How Home Solar Systems Work

If you’re looking to reduce your household carbon emissions, you really can’t go past installing a home solar photovoltaic system with battery storage. But with so many dealers and installers out there, and with such a high investment cost, where do you even start?

In Part 1 of this Home Energy feature Bernie Kelly from bidmysolar shares how home solar photovoltaic systems work, their cost and their advantages and disadvantages.

Stay tuned for Part 2 where Bernie will share how home battery storage systems work, their cost, how long they last, and traps you should be aware of before you make the investment.

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Could you share your background and how and why you got into the home solar and battery space.

My background is financial services and I had my own funds management business, operating internationally for about 25 years. I sold that business and came back to Australia and bought a small farm. My wife got bored and frustrated with me doing that, and then launch one of the earliest financial technologies, the FinTech businesses in Australia, back in 2011. I also designed the number of financial products that are in use around Australia today. Then I did a capital raise on the financial technology business. And through that capital raise, I then sold my interest. And I was required to go on gardening leave for a period of five years. So in other words, I wasn’t allowed to go back into that particular space for that for an extended period of time.

And I thought, well, maybe it’s a good time for me to do a home renovation. So I embarked on a renovation. I’d always been interested in renewable energy. So I thought I would put a solar system on my roof. And that was a horrible experience. The first system completely failed within six months,  I thought that I was capable of doing a lot of due diligence and research on the solid company. But it turned out that the solid company was financially not sound. And they ultimately went into liquidation and the installer, that did the installation was a one man operation and there was no assets behind him. So I was about $16,800 out of pocket from that experience.

And then the more I investigated, the frustrations that I had, I realised that I wasn’t alone. And in fact, more and more people had experienced either pretty much the same thing, or they were having very, very difficult times installing solar. So I thought to myself, it’s about time I investigated solar. So what I did is I employed people and I surreptitiously inserted those people into solar companies all around Australia to do some inside investigation as to how solar operates, and then from that create an alternative way for people to purchase solar.

What we were able to ascertain was that the solar companies in Australia were employing sales people to go into homes and essentially sell a singular product solar system, not a selection of products.  I identified that that that was a problem.

If you do a direct comparison, solar to financial services, with financial services, you generally have a highly trained advisor accredited, and they can advise you on a whole raft of quite complex financial transactions, whereas in solar, you have fundamentally a complex transaction taking place, however, the advice that’s being given is limited advice by people that have very much rudimentary knowledge of the subject.

We decided to embark upon building a technology, so BidMySolar is a technology, and we’ve created a design suite, which for the very first time, allows a homeowner or a business, to design a system that has some real science behind the design. Through that design, it allows us to help a client pretty much look at every conceivable solar brand, and pairing available globally. So every single solar product that’s available in Australia, and all their data points, and all their technology, all that information is embedded in our technology. So we’re able now to design a system for a client, we’re then able to upload that design for that client onto our technology platform, where we have around 250, Clean Energy Council of Australia accredited retailers that we have approved to sit on our platform, and then lodge blind bids to win that client’s business.

Now, the reason that’s so important in our in our business model, is that the difficulty for a consumer is that there’s something like 9000 installers and accredited solar companies in Australia. Now, with a million solar systems having filed since 2011, it’s a pretty clear indication that there’s a problem in the marketplace. And the problem is that you just don’t know who it is that you’re ultimately dealing with. So we put our vendors through a really rigorous selection process, we employ and have a law firm on a full time retainer. Their job is to vet the solar company. So that entails a lot of things right down to their financial position. The background checking includes looking at what their capabilities are and their experiences in installing solar systems.

