Solar panels buying guide

In this buying guide:

• Solar panels and PV systems explained
• Which solar panel installer should I choose?
• Does the solar PV system meet standards?
• How many solar panels do I need?
• Will my solar panels be covered under warranty?
• How much do solar panels cost?
• Storing solar energy in a battery
• Solar installation incentives
• Solar panel buying checklist
• Questions to ask a solar panel installer and energy retailer
• Information for your state

Solar panels explained

How do solar panels (PV, or photovoltaic) work?

Some materials can be made to produce electricity when light falls on them; this is called the photovoltaic effect. Solar panels use this to convert energy from sunlight into direct current (DC) electrical energy. An inverter unit then changes this into alternating current (AC) for your home's electrical circuits. Any excess energy can be fed back to the electricity grid, for which you may be paid an agreed feed-in tariff, or it could be fed into a battery storage system so you can use the stored power later (at night, for instance).

Solar panels work best when they're north facing, pointed directly at the sun, at an optimal angle and not blocked by trees or shading. The effectiveness of solar panels also depends on where you live and the weather.

Cells, modules, panels and arrays

Most solar cells are made of silicon. Solar panels, also called modules, are each made of several solar cells, connected together and sandwiched between protective glass and a backing plate, the whole panel usually surrounded with an aluminium frame. All the tested panels have 60 cells except the Sunpower which has 96. The solar panels we're testing weigh around 18 to 19kg each. A typical installation includes several panels connected together in an array.

Types of solar panel

• Monocrystalline panels are typically black in colour and have a reputation for higher efficiency than multi-crystalline (or polycrystalline) models, which are typically dark blue and are sometimes said to have better temperature tolerance (see efficiency below). The differences come from the manufacturing processes of the silicon cells in each case. In practice there's not necessarily a clear advantage either way; as with most high-tech products, solar panels are a complex assembly of many components and the overall performance depends on more than simply the type of cell.
• Interdigitated back contact solar cells (IBC), or rear contact solar cells, are a variant of standard solar cells. They can achieve higher efficiency by having all the electrical contacts on the rear of the cell (rather than at the front), so there are no metal contact strips preventing light getting to the cell surface. The Sunpower panel in our test uses IBC cells.
• Thin film solar cells are made from a thin layer of photovoltaic material (such as amorphous silicon, cadmium telluride or copper-indium-gallium-selenide) on a base plate of glass, metal or other substance. This technology is evolving and while it promises more flexible applications than standard solar panels, it's so far generally less efficient and is rare in rooftop arrays. It's used in various large and small applications, from building-integrated PV systems to solar-powered calculators and garden lamps.
• Bifacial panels have (as you'd expect) solar cells on both sides, front and back. When mounted in the same way as a regular solar panel, the front faces the sky as usual, and the back picks up scattered and reflected sunlight from the roof. They can also be mounted vertically, for instance facing east-west, to maximise solar power generation all through the day (one side catching the morning sun in the east, while the other side catches the afternoon sun in the west); this may be particularly useful in mass arrays on a commercial solar farm. Depending on how they are mounted and how much reflected sunlight is available, they can deliver anything from 5% to over 20% more power than a single-faced panel of the same power rating. Bifacial modules are fairly new and not widely used yet, but it's likely they will become more common over the next few years. They aren't necessarily much more expensive than single-faced panels. Their power output is very dependent on how they are mounted (more so than for regular panels) and industry is still working on an agreed standard method to rate their overall power output. We've included one in our current review for experimental purposes, but aren't including it in the published results yet until we have more clarity around how to rate the results. The early results are positive.

Efficiency

This is simply a measure of the panel's electricity output (in watts) compared to its surface area. Generally, the higher the efficiency, the more power you can get from a given roof area, and you might have lower installation costs too. However, if you have plenty of roof space, you might find it more economical to buy cheaper panels with lower efficiency and just use more of them.

This may come as a surprise, but although solar panels are meant to sit on roofs in direct sunlight, they actually become less efficient as they get warmer, due to the physics of the photovoltaic effect. So you'll sometimes get less power from the panels on a very hot day than on a mild day (and remember, even on a 25°C day, your rooftop panels could be operating at well above 40°C). Solar panel power ratings are based on standard conditions (25°C panel temperature). Some panels have better temperature tolerance than others (look for a lower 'temperature coefficient') and are therefore a better choice in hot climates. Correct installation is also important; that's why panels should be installed in a way that allows air to circulate underneath the panels to help keep them cooler.

Which solar panel installer should I choose?

The Clean Energy Council (CEC), Australia's peak body representing the clean energy sector, accredits both installers and systems that meet certain standards. To be eligible for any small-scale technology certificates, systems must be installed by a CEC-accredited installer.

