Updated on August 12, 2025
Welcome to the PSC Energy Introduction to Solar Systems!
If you’re interested in solar, you’ve probably done a quick Google search. It might have been a bit overwhelming. It’s a lot to take in.
Don’t worry, this cheat sheet was designed just for you.
The purpose of this guide is to help you learn about solar energy. That’s it. We’re not selling anything here. While our business does sell, install, and service solar systems, that’s not what we’re about here today.
This overview of solar is going to follow the below table of contents.
- Main Components of a Solar System and What They Do
- Why a Good Installer Matters More Than Equipment
- Installation Basics: What to Expect on Your Roof
- Sunlight to PowerPoint: How Electricity Flows from Solar to Your Home
- What Size Solar System Should You Buy?
- Solar Rebates for Australia
- An Unbiased Perspective on Solar Pricing
- How to Calculate Your Payback Period for Solar
- Solar Batteries and Why You Might Consider One
We are educators first today. Please enjoy the enclosed information. By the time you finish this guide, you’ll be able to confidently understand what to look out for in a solar system and what questions to ask your solar sales consultant – even if it isn’t us.
Note for Newbies: The phrase “solar energy” is a catch-all phrase we hear used when talking about solar systems. However, power and energy are not the same thing. In layman’s terms, power is electricity in motion, like when it is travelling through a cable, and energy is electricity when it’s stored up in a battery.
Add the word “solar” at the beginning of either of those words and you’re referring to electricity that was harnessed from sunshine. Solar power is electricity moving from the panels to your home, and solar energy is stored in the solar battery.
The unit of measurement for solar power is kilowatts (kW), and for solar energy it’s kilowatt hours (kWh). Kilowatt hours are how you read your energy bill. It’s not only stored in your solar battery, it’s a measurement of power over time.
Those new vocab words are all you need to know before you dive in.
If you’re interested in learning a bit more about power and energy, you might want to check out the following article titled, Power vs. Energy: kW vs. kWh.
Let’s jump into our New to Solar Guide!
Main Components of a Solar System and What They Do
There are five main components to a solar system:
- Sunshine
- Solar Panels
- Inverter (or Microinverter)
- Mounting System
- Consumption Monitoring App
Each plays a critical role in harvesting homegrown electrons.
Sunshine: The sun is 150,000,000 kilometres away, give or take a few thousand k’s. Sunlight travels from the sun to planet Earth in the form of radiation that we call sunshine.
That radiation has a spectrum of characteristics, some are detectible by the human eye like colour, and some are not, like ultraviolet radiation.
It’s the ultraviolet radiation that concerns us. The ultraviolet radiation hits the solar panels on the roof of a home or business, where it is transformed into DC power.
Solar Panels: Solar panels are big, flat, dark sheets of silicon and metal. Individual solar cells, which you can see as a grid work under extremely tough glass, are composed of silicon semiconductors.
When ultraviolet radiation (sunlight) shines on the semiconductors, it excites the electrons in the solar cells.
The free electrons follow the path of least resistance and move towards the surface of the solar cells. This creates a current. This is how DC (direct current) electricity is produced. That’s what the solar panels do. They generate DC power.
We won’t get too technical here. Just the basics. Unclench your shoulders and have a stretch if you’re getting overwhelmed.
Inverter (or Microinverter): From this point forward, there’s some variation in how the solar system works based on what type of technology the solar system uses.
If it’s a central inverter solar system (sometimes called a “string” system), the DC electricity travels through cables to a central inverter. The inverter is usually located on the side of the home near the main switchboard.
The inverter’s job is to convert all that wonderful DC power into AC power for the home to use. Think of your inverter as a translator: your solar panels speak one language, and your home speaks another one.
If it’s a microinverter solar system, then the microinverter is responsible for the conversion to usable electricity for the home. It works exactly like an inverter… but micro. Instead of one central inverter, each solar panel has a microinverter mounted underneath it.
The DC electricity is converted to AC (alternating current) electricity before travelling through cabling to the home or battery.