Through our bidding process, a client can now compare apples for apples when it comes to solar systems. They can look at the quality of that installer, they can look at the workmanship warranties, they can look at financing alternatives, and for the first time understand how finance with solar works. Very few people fully understand that, and then be able to select a bid that works best for them. It’s a competitive marketplace that we’ve created. But more importantly, clients have absolute confidence that the solar installation will be the best that it can be. And then finally, when your solar systems installed, it’s incumbent upon the solid companies that we’ve approved to sit on our platform to upload a series of quite detailed photographs of that installation as it’s been undertaken. And then we have our own internal Clean Energy Council accredited electrical engineers vet those installation photographs, so that the client can be absolutely confident that the installation is in fact compliant, and the best that it can be. If it’s not, our terms and conditions require that company to return within 72 hours and fix it.

So that was my journey into the creation of bidmysolar.

For consumers looking to get their solar installed, what are some of the traps or reasons that solar systems fail? What is the root cause of those issues?

Look, first and foremost, greater than 50% of failures are a result of poor installation. So corners being cut. You have to remember that solar is the sum of all components, and people tend to focus on the price during their decision-making process. The unseen components – the wiring, the quality of the wiring, the AC switchgear, the isolators are what can cause problems.

People need to be vigilant of deals that sound just too good to be true. We hear this time and time again, if it sounds too good to be true, it usually is, it should come as no surprise that the vast majority of system failures are in what we call cheap solar.

Cheap solar doesn’t necessarily refer to price. But cheap solar could be produced in a boiler pipe plate factory, by a company that doesn’t have a proper representation in Australia, with no backup support for a client if they have a problem.

We also say that online reviews are not a good process of due diligence because it’s rare that you actually find a review that that’s not glowing about a solid company. There are some out there but not a lot. People can influence online reviews, companies can delete negative posts or leave bad reviews for their competition. And that’s one of the challenges that we face. We’re currently managing parts of the solar industry that are hell bent on trying to curtail our growth. And we’ve had to take legal action against half a dozen solid companies that have posted bogus reviews. And thankfully, in Australia, the laws allow Google to provide the details of the URL and in every single case, that happened to be a solar company. We are a very serious disruption to the to the solar industry, we knew we would ruffle a few feathers in the industry.  

Clean Energy Regulator data shows that at the end of 2020 1 in 4 Australian homes had solar panels on their roof. Why do you think so many homes are making the decision to install solar?

Solar is absolutely hands down the cheapest form of power that that you can generate, and it works long term and delivers what is supposed to deliver. So Australians are looking to install solar, not to impress their friends, but to reduce the cost of power into their home budget. That’s going to continue even though there’ll be changes in relation to feed in tariffs (in Australia). People are getting exceptional savings when it comes to solar. People are also interested in adding good to the environment, they see solar as a way for them to make a difference to the environment.

But there is also a debate around just how green is solar. There are some challenges in solar as far as the manufacturing. And the failure of solar panels and components is creating an enormous problem for the environment from a recycling perspective. So there are challenges at both end of the scale.

In fact, Australia is one of the leaders globally as to creating a marketplace for recycling solar. So only about four years ago, only about 10% of a solar panel was able to be recycled, that has grown and is now approaching 20%. Manufacturers are starting to get the message that they need to be designing and creating components that can be recycled.

How does a home solar panel system typically work?

As soon as the sun is out, it’s creating energy through UV rays. It’s hitting the panels, the solar panels  are creating a current, the current that they create is called a dual current DC. The current travels down the wire to the inverter, and the inverter is a really neat piece of equipment that converts that power generated at the panel level, to an alternating current AC.

Then it’s usable in your home. Solar is actually a reasonably straightforward process.

Feeding power back to the grid and the tariffs differs from state to state in Australia, and will be different in other countries. But the process is based on your location and who your power provider is. You have certain levels that you can export to the grid, or sell back to the grid up based on certain limitations. Now, based on those limitations, the power company will pay you a rate. And that is a rate per kilowatt for the power that you’re exporting or selling back to the grid. And that appears as a credit on your power bill.

What are the benefits of installing solar panels on your home? Are there any disadvantages? Or is it really just for sustainability and environmental reasons that we continue to install solar?

That’s a really relevant question right now. So for a period of time, the Australian Energy Market Commission has been looking at this and saying, Well, okay, there at certain periods of time, there is pretty much congestion on the grid, massive amounts of solar being exported back into the grid, at certain times of the day. The upshot of this is that there will be changes to the amount that you can sell back to the grid.

