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How Solar PV Systems Work

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A solar PV system is made up of rooftop solar panels and a device called an inverter. The solar panels capture UV rays from the sun, and convert it into DC power. The DC power is fed into a device called an inverter, which converts it to AC power. AC power is what our electricity grid supplies, and it is what all our devices run on.

What Happens to the Solar Power I Generate?

The AC power created by your inverter then goes to your switchboard. What happens to your solar power once it hits your switchboard depends on the type of electricity meter that you have installed.

There are two types of meter used with solar panels:

  • Gross metering: all the electricity your produce gets exported to the electricity grid – that is you sell all your solar power to the grid. You then have to buy all the electricity that you use in your home from the grid.
  • Net metering: all the electricity you produce is firstly made available for you to use in your home. Anything you don’t use gets sold to the electricity grid. If you need more electricity in your home than what the solar panels provide, you can buy the extra amount from the grid.

All new solar panel installations in Australia must be net-metered. Previously only NSW and ACT had gross-metered schemes. However as of 1 January 2017, all gross-metered homes in NSW were moved over to net metering, resulting in many home owners having to replace their electricity meters with ones that support net metering. Homes in the ACT that are currently gross-metered can remain on this arrangement for up to 20 years.

The type of meter you have has implications for how much money you could earn or save through installing solar panels. We cover this in more detail in the How Much Can You Save section of this guide.

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