Retailers can also sign up to the CEC's voluntary code of conduct, which demonstrates a commitment to best-practice installation.

So your best bet is to look for an accredited company that is a signatory to the code of conduct, has been in business for a while and has an established track record, relevant experience, specialist expertise, and a good reputation.

For more, see our guide to finding a good solar installer.

Does the solar panel system meet standards?

You should ensure that any solar PV system you consider has met Australian and international standards. To be eligible for small-scale technology certificates, your solar panels must be certified – ask your installer to supply proof. You can check the CEC's list of currently approved inverters and modules to confirm.

Also, the Clean Energy Regulator has partnered with the solar industry and peak bodies to introduce the Solar Panel Validation Initiative. This scheme allows businesses in the Small-scale Renewable Energy Scheme supply chain to check if solar panels are genuine before they are installed. Participating installers and suppliers will be able to use the scheme to provide you with a verified report confirming that the panels they've installed on your roof are genuine and that you're getting what you've paid for.

Video: CHOICE tests solar panels with help from the CSIRO

How many solar panels do I need?

Nowadays you don't make much money from feeding electricity back into the grid. So you want to maximise your own use of your solar PV and minimise your export into the grid.

See our separate guide to sizing a solar PV system to suit your home and your needs. It explains how to figure out your home's electricity usage, and the key things to consider: roof space and orientation, grid-connection vs off-grid, inverters and batteries.

It might seem logical to choose panels with higher rated output, but there's more to putting an array together than the panel's power rating alone. The amount of space available on your roof, especially on the prime north-facing section, is also important. The panels in our solar panel reviews are each about 1.6 square metres in area, but the higher their nominal power rating (and actual power output, of course), the fewer panels you need to make up a system of a given power output (or conversely, the more powerful the array you can install). 

For example, to make the theoretical 1000W array mentioned above, you could use four 250W Jinko panels, taking up 6.5m² of roof space, but four 327W Sunpower panels would take up the same overall area and form a 1308W array. So, more power for the area used, though the Sunpower panels are also more expensive. Fewer panels can also mean a quicker installation. It's important to compare prices for whole systems, not just the panels.

And as you'll see in the review, while the panels are of similar area, they do vary a bit in length and width, so if your roof space is limited, some of the panels might be a better fit than others.

Will my solar panels be covered under warranty?

There are two warranties provided for solar panels: one for the product, another for its performance.

Product warranty

This is the warranty for the panel itself; it's the typical type of warranty that offers repair or replacement if there are any manufacturing faults. Most solar panel product warranties are for 10 years; some manufacturers offer 12, 15 or even 25 year product warranties.

It's important to know the difference between the product and performance warranties; you'll see a 25-year performance warranty promoted more loudly than a 10-year product warranty, but the product warranty is the one that you're more likely to call on if there's any problem.

Performance warranty

The performance warranty is a guarantee that that as long as the panel is functioning and undamaged, it will still produce at least 80% of its claimed power rating after 25 years. The warranty usually also promises that the panel will degrade in an orderly, linear fashion; that is, it will only lose a small and predictable amount of power output each year.

Most solar panels have 25-year performance warranties, and most solar PV systems should last at least that long. 

Note that it can be hard to tell whether your panels are truly performing as they should, especially after several years. If you believe your panels aren't performing as expected, the performance warranty may put the onus and cost on you to have the panels tested in order to make a warranty claim.

It's also a question as to whether a manufacturer will still be around in 20 + years to honour a warranty claim. Nevertheless, the 25-year warranties do give some assurance that manufacturers are confident in the long-term performance of these products.

Other warranties

As well as the warranties for the solar panels, you should also get a warranty from the installer for their workmanship in installing the system; the mounting racks, wiring and connections. This will typically be one or two years - which should be enough to detect any major problems - but as always, a longer warranty is better.

The inverter will also have its own warranty, typically five years but they can be up to 10 years or more.

How much do solar panels cost?

The cost of a solar PV system will depend on many variables including the system size and the quality of components used. According to the Alternative Energy Association (ATA), the overall average cost of a fully installed 2.0kW system, before rebates and discounts, in 2013 was roughly $4400. But larger systems will cost more – in our 2014 solar survey, we found on average our members paid $8243 after all rebates and discounts. This price difference could probably be accounted for by system size – 90% of those surveyed had systems over 2.0kW, with 49% installing systems of over 4.1kW.

Storing solar energy in a battery

You may want to consider a system that includes battery storage; the Tesla Powerwall is the best-known model but there are others also in the market. A home storage battery lets you store the electricity generated in daytime by the solar panels for later use at night. See our latest article on home battery storage and payback times.

