Solar 2.0: How Times Have Changed in Solar Energy
Solar 2.0: How Times Have Changed in Solar Energy
If you’ve looked into installing solar panels in the past, you may have been encouraged to go big – install a large system, export your excess electricity to the grid, and let the high feed-in tariffs cover your night-time energy consumption. This was the dominant model for years, where homeowners could take advantage of generous feed-in tariffs of 15 to 50 cents per kWh. But times have changed. The solar market, incentives, and energy tariffs have evolved dramatically, and we’re now entering a new era that we call Solar 2.0.
This blog post will explore how the landscape has shifted, and why sizing your system to match your consumption patterns – rather than exporting large amounts of excess energy – is the smarter choice today. We’ll dive into an example of how solar worked in the past versus how it works now, and why it’s important to rethink the size of your solar system to make the most out of it.
The Solar 1.0 Model: Big Systems, Big Exports
In the earlier days of solar energy, homeowners were often advised to install larger systems than they strictly needed for their daytime consumption. The reasoning was simple: with feed-in tariffs as high as 15 to 50 cents per kWh, exporting your excess daytime solar generation to the grid was a lucrative way to cover your night-time usage. Even if you were not home during the day to use the solar power directly, the energy exported to the grid could still offset the electricity you needed from the grid during the night.
Let’s look at an example.
Example: 20kWh Usage Per Day with Low Daytime Consumption
Consider a household that consumes 20kWh of electricity per day, but has low daytime consumption. Most of their electricity is used in the evenings and at night when the family is home.
In the Solar 1.0 model, they may have installed a large system, say 13.2kW. This system would generate a lot of excess electricity during the day while the house is largely empty. With a high 15c feed-in tariff, they could export the surplus electricity to the grid, and this would provide enough income to cover the costs of their night-time electricity usage.
- Daily Usage: 20kWh
- Daytime Usage: Low (maybe 5kWh)
- Night-Time Usage: High (15kWh)
- System Installed: 13.2kW
- Feed-In Tariff (Old Rate): $0.15 per kWh
- Grid Electricity Rate: $0.40 per kWh
Here’s how it worked:
- The 13.2kW system would generate roughly 55kWh per day in a sunny climate.
- Out of that, 5kWh is consumed directly during the day, leaving 50kWh of excess electricity exported to the grid.
- With a 15c feed-in tariff, they would earn $7.50 per day (50kWh x $0.15).
- Their night-time usage of 15kWh would cost $6 per day (15kWh x $0.40).
- In this model, they would still come out ahead, with their feed-in earnings covering their night-time usage and leaving a little extra.
The New Reality: Solar 2.0 and Lower Feed-In Tariffs
Today, feed-in tariffs have dropped drastically, with most energy providers offering only around 5 cents per kWh for exported solar energy. As a result, the economics of exporting large amounts of solar power to the grid no longer make sense. In the Solar 2.0 world, the focus has shifted to self-consumption—using the solar energy you generate directly in your home, rather than sending it to the grid.
Let’s take the same household with 20kWh daily usage, but now apply the new feed-in tariff of $0.05 per kWh.
- System Installed: 13.2kW (same as before)
- Feed-In Tariff (New Rate): $0.05 per kWh
- Grid Electricity Rate: $0.40 per kWh
Here’s the breakdown:
- The system still generates 55kWh per day.
- 50kWh of excess electricity is exported to the grid (since daytime consumption remains low).
- With the new 5c feed-in tariff, they only earn $2.50 per day (50kWh x $0.05).
- Meanwhile, their night-time usage of 15kWh still costs them $6 per day (15kWh x $0.40).
Now, the household is losing $3.50 per day. The math no longer works in their favour, and the old strategy of oversizing your solar system to cover night-time usage through feed-in tariffs has become outdated.
Solar 2.0: Rethinking System Sizing for Modern Times
In the Solar 2.0 world, it makes much more sense to install a system that is optimised for your daytime usage. The focus is now on self-consumption—using the solar power you generate to directly meet your electricity needs during the day, rather than exporting excess electricity to the grid for a low return.
Let’s revisit our example household using 20kWh of electricity per day with low daytime consumption.
Scenario 1: Solar Only
If this household decides to stick with a solar-only system, they may only need a 3kW system. This smaller system will generate around 12kWh per day, which can cover the 5kWh they use during the day. This way, they’re using the solar power directly without sending much to the grid.
- System Installed: 3kW
- Daily Solar Generation: ~12kWh
- Daytime Usage: 5kWh
- Excess Solar Exported: 7kWh
- Feed-In Tariff: $0.05/kWh
- Feed-In Earnings: $0.35/day (7kWh x $0.05)
- Night-Time Usage Cost: $6/day (15kWh x $0.40)
They would still have to purchase 15kWh of electricity from the grid for night-time use, but with their smaller system, they avoid exporting large amounts of solar for minimal earnings.
Scenario 2: Solar + Battery
Alternatively, if this household chooses to add a battery, they can store the excess solar energy generated during the day to use at night. In this scenario, they might opt for a 5kW solar system with a 12kWh battery.
- System Installed: 5kW
- Daily Solar Generation: ~20kWh
- Daytime Usage: 5kWh
- Battery Storage: 12kWh
- Excess Exported to Grid: 3kWh
- Night-Time Usage (Battery): 12kWh
In this scenario:
- The 5kW solar system generates 20kWh per day, covering their daytime usage and charging the battery.
- The battery stores 12kWh, which they can use to cover most of their night-time usage.
- Only 3kWh is exported to the grid, earning $0.15 per day.
- They still need to purchase 3kWh from the grid at night, costing them $1.20 per day.
In this case, the household is far better off:
- Daily Grid Cost: $1.20 (instead of $6)
- Total Savings: They drastically reduce their reliance on grid electricity.
The New Way Forward: Use Solar Smartly
The days of oversizing your solar system to maximise exports are gone. With today's low feed-in tariffs, the focus is on using the solar power you generate to directly power your home during the day and, if you have a battery, to cover your night-time consumption as well.
In a Solar 2.0 world, system sizing is about being smart:
- Match your system to your daytime consumption.
- Consider a battery if you want to cover your night-time usage without relying on the grid.
Get Your Personalised Solar + Battery System Recommendation
While these examples provide a general guide, every household is unique. Your ideal solar system size depends on your exact energy usage patterns, how much electricity you use during the day versus at night, and whether or not you want a battery.
To get a detailed, personalised analysis of your energy needs, use our AI Home Energy Analyser. It’ll calculate the optimal system size based on your unique consumption and provide recommendations tailored to your household.
Click here to use our AI Energy Analyser and discover your ideal solar solution.
