Should you upgrade your solar panels?

Take a stroll through almost any neighbourhood and chances are there will be solar panels shining in the sun on at least a few roofs.

A third of Australian households - roughly 3.2 million - now have their own solar system, according to research by Roy Morgan late last year. And the rate of adoption has boomed in recent years, with ownership rates jumping from 14% in 2018 to over 32% in 2022.

This recent solar rush is by no means the first, though. As Vanika Sharma, a lecturer in power engineering from the University of South Australia, explains, government incentives and generous feed-in tariffs offered at the start of the previous decade kicked off the first wave of installations.

"The very first instance of residential solar in Australia was in the 1980s, but that was a unique case. Uptake really started from around 2001 to 2010, although it was very slow to start off, so the extremely rapid growth actually took place from 2010 to 2013."

There have been some considerable changes in technology over the past decade, the first of which is the increased efficiency of solar cells and the amount of sunlight they can convert into electricity.

"At the very beginning, efficiency could be around 10% to 15%," says Sharma. "Then with time, efficiency has improved, so the panels that are available at the moment tend to be more than 20% efficient with a maximum of around 25% or 26%."

Solar systems have also grown in size over the decade. Data from the Australian Energy Council shows that the average size of residential and small businesses solar systems jumped from 2.65kW in January 2012 to 9.54kW in December 2021.

Advantages of upgrading your solar panels

Given these advances, households that installed solar in the early 2010s may be wondering whether it's now worth upgrading to a larger, more efficient system. It's a question that Finn Peacock, solar expert and founder of SolarQuotes, is often asked, and while he says there are a number of considerations involved, there are a few simple answers.

"If your energy bills are higher than you'd like them to be, that is a sign that you should consider upgrading your solar system. And when I say energy bills, that's not necessarily just electricity bills - that might also include your gas bill, because you may want to swap out your gas appliances for electric ones and to do that you'll be using more electricity.

"The other time is if you've ordered an electric car. Australian houses might use 20kW hours a day in electricity, but if you're buying an electric car with a 65-75kWh battery and you do a reasonable amount of driving, you can quite easily double your household's electricity usage."

Of course, some people will simply have to upgrade if their older system packs it in.

"Obviously it's usually worth getting a good installer out to see if they can fix it, but some of the systems on roofs are so bad that they're beyond help. So, it's much easier, cheaper and better to just rip the whole thing off and start again," says Peacock.

For Heather Cleggett, a homeowner in Adelaide, energy prices and concerns about the efficiency of her existing solar system were major motivators behind a recent upgrade to a larger system.

"I never thought that my old system was working properly and, as it turned out, it wasn't. I also wanted a battery, so to run the battery I would need more panels," she says.

"I'm 72 and hopefully I will retire soon, so I want to make sure that when I do retire, I won't be faced with huge power bills. I know that I'll be spending more time at home and I just want to be able to switch on the power and not have to worry about it."

While the upgrade wasn't cheap, Cleggett sees it as a long-term investment and a hedge against rising energy costs. And the move appears to be paying off already, as she hasn't had any electricity bills since the new system was installed.

What costs to consider

Putting in a new solar system isn't an inexpensive exercise, though it will vary depending on the size of the system, as Peacock explains.

"At the moment, people are paying about $1.10 a watt so that would translate to about $11,000 for a 10 kilowatt system. Removing an old system is also generally pretty cheap, so it might add $500 to $1000 to the cost of the new system.

"I would just say that with an investment in solar or a battery, one of the biggest risks is that if you buy a bad system that fails after a few years, that destroys the economics of it. So don't go for the cheapest system on the market because it's very rarely the best option."

Peacock also notes that solar owners receiving generous feed-in tariffs may see them disappear if they upgrade their system.

"If you're on one of the increasingly rare and expiring premium feed-in tariffs, you will lose that if you upgrade your solar system in most cases. Having said that, if your solar system is so small that even with a premium feed-in tariff you're not happy with your bill, I would say you've got very little to lose by putting on a new system that's actually going to get your bill down."

Is a battery worth it?

As for Heather Cleggett, households looking to upgrade to a newer system will be faced with a decision that they are unlikely to have contemplated a decade ago: is a home battery worth installing at the same time?

For years, the cost has made batteries hard to justify as an expense, but that appears to be steadily changing, with the Clean Energy Council estimating that 34,731 small-scale household batteries were installed around the country in 2021 - a 46% increase on 2020.

"They have definitely moved from having a really long payback period that would put a lot of people off buying them to being worth consideration, in my opinion," says Peacock. "But that's more to do with how the electricity tariffs have changed than the actual cost of the batteries coming down.

"More people are being forced from a standard tariff where you pay the same cost 24 hours a day, to a time-of-use tariff where the cheapest electricity will either be overnight or during the day.

So, if you're on a tariff that really slugs you for that evening peak and your battery can charge on cheap solar during the day and then get you through that expensive peak, the payback of the battery comes right down."

Aside from helping households use their own solar to avoid the expensive electricity, batteries can also provide an additional kind of energy security - a benefit that Cleggett recently found out herself.

"I think I had the new system on for about four weeks when we had a power cut in the neighbourhood. Some of the neighbours were running around asking if anyone else's power was off, but mine wasn't, because I've got a battery."

What's in the pipeline for solar 

The advancements over the past decade are by no means the last in the solar space. As Vanika Sharma, from University of South Australia, explains, there's plenty of technology in the pipeline that could reach our homes in the future.

1. More efficient panels

"If we talk about theoretical efficiency, silicon-based solar panels could reach up to 50%. There are experiments going on at the National Renewable Energy Laboratory in the US that prove that some solar cells can reach 47.1% efficiency, but they are not commercially available."

2. Solar tiles

"Apart from residential solar panels, we can use solar cells for different purposes as well, which will help serve our energy demands. For example, in the future solar rooftop tiles could match the efficiency of panels while making things look more beautiful."

3. Solar windows

"Another application, which I believe is being researched at the moment in the US, are solar windows. So instead of using glass, solar cells would be used in place to capture energy. The efficiency would be very high, but at the moment cost is overtaking that."

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