Mounting System: When you look at solar panels on a roof, you only see the panels. They are securely attached to the roof by a metal frame underneath them. That metal framework is made up of multiple, smaller, metal components that are assembled to form the solar mounting system.
Consumption Monitoring App: That’s a meaty phrase. It’s got syllables. Don’t worry, it’s just a noun that describes a verb. Consumption monitoring is a combination of software and hardware that allows you to track your solar electricity use. That’s all.
Consumption monitoring is considered by some in the solar industry to be an optional feature for solar systems. We disagree. Without it, you’re blind to how much energy your home is using and when.
Everyone uses electricity differently, so your patterns may not be the same as your neighbour’s. With consumption monitoring, you can see your usage patterns and make changes. This information (when applied) can save you a ton of money.
We feel it’s a necessary part of every solar system. You wouldn’t drive a car without a speedometer, right?
If you’re interested in learning a bit more about the importance of monitoring and programming your energy, you might want to check out the following article titled, What is Consumption Monitoring?
Why a Good Installer Matters More Than Equipment
One of the biggest decisions you can make about your new solar system is who you will get to install it. It’s a big choice regardless of who you choose. You want your solar system to work well, look good, and complement your lifestyle.
A bad installation will look like crap and underperform at best. At its worst, a bad installation is unsafe. Don’t forget that all solar systems are mini power plants up on the roof. Getting a good quality installation is key.
In Australia, there are generally two types of solar business models: in-house and sales/subcontractor.
An in-house solar installer is a type of business that offers top-to-bottom, inquiry-to-installation solar systems installation and servicing.
They are certified by the government to install solar. They will handle your questions and installation from the moment you reach out to them to the moment they set up the consumption monitoring app on your phone to fulfilling your warranties.
The sales/subcontractor business model for solar installation is a little different. The sales company works with you to design a system that meets your unique energy needs and goals. They then hire a subcontractor to install the system. The work is divided between two entities.
If you’re uncertain about who to hire for your solar installation, we recommend you get multiple quotes from multiple installers.
There are websites like SolarQuotes or SolarChoice out there that make money by collecting your information and selling it to installers like us. They are a wonderful place to look for additional quotes.
Read the reviews for different solar installers. Google, Facebook, and review sites like the above are a great place to look for consistency in solar installers’ reviews.
If you’re interested in learning a bit more about the importance of a good installer for your solar, you might want to check out the following article titled, In-house Installers vs. Subcontractors: Which is Better?
Installation Basics: What to Expect on Your Roof
We live in Australia. The vast and mysterious Southern Hemisphere. The sun makes its way across the sky to the north of us here in the Sydney metro area. So, your solar panels should face north, right? That should maximise productivity, right?
That’s absolutely a trick question. While the compass direction your solar panels will face does play a part in productivity, there are many other factors to consider.
Remember the sun rises in the east and sets in the west.
Panels that face eastwards will harvest sunlight in the morning effectively because the panels are facing the sun when it says good morning every day.
Panels that face westwards will harvest sunlight in the afternoon/evening more effectively because they’re facing towards the sunset.
And while northern-facing panels generally, in an overall way, produce more energy, they struggle to keep up with an east/west split. Especially in the early morning and late evening.
It’s far more important to consider when you’re using your energy than how much light the northern face of your roof will receive in the summer.
Let’s look at what’s happening outside the house first. Much like The Drifters 1962 classic, we’re going Up On the Roof.
There are a few key terms that we’ll use as we discuss solar panel placement on the roof. They are:
Pitch: The pitch (angle of your roof or panels) affects how directly sunlight hits the panels. In general, the optimal pitch for solar panels for most homes in Australia is around 30-35 degrees because of where it is located on planet Earth in relation to the sun.
Angle: You’ve taken geometry, so you know this term, but it’s been a few years. The angle of the sun and how it relates to your solar panels is what we’re concerned with here. When we install solar panels, the angle of the sun’s rays and how they interact with the pitch of the roof is important.
For optimal efficiency, you want to install solar panels at an angle so that the sun’s rays will hit it at a 90° angle.
