The Facts on Solar Power Systems
How do they work?
A solar power system mounted on your roof transforms radiation from the sun into direct current electricity. This electricity is transmitted to an inverter which converts the direct current (DC) electricity into alternating current (AC). Where the household qualifies for the NSW Solar Bonus Scheme, all electricity produced by the system is exported to the electricity grid so that households can take advantage of the gross feed-in tariff (introduced in January 2010).
The amount of energy available from your system is chiefly determined by:
- The size and type of system installed;
- the orientation of the panels on your roof; and
- geographical location and seasonal climate variations.
NB: Solar power systems are not the same as solar hot water systems. Solar power systems generate electricity to power - for example, appliances and lighting in your home. Solar hot water systems use the sun's energy to heat water. Visit our solar hot water or heat pump pages if you are interested in hot water systems.
What different types of panels are there?
There are a number of solar panel types. Two of the more popular types are crystalline silicon and amorphous silicon. Crystalline silicon cells are made from slices of single crystal ingot (monocrystalline) or multiple small crystals (polycrystalline). Amorphous silicon cells are made up of a thin film applied to glass or plastic. For further information on solar power system types, visit the Australian PV Association and the Australian Government's Desert Knowledge Australia Solar Centre.
The most appropriate system for your home will depend on the roof of your dwelling and how much money you are prepared to spend. Our preferred suppliers will be happy to talk to you about your needs and help you choose a suitable system to ensure optimum performance, taking into account the pitch or slope of your roof, the direction it faces and shading from surrounding buildings/trees.
Do I need to lodge a Development Application?
Residents are not required to lodge a Development Application (DA) for solar power systems if the system meets the following conditions:
- It is integrated into the building or is flush or parallel with the surface of the roof;
- It does not reduce the structural integrity of, or involve structural alterations to the building;
- Installation does not necessitate the removal of trees; and
- It is not located on a building that is a heritage item or is in a heritage conservation area.
For installations not complying with these conditions, a DA is required. Refer to your local council for advice.
Financial Incentives
There are several financial incentives that have been introduced to make going solar more affordable.
RECs
What are Renewable Energy Certificates?
Renewable Energy Certificates (RECs) are an electronic form of currency. You receive one REC for every one megawatt hour (MWh) of electricity generated by your solar power system.
Small-scale and Large-scale Technology Certificates
RECs have been reclassified as Large-scale Technology Certificates (LTCs) and Small-scale Technology Certificates (STCs). New solar and heat pump hot water heaters may be eligible to create STCs. RECs is still an umbrella term that covers STCs and LTCs.
What are RECs worth?
The value of a REC is not a fixed price. RECs are a tradeable commodity, so the value of a REC is determined by the demand and supply for RECs and may vary from buyer to buyer and from day to day.
What can I do with my RECs?
There are two main choices for residents in relation to RECs:
- You can surrender your RECs to a registered agent (usually via the retailer of the product) in return for a discount or a cash payment at the time you buy your new system.
- You can hold onto your RECs and sell them at a future time or retire them so your solar system fully contributes to directly reducing greenhouse gas emissions rather than allowing another polluter to offset their emissions.
How do RECs relate to the Renewable Energy Target (RET) scheme?
The Renewable Energy Target (RET) scheme sets targets for the production of additional electricity generated from renewable energy sources. Australia currently has a set target of sourcing 20% of energy from renewable resources by 2020.
Electricity retailers and other purchasers of wholesale electricity (called liable parties) are required to contribute towards these increasing annual targets.
The liable parties show their compliance with the requirements of the RET scheme by obtaining RECs, where each REC is equal to one MWh of electricity generated from a renewable energy source.
The Office of the Renewable Energy Regulator has more information.
Solar Credits
The Solar Credits Scheme applies to all solar systems purchased from 9 June 2009. This scheme is not means tested and is available for properties that are not primary residences.
Solar Credits are part of the Renewable Energy Target (RET) scheme, which aims to ensure that 20% of Australia's electricity is generated from renewable sources by 2020.
As an added incentive, if you purchase a solar power system before June 2012, you will receive three to four times the number of RECs for the first 1.5kilowatts of capacity installed. If you are installing an off-grid small generation unit (SGU), your system may be elgigible for additional Solar Credits. The Australian Government's Department of Climate Change and Energy Efficiency has more information.
NSW Solar Bonus Scheme
The NSW Solar Bonus Scheme is closed to new applications. Customers wishing to connect a renewable energey generator to the grid without joining the scheme are able to do so. The NSW Department of Trade and Investment has further information.
Fact Sheet