More and more people are looking into solar power as Australia’s demand for sustainable energy grows. On-grid solar systems are popular among various solar power technologies, but what exactly do they offer?
This article will discuss the advantages and disadvantages of on-grid solar systems. By the end, you’ll have a better understanding to help you decide if switching to solar is the right move.
What is an On-Grid Solar System?
An on-grid solar system is a solar power setup connected to the local electricity grid. In this setup, homeowners and businesses may generate electricity using solar panels while connected to the utility grid. Any excess energy generated by the solar panels may be fed back to the grid, often with financial benefits. Read our full breakdown of how on-grid solar systems work for a more in-depth look.
Advantages of On-Grid Solar Systems
There are many advantages to switching to an on-grid setup for your home or business, including cost savings, feed-in tariff credits, environmental impact, increased property value, and government incentives. Let’s unpack each of these advantages:
Cost Savings
One of the most compelling advantages on-grid solar systems have is their potential for significant cost savings. Since you generate your electricity, you reduce your reliance on the utility company, which often results in lower monthly electricity bills. With plenty of solar panel deals and the decreasing solar panel systems’ prices, you can quickly offset the upfront cost of solar power with your potential savings on energy bills.
Feed-in Tariffs
A feed-in tariff (FiT) is a standout feature of on-grid solar systems, allowing you to send excess electricity generated by your solar panels back to the grid in exchange for a credit on your electricity bill, paid at a rate set by your retailer (within the benchmark range set by your state regulator). On cloudy days or at night, when your solar panels can’t produce sufficient power, you can also draw from the grid, so your daily activities remain uninterrupted.
Environmental Impact
Switching to an on-grid solar system significantly reduces your carbon footprint. Solar energy is a clean, renewable power source that helps decrease greenhouse gas emissions. By generating your electricity, you contribute to a more sustainable environment, which is something traditional grid power cannot claim.
Increased Property Value
Investing in an on-grid solar system can increase your property’s value, as properties with these systems are more attractive in the real estate market. Potential buyers recognise the long-term savings and environmental benefits of solar power.
Government Incentives
Australian homeowners can access several layers of financial support to bring down the cost of going solar. The federal Small-scale Renewable Energy Scheme (SRES) provides an upfront, point-of-sale discount through Small-scale Technology Certificates (STCs), and the Cheaper Home Batteries Program extends a discount to eligible battery installations. Several states also run their own schemes, such as NSW’s battery incentives under the Peak Demand Reduction Scheme.
These incentives can help reduce the overall cost of installing an on-grid system, making it more accessible than relying solely on the grid. Because rebate values taper over time, it’s worth checking current eligibility and figures with your installer before you commit.
Disadvantages of On-Grid Solar Systems
While the benefits are compelling, on-grid setups also come with trade-offs. This includes high upfront costs, grid dependence, inconsistent energy production, space requirements, and ongoing maintenance and upkeep. Let’s talk about each of these in detail:
High Initial Cost
Despite the decreasing prices of solar panel systems, the upfront cost of installing an on-grid solar system can still be hefty. This includes solar panels, inverters, mounting hardware, and professional installation expenses. While this investment can be offset over time, the initial costs can still be a barrier for some.
Grid Dependence
While on-grid solar systems reduce your reliance on the grid, they do not eliminate it. An on-grid system usually shuts down during a power outage. This means you will only have electricity during blackouts if you have a backup generator or a hybrid system with battery storage.
If you’re keen on installing an on-grid setup but are hesitant because of this, you can quickly solve it with a reliable battery storage system. Adding a battery backup will allow you to store excess energy in case of outages so you can still operate your appliances even during blackouts.
Inconsistent Energy Production
It’s worth noting that weather conditions and the time of day directly influence the energy production of solar panels. Solar panels generate less electricity during low sunlight, so you’ll need to draw power from the grid. This inconsistency in energy production means that you will only partially be self-sufficient and still need to rely on your local grid to some extent.
Space Requirements
Another aspect to consider is the space required for solar panels in an on-grid solar system. Typically, solar panels are mounted on rooftops or in open areas for optimal performance. If you have limited space or live in a shaded area, the efficiency of your solar system may be compromised. This is a limitation that traditional power does not have, as it does not require much physical space on your property.
Maintenance and Upkeep
Since an on-grid solar setup consists of equipment, such as solar panels and inverters, there’s expected to be some maintenance to ensure they continue to work well. For instance, inverters need regular checks and occasional servicing. This adds a small yet ongoing cost and effort that’s not required with traditional grid power as the utility company handles all kinds of maintenance.
Is an On-Grid Solar System Worth It?
On-grid solar setups have many benefits, like saving money, helping the environment, and boosting property value. The advantages are appealing, along with government incentives and falling solar technology costs. However, there are also downsides, like the upfront cost and reliance on sunny weather. These factors play a role in deciding if switching to solar is the right choice.
In this article, we’ve weighed up what on-grid systems offer against where they fall short, to help you understand solar solutions better and decide on your future energy setup. Whether the pros outweigh the cons still depends on your circumstances and preferences. For more details, see our guide on how on-grid solar systems work in Australia.
Go Solar and Take Charge of Your Energy
Whether you’re weighing up on an on-grid setup for the first time or looking to get more out of a system you already have, understanding the trade-offs is the first step towards a more sustainable, cost-effective energy future.
If you’re considering adding battery storage to your on-grid solar system down the track, VoltX Energy can help. Get in touch with our team for a free quote or if you have any questions.
Frequently Asked Questions
What’s the difference between an on-grid, off-grid, and hybrid solar system?
An on-grid system stays connected to the electricity grid and has no battery by default. An off-grid system runs entirely on its own battery storage, disconnected from the grid. A hybrid system combines solar panels, a battery, and a grid connection, giving you backup power during outages while still being able to draw from or export to the grid.
Will I still get a power bill if I install an on-grid solar system?
Yes. You’ll still receive a bill from your electricity retailer, but it should be lower, since you’re using less grid electricity during the day and may be earning feed-in tariff credits for any solar you export.
What happens to my solar system during a blackout?
Standard on-grid systems automatically shut off during a grid outage for safety reasons, even if the sun is shining. To keep some power running during a blackout, you’ll need a hybrid system with battery storage or a backup generator.
Do I need a battery with an on-grid solar system?
No, a battery isn’t required for an on-grid system to function. It’s an optional addition that lets you store excess solar for use at night or during outages, rather than exporting it to the grid for a feed-in tariff credit.
How much can I save with government solar incentives in Australia?
Savings vary based on your system, size, location (STC zone), and the STC market price at the time of installation, and the value tapers down each year as the scheme winds toward its 2030 end date. Your installer can give you an up-to-date, itemised discount as part of your quote.
How long does it take for an on-grid solar system to pay for itself?
Payback periods depend on your system size, household energy usage, local electricity rates, and available rebates, but many Australian households see their system pay for itself within several years, with ongoing savings for the rest of the panels’ working life.