Here’s the thing: how can you get the right pitch for your solar panels that’s going to maximise efficiency year-round?
You can’t. The sun moves in the sky from north to south and back to north again depending on the season. In the summertime, the sun is high in the sky and your panels will produce more than average. In the wintertime, when the sun is low in the northern sky, your panels will produce less.
We recommend you be mindful of pitch and angles without getting too hung up on this. It’s important to know what’s happening to your roof, and your solar installer will be able to walk you through this in a way that is unique to you. After all, your roof will be different from your neighbour’s.
If you’re interested in learning a bit more about which way to point your solar panels, you might want to check out the following article titled, Which Way Should Solar Panels Face in Australia?
Sunlight to PowerPoint: How Electricity Flows from Solar to Your Home
Your home will interact with your solar system in one of two ways: it gets too much electricity from it, or it gets too little electricity from it.
When your home is getting too much electricity from solar, the power is exported to the grid for something called a feed-in tariff. Your energy retailer will pay somewhere between $0.04 – $0.15 per kilowatt hour you export to the grid.
When your home is getting too little electricity from solar, your home will import electricity from the grid to keep the lights and appliances running when your solar is lagging. Of course, you have to pay for that electricity. As of this writing, it’s about $0.38 per kWh on average.
As you can see, a feed-in tariff payment is considerably less than what your energy retailer is charging you for electricity. This is the power of solar: that self-consumed power is valuable.
If you’re interested in learning a bit more about feed-in tariffs, you might want to check out the following article titled, Understanding Feed-In Tariffs and Their Limitations.
What Size Solar System Should You Buy?
This is one of the first questions anyone asks when it comes to purchasing a solar system. After all, you need to understand how much it will cost, and the cost is often reflected by system size.
The answer to how much solar you should buy is this: as much solar as you can fit on your roof without breaking the bank.
We’re not saying that to trick you into buying more than you need. The reality is that energy is getting more expensive (along with everything else), and your electricity needs will grow as electric vehicles, and other renewable products enter our lives.
The most solar you can install will be different from household to household. Roof space is the biggest deciding factor, and most homes in the Sydney metro area have a unique roof. This is when a good installer comes in handy: they will know how to maximise your roof real estate.
Another important consideration when installing solar has to do with inverter limitations laid out by your local energy distributor (DNSP) and how the grid connects to your home. The ins and outs of this can also be handled by a good installer. They will know how to give you the system you want within the limitations of a site.
In our many years of operation, we’ve never had a customer come back to us complaining about having too much solar on their roof. However, we have experienced customers coming back and asking to install more panels. For some systems, this can be a complicated and expensive process.
If you invest in a smaller system, you will most likely be disappointed by your winter production. There’s less direct sunlight in the winter months and a smaller system will struggle to produce energy for your home. There’s just less surface area harvesting sunlight in a smaller system.
If you’re interested in learning a bit more about export limits, you might want to check out the following article titled, What is the Export Limit in NSW?
An Unbiased Perspective on Solar Pricing
Not every solar system is created equal. Some leave off features, others include them, and there is a difference between cheap and quality solar.
Like all consumer products, you get what you pay for.
For many years, a 6.6kW system was the size many solar companies recommended. These days a more common system size is around 10kW. Our average is 11.7kW.
- 6.6kW system will range from $5,000 to about $11,000.
- 10kW system will range from $8,000 or so to about $14,000.
- 13.3kW system will range from $10,000 to about $15,000.
A good solar installer will break down that cost in an itemised quote that includes things like consumption monitoring along with panels, inverter, and a possible battery.
Another factor that’s quite important when pricing solar systems is the type of solar system you’re investing in.
As we mentioned, there are central inverter systems and microinverter systems.
- Central Inverter System will range from $0.60 – $1.00 per kilowatt.
- Microinverter System will range from $1.00 – $1.30.
How you determine which system depends on all we’ve discussed thus far. It really does depend on the home or the customer.
