How Much Solar Power Do I Need?

My advice on solar power system sizing has changed over the years due to the cost of solar panels continuing to reduce over time.

This video explains the system size providing the best bang for buck for the typical Australian household:

Spoiler alert – if you don’t feel like watching, my advice on system sizing is: “if you have reasonable electricity consumption and a decent feed-in tariff, install as many solar panels as you can fit and afford.”

This article digs a bit deeper into why my advice is to ‘fill your roof’ rather than a specific size and shows how to use my nifty solar calculator to see what a solar system can do to your bills.

But first – some basics.

The size of a solar power system is described by total panel capacity, expressed in kiloWatts (kW).

A Watt is a basic measure of electrical power, and the kilo means there are 1000 of them. i.e. 1 kW = 1000 Watts

For example – a system made up of 18 x 370W solar panels = a 6.6 kW system.

When buying a solar power system, it’s common for installers to quote on ‘oversized’ systems.

The linked article goes into more detail, but in short – you get huge bang for buck by putting on 33% more panels than an inverter is rated for.

This is why 6.6kW solar systems, using 5 kW inverters, are king in 2021 – they represent a sizing ‘sweet spot’ for what the typical home can fit on the roof. They’re also usually the maximum size a Distributed Network Service Provider (DNSP) will allow on a single-phase home (more on DNSPs below).

Note when you have an ‘oversized’ system, you will never produce more power than what the inverter is rated for. For example, a 6.6 kW solar system using a 5 kW inverter will never produce more than 5 kW at any given point in time.

People assume this would result in ‘lost’ energy generation due to ‘clipping’ of production at 5 kW, but averaged over a year you lose little – so don’t stress.

A word of caution: Be sure to understand what an installer is quoting you on. Make sure it is the solar PV peak Watts and NOT the inverter size they are quoting. In the past, I’ve seen advertising selling a “10 kW system” consisting of a 10 kW inverter with only 8 kW of solar panels!

To give you a feel for the amount of power a kiloWatt represents, the table below shows what you can run with 1 kW of power:

what does 1kw of electricity power?

Wow, so could you power 60 globes with a 1 kW solar power system? Kind of.

A 1 kW solar panel system will only produce 1 kW of power for a few hours a day, and then only if it is a clear, sunny day. So your 60 globes will only be all on for a few hours a day.

The graph below shows what the electricity output of a 1 kW solar power system might look like over a summer’s day. You can see 1 kW is only generated at midday when the sun is at its strongest:

typical power profile for a solar panel in one day

This is the reason most solar systems are connected to the mains electricity grid. The grid will absorb any electricity generated by the solar panels not used by your home. When you are using more electricity than can be produced by the sun (and at night, of course), the grid automatically tops up your electricity needs.

How many solar panels will you need to offset your electricity usage?

First – I want to address most people’s motivation for going solar: “I want to put on solar panels and get my electricity bill to zero!”

Getting a zero dollar bill isn’t as simple as installing enough solar panels to generate whatever your average daily usage is. As I explained previously, when you use electricity is almost as important as the amount of electricity you use. This is because a solar system only generates its maximum at midday on a ‘good’ day.

Solar power, regardless of system size, won’t do much to a massive electricity bill if it’s all caused by overnight air-conditioner usage!

Getting zero bills with only solar panels – and no battery storage – is possible. Until I added an electric car to my home, I regularly got credits on my electricity bills.

Yup – my retailer was paying me for the privilege of being connected to the electricity network!

But – for those of you with sky-high energy costs and not enough room for a huge solar power system, it’s important to focus on the amount solar energy can reduce your bills by, not whether or not it can simply get your bills to $0.

Or, to put it another way – if solar power could take your $500 quarterly bill down to $50, would you be annoyed you didn’t get your fabled ‘$0 bill’, or would you be jumping for joy your solar system saved you $450 in 3 months?

Now – let’s get into some hard numbers on system sizes with the help of my nifty solar calculator.

Example for a typical home in Sydney

Let’s take a home in Sydney with $500 quarterly electricity bills, paying $0.29 per kWh for grid electricity and gets paid a $0.12 per kWh feed-in tariff. They paid $5,500 for a north-facing 6.6 kW solar system and have 25% solar electricity self-consumption.

Putting these assumptions into my calculator yields the following result:

6.6kW system payback

$1,585 in electricity bill savings in the first year! Not too shabby.

Or, to look at it from the perspective of “What will my electricity bills be before/after solar?”:

Electricity bills before/after solar

A $9 spring electricity bill! Most homeowners would be thrilled.

So – a 6.6 kW system in Sydney, assuming 25% solar energy self-consumption, won’t quite get a $500 quarterly bill to $0 – but it gets close!

If this home could fit more than 6.6kW on their roof – closer to 10kW total – with the same consumption patterns they’d be in credit year-round.

What roadblocks are there to filling your roof with solar panels?

Besides the obvious (physical roof size/space and your budget), the other obstacle preventing you from maxing out your roof with panels are limitations set by your “Distributed Network Service Provider”, or DNSP.

You can see all of the DNSP rules for each state here.

But, to use an example, here in South Australia, SA Power Networks (SAPN) is our only DNSP.

They have set system size limits of:

  • Single-phase homes: 10 kW inverter limit, 5 kW export limit.
  • Three-phase homes: 30 kW inverter limit, 15 kW export limit.

Meaning – if you have a single-phase home in SA, you could have up to 13.3 kW of solar panels on your roof with a 10 kW inverter. Remember – you can oversize an inverter by 33%. But – you’d be export limited to 5 kW

Export limitations mean your inverter will intelligently ramp down solar power production to ensure a maximum of 5 kW is sent to the grid at any one time.

Some homeowners ask me “If my energy needs are low-to-moderate, isn’t it pointless to install a large system if I’m export limited?”

The answer, surprisingly, is no. You lose less generation than you’d expect with export limitation due to a variety of factors.

Why bigger is better, even if you believe you won’t need a larger system

Even with feed-in tariffs dropping and export limitations for single phase homes in certain states, maxing out your roof with solar panels is a smart move for two reasons:

  1. Winter and summer are typically the highest energy usage seasons for households. But in summer, solar power systems pump out a ton of energy, so they can help offset big electricity bills easily. In winter, your solar energy generation can be less than half of what it is in summer, so big winter bills are harder to offset unless you have a larger solar system (10 kW or more).
  2. Future-proofing. I believe by 2030 many homes will have battery storage and electric cars.

Batteries and electric cars need lots of solar generation to reliably charge, and then you need more solar electricity to offset the energy needs of the rest of your home.

I’m about to install more solar panels on my south-facing roof (which some installers refuse to install on!) because my home now has two electric cars and a Tesla Powerwall battery. My existing 6 kW system struggles to generate enough energy for them all.

I’ll finish by saying – while I regularly hear from homeowners who wish they put on more solar panels when they had the chance (because it’s expensive and a technical headache to add panels to an existing system), I have never heard anyone complain they’ve installed too much solar power.

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