As solar PV costs have continued to decrease, it is more affordable for homeowners to purchase a larger system that covers a higher proportion of their energy consumption. The average residential solar PV¹⁸ system size has risen from 5.8 kilowatts in 2018 to 6.4 kilowatts in 2019.

The market has settled combining a five kilowatt inverter with six to 6.5 kilowatts of solar panels is the cost effective ‘sweet spot’ for a standard installation. Increasing the capacity of panels up to 33 per cent over the inverter capacity provides a higher level of generation earlier and later in the day; as well as at peak times for more than half of the year when solar irradiance is not high. Stepping up to the next size inverter (eight kilowatts) with a higher solar PV capacity adds significantly to system cost and is only likely to be cost effective for very large households with significant load during the day or where battery storage is added.

Efficiency of panels for residential installations has also increased from a historical average of approximately 15 per cent, approaching 20 per cent in 2019¹⁹. The average capacity of each panel installed increased 6 per cent from 289 watts in 2018 to 306 watts in 2019.

Figure 5: Average residential solar PV system capacity and average solar panel capacity, 2011 to 2019

To date, solar PV systems for residential use have primarily been installed by homeowners at their place of residence. The demand for solar PV by renters has continued to increase. In July 2019, the Victoria Solar Homes Program introduced rebates for installations on rental properties to ensure the benefits of solar PV can be enjoyed by as many people as possible. The Victorian Government also supported the Community Energy Hubs Program. At the end of 2019, the first installation under this program was completed with 52 apartments sharing the benefit of a combined solar PV and battery system in the apartment block.

If successful, these initiatives will help to expand and diversify the residential solar PV market in Australia, keeping installation rates high.

Footnotes

18. Solar PV systems under 15 kilowatts that are installed on residential homes are classified as residential solar PV systems.
19. Clean Energy Reviews, Most Efficient Solar Panels 2020.