It’s very easy for costs to inflate when it comes time to work with you to get a quote you like. It’s possible you’ll need to upgrade your home from a single-phase to three-phase site. You might need a new switchboard. You will definitely need a new meter.
Deep breath, unclench your shoulders. We’re just trying to be transparent about additional costs that may or may not affect your payback period. Your home might not need any of that.
If you’re interested in learning a bit more about how microinverters compare to string inverters, you might want to check out the following article titled, Microinverters vs. String Inverters: An Honest Comparison.
How to Calculate Your Payback Period for Solar
How long your payback period lasts depends on quite a few variables. This is why we say every installation is unique.
- The size of your system is the first variable, obviously. Panels cost money, and the more you have the more expensive the upfront price will be.
- How much solar your system is producing. A larger-sized system will produce more energy and pay for itself faster than a smaller system lagging behind your energy needs.
- Consumption monitoring is useful to see how much you’re exporting to the grid and how much your energy retailer is paying you for that export. What’s your feed-in tariff?
- Then you need to understand how much your energy retailer will charge you for electricity in kilowatt hours. On average, in Western Sydney, $0.38 is about what you can expect. It will be higher during peak hours and lower in the middle of the day when everyone’s solar is pumping.
We hope it’s right to assume you’re here because of large power bills. Solar does, in fact, offset those bills. For every kilowatt hour you don’t import from your energy retailer, you’re saving $0.38 on average. This adds up to thousands per year.
Offsetting that charge is what solar does. It’s a giant energy coupon.
We mentioned exporting to the grid and feed-in tariffs. This is what happens when your solar produces more power than your home is using. The extra electricity is exported to the grid and your energy retailer pays you for it.
However, a $0.04 feed-in tariff doesn’t equal the cost of electricity. It’s always more cost-effective to save $0.38 than earn $0.04. Which brings us to our next section.
If you’re interested in learning a bit more about solar panels and energy systems, you might want to check out the following article titled, Are Solar Panels Worth It in NSW, Australia? A Price Breakdown for 2025.
Solar Batteries and Why You Might Consider One
Solar panels only work when there is sunlight shining on them. The sun does not shine all twenty-four hours in a day. This isn’t especially newsworthy. Even toddlers understand how shadows work.
However, if you add a solar battery to your solar system, you’ll be able to use energy from your panels when the sun isn’t shining on them.
The only way to fully self-consume your solar power is with a battery. Solar will cut your bills by 60% or so. A solar battery empowers you to get those bills to zero. It’s the only way to produce, store, and consume your homegrown electrons.
They’re also great for power outages. As climate instability affects our community, a solar battery provides protection that the grid can’t offer.
Unfortunately, they cost a pretty penny. To get enough storage to offset the rest of your energy bills, you’ll need around 10kWh of battery storage. It will cost anywhere from $8,000 to $18,000 or so. This all depends on brand and storage capacity.
If you’re interested in solar batteries, you might want to check out the following article titled, Are Solar Batteries Worth It in NSW? PSC’s Ultimate Guide for 2025.
Fortunately, the federal government has a solar battery rebate.
The Federal Battery Rebate in 2025
From July 2025, the federal government is offering a new rebate to help homeowners cut the upfront cost of installing a solar battery. It’s designed to make energy storage more accessible for households across Australia, especially as more people look to store their excess solar power and reduce their reliance on the grid.
The rebate amount depends on the size of the battery and is applied as a discount at the point of sale, so you don’t need to wait for a cheque to arrive later. To qualify, you’ll need to choose a product from the list of Clean Energy Council–approved batteries and have it installed by a CEC-accredited installer. This ensures your system meets safety and performance standards.
The program applies to new battery installations, whether you’re adding one to an existing solar system or including it in a brand-new install. While the rebate won’t cover the full cost (it’s about 30% off), it can make a meaningful difference to the payback period. For many homeowners, it’s the push that makes battery storage financially viable in 2025.
The NSW VPP Incentive in 2025
In New South Wales, the state government offers an incentive for households that join an approved Virtual Power Plant (VPP). A VPP is a network of connected solar batteries that can be remotely managed to store and release energy back into the grid when it’s needed most.