Solar incentives

There are two main incentives that can help pay off solar PV systems: small-scale technology certificates (STCs) and feed-in tariffs (FiTs).

Small-scale technology certificates (STCs)

Under the federal government's Solar Credits Scheme, eligible households receive money for STCs created by their PV systems. STCs were formerly known as renewable energy certificates or RECs. Currently, the scheme allows you to cash in the certificates you could earn over the next 15 years straight away.

While the government has set a price of $40 per STC sold through the STC Clearing House, the price you get will vary depending on how you choose to sell your STCs.

The easiest and most common option is to allow someone else – usually the installer – to sell them on your behalf. This may then be applied as a discount to your installation costs. The benefit is that the process is easy, with all the paperwork taken care of for you. The downside is you're likely to get less money per STC – you can expect about $30 per STC.

The second option is to sell the STCs yourself, which involves considerable paperwork, applications and fees. Depending on the number of buyers and the time it takes to complete the process, it may be months after installation before you receive your funds. There's no way to tell exactly how long you could be waiting, which means unless you have the capital you might find yourself out of pocket. However, you should get a better price. On average, CHOICE members who sold their STCs themselves got a price of $33 per STC, with the highest price per STC being $37.25.

A typical 2.0kW system installed in 2015 in Sydney will generate 41 STCs over 15 years. Assuming a sale price of $30 per STC, that's a $1230 saving off the cost of the system. To calculate how many STCs a system will generate, you can use the government's calculator.

Feed-in tariffs (FiTs)

A feed-in tariff (FiT) is the rate you're paid for electricity that grid-connected panels contribute to the local network. There are two types of FiTs: net and gross.

Almost all FiTs around Australia are now net FiTs. This means a household is only paid for surplus electricity fed into the grid after domestic use is subtracted. If your system produced 3000kWh, for example, and you used 2500kWh of electricity in your home during the day (the time when your PV system was generating power), the rate is only paid for the 500kWh difference.

Gross feed-in tariffs, where households are paid for all the electricity their panels produce, irrespective of their own domestic electricity consumption, are no longer available for new applicants in any state or territory.

FiT rates around the country have plummeted over the past few years. Coming off a high of up to 60c per kWh in some parts of the country several years ago, FiTs are currently sitting at close to 8c, depending on where you're located and which energy retailer you choose. 

Note: in some states and territories, newly installed solar PV systems no longer qualify for a guaranteed FiT; however, many energy companies offer a voluntary FiT instead. Check with your energy company or the appropriate regulatory authority in your state.

Video: CHOICE visits the CSIRO's solar ground station where our tests are carried out

Use your mouse to explore a 360 degree view of this video or watch it through your virtual reality headset.

Solar panel buying guide checklist

• Improve the energy efficiency in your home to save up to 30% on your bills. You can do this by turning off appliances, using the dishwasher and washing machine only when full and purchasing energy-efficient appliances.
• Assess what energy you currently use and the system capacity you need (and can afford).
• Check if your roof faces the right direction. Only north-facing panels will produce their full capacity.
• Ensure there are no trees, power lines or other structures shading your roof.
• Find out what local council approval is needed. Increasingly, local councils have staff on hand to assist with making the best decisions on solar.
• Try to figure out your system's payback time.
• Are you planning to install a storage battery, so you can store the solar-generated electricity for night-time use? Check the latest calculations on home battery storage and payback times..
• Get multiple quotes from installers to ensure you're getting a good deal.
• If you can't afford the upfront costs, consider solar leasing and power purchasing agreements.
• Make sure the installer is accredited by the CEC and that the panel meets the required standards.
• Check out the CEC guide to installing solar in your home.

Questions to ask a potential installer and energy retailer

• What is the FiT you'll be paid and how often will you get it? How will you receive it: as a discount off your energy bill or as a standalone cash payment?
• Will you need to change to a new meter and what will it cost?
• What is the cost of the electricity you purchase from your retailer (in cents per kWh), and will you lose your off-peak rates if you install solar?
• Will you be charged a higher daily fixed charge if you connect your solar PV system?
• Do you have to pay any additional fees?

State-by-state information

For more information on feed-in tariffs state by state, contact the following government bodies:

• ACT: Department of Environment and Planning Directorate 13 22 81
• NSW: Service NSW  137788
• NT: Department of the Chief Minister (08) 8999 5511
• Qld Department of Energy and Water Supply  13 43 87
• SA: Sustainability and Climate Change Division (08) 8204 2999
• Tas: Office of the Economic Regulator (03) 6166 4422
• Vic: Department of Environment, Land, Water & Planning 136 186
• WA: Public Utilities Office (08) 6551 1000