A short guide to getting solar for your home

Before you can install solar panels, you’ll need to work out if your roof is suitable. It's also worth checking with your local council about any approvals you may need, and asking your electricity provider about connecting your solar panel system to the local electricity network (also called the grid). 

Solar power systems can be connected to the grid, or they can operate off-the-grid, which means they are separate from the electricity network. If you connect a solar energy system to the grid, it may be possible to be paid for the electricity you put back into the grid, also called a feed-in tariff.

You should check whether your current electricity provider charges any extra fees if you switch to solar. Another electricity company might charge lower or no fees, and offer cheaper rates or a higher feed-in tariff, meaning switching providers could potentially help you to save money.

The next important step is selecting which solar panels to buy and install. It helps to compare quotes from various solar retailers and read product reviews online to get a good deal.

That said, be careful to only work with a solar retailer approved by the Clean Energy Council. Accreditation with the Clean Energy Council under the New Energy Tech Consumer Code means you can be confident that a solar retailer or installer has the necessary training to design and install solar systems while meeting all safety standards.

The amount you’ll pay to get a solar system installed may depend on the size of the system you choose, measured in kilowatts (kW).

Here's what a "good quality Tier 1" solar system in Australia costs as of July 2023 according to SolarQuotes:

A 5kW solar system is generally considered sufficient to meet the average daily requirement of a small household. But a larger system may be able to help cover any additional energy requirements in future, and even earn you some money via feed-in tariffs. Some of the bigger systems include batteries as well, enabling you to continue using solar even when the sun is behind the clouds.

When working out which solar system size may be the most suitable for your home, it's good to consider both your present and future energy needs. For example, you may be planning to get an electric vehicle that will increase your energy consumption, so you’ll need to make sure the system will stay useful over the long term.

It's also worth checking with the Australian Government's Clean Energy Regulator about the Small-scale Renewable Energy Scheme that offers financial incentives for individuals and small businesses to install eligible small-scale renewable energy systems.

Exactly how much money you could potentially save by adding a solar power system to your home could vary greatly, depending on the electricity tariffs in your area, your home’s energy usage, the sunlight hours in your area, the size of the solar power system, and other factors.

For example, according to Solar Victoria, installing rooftop solar panels saves the average Victorian household $1073 on their annual energy bills. And according to Solaray, in New South Wales a solar system could save you around $400 per year per kW of solar. For example, an 8kW solar system could save up to around $3,400 a year from solar energy, or $850 for every quarterly bill.

Entering the details of your solar power system, home address and average electricity usage into a solar power savings calculator, such as this one from Solar Quotes, could help you estimate how much you may be able to save on your power bill. From this, you can get a better idea of how long it may take for your new solar power system to effectively pay for itself through energy savings.

If you don't have enough savings to pay for a solar power system upfront, you could consider applying for a green personal loan, which is a special type of loan that typically offers lower interest rates and fees than other personal loans, provided you’re borrowing money for a purpose the lender considers to be environmentally friendly. Be sure to check the terms, conditions, and other requirements for a green loan before you consider applying for one.

You could use a standard personal loan to finance a solar system for your home, though you may need an excellent credit score to get the lowest interest rates. A personal loan could prove a useful alternative finance option if your preferred size or capacity solar system doesn’t meet the requirements for a green loan. 

To avoid high interest rates, you could also consider using the equity in your home for borrowing money. Equity refers to the difference between your property's value and the amount outstanding on your mortgage. You can use this equity in your property as security to borrow money for installing a solar system, or for any other purpose you want. You could also use your home equity by refinancing your home loan and increasing your loan size. 

Apart from these options offered by banks and other credit providers, some solar suppliers offer interest-free solar payment plans to help you manage the cost of your solar power system. However, it's advisable to understand all the costs, terms and conditions that may be involved, in case you aren’t able to keep up with the payments.