By doing this, your battery not only supports your home’s energy needs but also helps stabilise the grid during peak demand. You receive a rebate as a thank you. The exact amount depends on the program you join, as different VPP providers have their own offers and conditions.
To qualify, you need to choose a battery model on the approved list and have it installed by an accredited installer. Once connected, your VPP provider can draw small amounts of stored energy during high-demand events. In return, you receive financial benefits and may also access better energy rates.
For many households, the VPP incentive can reduce the upfront cost of a battery while adding a new stream of ongoing value. It’s a way to make your solar investment work harder for both you and the grid.
If you’re interested in learning a bit more about the federal solar battery rebate, also known as the Federal Cheaper Home Batteries Program, you might want to check out the following article titled, What the 2025 Federal Election and the Government Rebate Means for Solar Batteries in Australia.
Wrapping Things Up: Watt Are You Waiting For? Reach Out for a Quote!
Now you have a general overview of what solar is and how it works. This was just a general jumping-off point for those who are new to solar.
A great next step is to explore our Learning Centre a little more comprehensively. Have a glance and check it out. You’ll find articles like the ones linked throughout this page. Here’s one last one before signing off: How to Shop for a Solar System.
Or if you’d prefer, you can reach out to one of our consultants for a chat.
If you have any burning questions that need an immediate answer, feel free to reach out. We love a good chat in the spirit of education.
Blue Skies,
PSC Energy
FAQ: New to Solar
What is a solar energy system for a home?
A home solar energy system converts sunlight into electricity using panels, an inverter, and optional battery storage.
How does solar power reduce my electricity bills in NSW?
Solar power lowers bills by supplying your home with free electricity during the day, reducing the amount you buy from the grid.
What is the Small-scale Renewable Energy Scheme (SRES) in NSW?
The SRES is a federal program that lowers the upfront cost of installing solar by providing tradable certificates based on system size.
How do feed-in tariffs work in NSW?
A feed-in tariff is the rate your retailer pays for unused solar power sent to the grid. Rates vary between about 4 and 15 cents per kWh.
What size solar system do I need for my home?
The right size depends on your daily electricity use, roof space, and budget. Many NSW homes install 6.6 kW to 10 kW systems.
What is the difference between kilowatts and kilowatt-hours?
Kilowatts (kW) measure system power capacity, while kilowatt-hours (kWh) measure the amount of energy produced or used over time.
Do I need a battery with my solar system?
Batteries store unused solar power for later use, such as at night or during blackouts, but they are optional for most homes.
What types of inverters are used in NSW solar systems?
NSW homes use string inverters, microinverters, or hybrid inverters to convert solar DC power into AC electricity for home use.
How long does it take to install a solar system in NSW?
Most installations take one to two days, depending on system size and weather conditions.
How long do solar panels last in NSW?
Most quality solar panels last 25 years or more, with gradual efficiency loss over time.
What happens to my solar power during a blackout?
Most systems shut down for safety during blackouts unless you have a battery with backup capability.
How do I know if my roof is suitable for solar?
A suitable roof has enough space, minimal shading, and good sun exposure, ideally facing north in NSW.
What maintenance do solar panels need?
Solar panels require minimal maintenance, usually occasional cleaning and periodic inspections to ensure proper performance.
How much does a solar system cost in NSW?
Costs vary by size and components. A typical NSW residential system can range from several thousand to over ten thousand dollars.
What is a feed-in meter?
A feed-in meter records the electricity you export to the grid, allowing your retailer to credit you for surplus solar power.
Can solar power run my whole home?
Solar can power your home during the day, but you will need grid electricity or battery storage for nighttime use.
How much money can I save with solar in NSW?
Savings depend on your energy use, system size, and feed-in tariff. Many NSW households save thousands of dollars each year.
What approvals are needed for solar in NSW?
Your installer will apply for grid connection approval from your local electricity network before installation.
How do I track my solar system’s performance?
You can monitor performance through a solar app or web portal connected to your inverter.
