There is lots of discussion around the fact that solar panels, and batteries, can save Australian homeowners lots of money, but the real question is, how?

How does it work so that your energy bills are reduced, or even so that you can make a profit?

How Can I Reduce My Energy Bill?
For those that are unfamiliar with how solar panels work, let’s take a quick look. Solar panels are used to convert sunshine into energy, which is then used immediately by a household through electrical appliances (TV, refrigerator, heating/cooling, lights, etc.). Or, if it is not being used (or more is being produced than it is being used) it gets sent into the state-wide grid for other people to use.

When you generate more than you use, it is not wasted; it produces energy for other people to buy and use in their homes, all thanks to the grid. It also means that less energy production is happening at coal factories (win-win!). Homeowners are provided with feed-in tariffs, which is the payment they receive for sending unused energy into the grid for others to use. This is a factor used to determine savings on energy bills, and they differ from state-to-state, and between energy retailers.

To reduce your energy bill, there in one thing to consider. How much is your feed-in tariff? If your feed-in tariff is higher than what you pay for electricity (per kWh), then you are well-advised to use electricity at times when your own system is not generating power (i.e. early in the morning or when the sun goes down at night). This is because you will make more money by selling it than using it yourself.

If, however, your feed-in tariff is less per kWh than what you pay to the electricity company, which is often the case for newer installations because of the reduced tariffs being offered, you might be better off using your own electricity during the day to get done what you need, and reduce your energy usage at times when your panels are not producing energy.

Whichever is the case, it is important to be smart with your electricity usage to ensure you get the maximum benefit(and savings) from your system. After all, that’s why you had it installed!

Does it Matter Where I Put The Solar Panels?
There used to be a theory that putting panels on the north of the house increase energy production levels because in Australia the sun is north of us. However, in recent times, it has been found that a range of positions on the roof will help to keep energy production up at all times of the day. Therefore, if you aim to have panels on east and west sides of your roof, you are likely to get maximum production opportunities. Not every home has a north-facing side to the roof, so east or west is mandatory anyway. But a combination of all three sides will help to increase your production.

The south side, while it will still produce energy during the summer, will be less effective as the sun is not hitting it directly.

How Can I Eliminate Electricity Bills?
Eliminating electricity bills is unusual at this point in time, though not impossible. In fact,many Australians who use their solar systems wisely can have no bill over summer, and even produce a credit (where the electricity company owes them). It comes down to knowing the best times to use electricity in your home for the maximum impact on savings.

However, for a more sure-fire way to reduce energy bills, it would seem that installing a battery storage system with your panels is the way to go. By doing this, you can store your unused energy during the day and use it when your system is not producing energy (i.e. when the sun goes down). If your battery storage is big enough, and you have enough solar panels, you can potentially never use electricity from the state-wide grid at all. How Can I Make a Profit with Solar Panels?Making a profit with solar panels can be done, it just takes an initial investment.

As we have seen, selling your unused power to the grid (particularly if your feed-in tariff is high) can see you make a profit (mostly in the form of reduced or non-existent electricity bills). But some people are taking it to the next level.If you can outlay enough solar panels to generate much more than you need each day, you could turn a profit by simply selling energy back into the grid. This is particularly beneficial if the feed-in tariff is high, but will also work if it isn’t because anything you can sell is money in your pocket.

If you install a battery storage system as well,your income would increase further. The battery will provide your home with power at non-production times, eliminating your need to purchase from the grid at all.