We’ve done some number crunching at our end, we’ve also been looking very closely at what the Commission has said. The upshot is that it’s not a train crash. And the Energy Commission has got access too far, far more data than us. But they’re saying that the upshot will be that you’ll be about 90% of what your current feed in tariff will be.

So in other words, it’s not being removed all together. And it’s not going to be a situation whereby every kilowatt that is that goes back to the grid you’re being charged for. There’ll be new types of power arrangements that consumers can enter into with their provider.

When it comes to disadvantages, what I often see is that it often appears to be out of the price range for a consumer. And I hold some really strong views about financing solar, people tend to move away from solar, because they see solar as an expense, when really, it shouldn’t be seen that way. Solar is an investment and you’re adding value to your home plus receiving a deduction in your power bill.

How many panels would a typical home require and what other infrastructure is required?

The size of your solar system is driven by a couple of factors. One is, what your home usage looks like and what your usage patterns are.

You also need to look at other factors like roof space and orientation and then have your solar system professionally designed.

A very common solar system is around 6.6 kilowatts which is about 17 to 22 solar panels.  And that number simply changes based on the size or the wattage of the solar panel.

What’s the average cost of a system including installation?

It depends on the size of the system, a good quality reliable solar system for a family of four will set you back somewhere between $4200 up to $6000. That’s for a 6.6 kilowatt solar system. For a larger system, say a 10 kilowatt plus solar system, you are looking at between $7000 and $11,000.

A very good rule of thumb from a retail price is to multiply the size of the system by around 95 cents to about $1.05. So $1.05 for really good quality solid system, and about 90 cents per watt for a really good quality entry level solar system.

Where can our listeners go to find more about BidMySolar and get obligation free competitive quotes for home solar systems?

What your listeners can do is jump online at bidmysolar.com.au and register their interest. And then one of our engagement officers, will get in touch and ask specific questions about their property and create a client account. In that account is where all the information they need to know about solar sits. They will be asked to upload a copy of their power bill. Our system calculates and does modelling on their usage so we know what the right size system would be. The client also uploads a photograph of their metre board, and we’re able to tell the client whether their metre board will be compliant for solar or if they will need to upgrade.

Then the system is designed, we look at heat on your roof  and for the first time, our technology can model how hot your roof will get in peak summer. And that’s really important because that allows us to look at the different types of solar panels.

Based on the design we produce realistic and reliable financial forecasts. Now remembering that my background is finance management and financial technology. So I’m really proud of the fact that we can give people, for the very first time, reliable financial forecasts based on a specific system for the life of the system. And in fact, our financial modelling is so robust, that we’ve been able to get underwriting for a client’s power bill.

So a person can say I’d like to get my power bill guaranteed for two consecutive years on the anniversary date of each year. (You’ve got to have a special unit called solar analytics to make all this work) If your solar system delivers less than what we have modelled, then we will refund the difference to the client. So that demonstrates a high degree of confidence around our modelling. Now that’s never been done before in the market. So when someone deals with BidMySolar they get a meticulous design. They get accurate information they can compare pretty much every quality solar system in the marketplace, and they have only the very best of vetted solar companies competing to win their project.

Any plans for bidmysolar to expand beyond Australia?

We have a technology partner in the United States and they’re very excited about us getting into the market. We are also pretty much ready to go in South Africa. There is zero financial solar incentive in South Africa but there is a big move to install solar. So South Africans tend to be very, very discerning about making the right decision.

Final Thoughts

Well there you have it! I hope you found this episode useful.

For further information on bidmysolar visit their website www.bidmysolar.com.au 

If you’re ready to reduce your emissions, your household waste, live toxin-free and embrace a more sustainable lifestyle with the support of Laura, join the Self Sufficiency in the Suburbs community today!

Over to you!

Have you installed solar panel at your home or office? Share in the comments below!

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