifted to the point that large residential systems, per panel, often achieve payback faster than smaller ones (take a look at our Solar Sizing: Bigger is Better report) and households might be able to take advantage of new battery technology in the next few years, when the technology is predicted to become more financially viable.

Stuart McQuire and Wendy Orams were second in Australia to install a grid-connected rooftop PV system and haven’t paid an electricity bill since 1996. Left image: David Johns. Right images: Taken half a lifetime ago now, these CitiPower snapshots appeared in promotional materials throughout the 1990s.

When planning a solar electricity system, it’s important to understand how much energy you use at home and when you use it. Add the system when the building works are finished and you’ve lived in the house for a while, so you can better understand your electricity needs.

If you’re planning a solar-friendly house or renovation then a broad, sunny roof is a real asset. A north-facing roof is best, especially in southern states like Victoria and Tasmania, but west and east-facing roof surfaces are good too.

Think about the pitch angle of the roof on your new home. If the roof pitch is less than about 10 degrees, you might need costly tilt frames to improve solar access.

Shaded roofs are poor for solar so be aware of future building construction and tree growth. Even partial shading of a single panel can have a major impact on a system’s effectiveness. You can find out more about shading issues in the Sanctuary magazine article Right to light: solar access and the law.

Focus on energy-saving measures such as house orientation, window placement, eaves, double-glazed windows, wall insulation, heating and cooling options and efficient appliances when building or renovating. Unlike solar, these measures are hard to retrofit later on. A well-designed, energy efficient house will use much less electricity, leaving you more to export to the grid or store in your batteries for later use.


Every house is different and as a result so is planning each solar PV system. It’s a good idea to get early, independent advice such as a Renew’s Energy Consultation.

A householder shared his recent experience installing solar, including modelling the economics, choosing the technology and installation in the Renew magazine article Getting solar: from research to install. He assumed that solar wouldn’t be worth it with very little north-facing roof to speak of, but discovered that an east/west array would have benefits he hadn’t thought of including being able to use solar electricity before and after work.

Two free tools can help you better understand your proposed solar electricity system. Renew’s Sunulator can model quite specific scenarios based on actual electricity consumption and a proposed configuration eg. east/west facing panels and batteries. Renew’s Free Solar and Battery Advice Calculator is a simpler tool that gives an indication of the financials without the full modelling of Sunulator.


If you’ve got an old solar system you may be considering adding extra solar panels or making other changes. This is possible, but you need to consider that standards have changed in this fast-paced industry. In some cases changes to an existing system require so much work that it’s more cost-effective to remove it and replace with a new, bigger one. A new system has the advantage of the STC rebate, which is based on the capacity of new panels.

Some households that installed solar PV systems around 2013 or earlier are still receiving legacy high feed-in tariffs. These often have strict conditions about modifying or expanding the system.

The Renew magazine article Can I upgrade my solar? discusses the straightforward, and harder aspects, of making changes to a solar system.


Many households want to know if their bill savings will be big enough to justify a solar electricity system.

The clearest answer to this can be found by working out the payback time of a proposed system, which is how long it takes for electricity bill savings to cover the installed system cost.

Renew’s Free Solar and Battery Advice Calculator can help you work out the cost, bill savings and payback times of a planned system in just a few minutes.

With the current low cost of solar panels, today’s grid-interactive systems should pay for themselves between 3 and 10 years, depending on factors such as location, grid tariffs and patterns of electricity consumption. Quality solar panels last at least 25 years, so that initial investment should repay several times over compared with the cost of buying electricity from the grid.

A grid-interactive system with batteries (a hybrid system) is harder to justify at the moment because the payback time of adding batteries is generally longer than the 10-year battery warranty. An exception is where your batteries are heavily subsidised, for example as part of a Virtual Power Plant program. The economics will change in the future with the price of batteries expected to fall due to technology advances and economies of scale.

Don’t let current battery prices deter you from the benefits of grid-interactive solar now, batteries can be added later. Visit our Batteries and Energy Storage page for more information.


At first glance it seems unfair that you pay 30 cents (for example) per kilowatt-hour (kWh) of energy imported from the grid, while your retailer might only pay you 10 cents for energy you feed into the grid. However the tariff that you pay includes many components.

Your electricity retailer must buy energy from generators to cover each kWh you import – this may cost say 9 cents. They must also must pay the local distribution network for the use of their service, for example 15 cents. Then the retailer also must cover their own costs plus profit for shareholders.

For the retailer, each kWh you export only saves them the energy component at 9 cents.


Using solar power at home is one way of the best ways to help reduce the impact of climate change.

Solar energy is an abundant renewable energy source that doesn’t create any pollution. All generation from grid-connected solar panels displaces electricity from centralised power stations, reducing greenhouse gas emissions in our atmosphere. When you generate excess solar, that electricity flows into your neighbours’ homes, displacing their use of centralised power generation.

A grid-connected solar system typically only takes a year or two to save enough energy to offset the energy required to manufacture and transport its panels, inverter and other components. The Renew magazine article Energy flows: how green is my solar? looks at the embodied energy of renewable energy systems in more detail.

There are other ways to support the generation of renewable energy to displace fossil fuel-based energy from the electricity grid, including buying accredited GreenPower or carbon offsets from Community Climate Chest (C3), a non-profit initiative administered by Renew.

C3’s calculator can help you work out how much GreenPower or offset’s you’ll need to cover the greenhouse gas emissions from your household electricity use.


A competent and skilled solar installer will deliver a reliable, efficient system, so it’s important to choose the right one. As with any tradesperson it is best to get multiple quotes, ask questions and obtain references. Word-of-mouth recommendations are always useful, as are online reviews and internet discussion groups.

Choosing a locally-based solar business that’s been around for a while can offer peace of mind that there will be someone on the ground to help enact any warranty issues or fix problems down the track. Such businesses are likely to do an on-site quote, which lets you get a feel for the business and helps avoid unexpected hassles on the day of installation.

If you are talking to a large solar retailer, you should refer to the Clean Energy Council’s Approved Solar Retailer list These companies have been approved by the CEC as demonstrating their commitment to responsible sales and marketing activities and take responsibility for their sub-contractor installers. Large solar retailers often have very competitive pricing, but are unlikely to do an on-site quote.

The installer must be an electrician and accredited by the CEC for solar installs – you can check the list here. Some installers also have additional qualifications such as CEC Approved Solar Retailer or Australian Solar Council Master Installer. These provide a higher level of quality assurance, however be aware that good installers don’t necessarily have these certifications.


One common reason is that the voltage in your local electricity grid is going too high, for example 258 volts instead of the normal 230. When this happens your inverter will automatically reduce its output or switch off entirely.

You can often check the voltage on the solar inverter’s screen, or via an inexpensive power meter plugged into a household powerpoint. The next step is to call the local distribution network (noted on your bill). They may be able to adjust your nearest electricity transformer to reduce the voltage.

This issue can be aggravated by poor solar installation, for example if the cable between the solar inverter and house switchboard is not thick enough.



Visit our Batteries and Energy Storage page for more information.


An off-grid home has no connection to the electricity grid. Most off-grid systems are in homes in remote locations where the householder would have had to pay tens of thousands of dollars to have a grid connection installed.

Visit our Off-grid Solar page for more information.

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