Solar panels

Learn about solar panels to help you understand how they can power your home or business.

How solar panels work

When sunlight hits a solar panel, the light energy is converted into electricity.  

This process is known as the photovoltaic (PV) effect, which is why solar panels are also called photovoltaic panels, PV panels or PV modules.

Solar panels respond to both direct sunlight coming straight from the sun and diffuse sunlight reflected from particles in clouds and the atmosphere. Solar panels are usually able to generate some electricity even on a cloudy day. However, most electricity is produced on clear days when direct sunlight hits the panels.

Measuring solar power

The rated capacity of a solar panel is the power a panel will generate under ‘standard test conditions’. This is a fixed set of conditions used to compare different solar panels, which can be thought of as ideal operating conditions.

This capacity is measured in watts (W). There are 1000 watts in 1 kilowatt (kW).

Under ‘standard test conditions’, a new solar panel rated at 350 W will generate 350 W of power. But the actual power generated is usually less than this, and depends on:

  • climate zone
  • weather conditions
  • time of day and the season
  • location
  • slope of the panel
  • direction the panel faces
  • dirt, debris or shading on the panel
  • other system factors.

A rooftop solar system is made up of multiple solar panels. The power generating capacity of a solar system (also called the system size) is measured in kilowatts (kW).

A typical home solar system might include 19 x 350 W panels, so under standard test conditions the output power would be 6,650 W or 6.65 kW.

The generating ability of solar panels decreases slightly over time. This is called ‘degradation’. The maximum degradation of a panel is described by its performance warranty.

Electricity generated

The electricity (or electrical energy) generated by solar panels is measured in watt-hours (Wh) or kilowatt-hours (kWh).

Under ‘standard test conditions’, the most electricity that 1 kW of solar panels will generate in 1 hour is 1 kWh of electricity.

Averaged over a year, the most electricity that 1 kW of solar panels can generate in Australia is between 3.5 kWh and 5 kWh per day, depending on how sunny the location is, the slope of the panels, which direction they are facing, and other factors.

You can think of a solar panel as a tap with water flowing out of it.

The power output (measured in watts or kilowatts) is how fast electricity flows out of the panel. You can think of this like the flow rate (litres per second) of water from a tap.

The amount of electricity (or electrical energy) generated over a period of time is measured in watt-hours or kilowatt-hours. This is like the total volume of water that comes out of the tap over a period of time.

This table shows a typical amount of electricity generated in one day by 1 kW of solar panels in different Australian locations, averaged over a year. They will generate more than this in summer and less in winter.

A typical amount of electricity generated in one day by 1 kW of solar panels in different Australian locations, averaged over a year.


Typical average daily generation

Alice Springs

5.0 kWh


4.4 kWh


4.4 kWh


4.3 kWh


4.2 kWh 


4.2 kWh


4.2 kWh


4.0 kWh


3.6 kWh


3.5 kWh

Size of solar panels

The rated capacity of a solar panel (in watts) depends on its physical dimensions and its efficiency. Efficiency refers to the percentage of light energy the panel converts to electricity.

Typically, panels used for household systems are around 1 metre wide by 1.7 metres long, but bigger panels are available. Larger commercial systems typically use panels around 1 metre wide by 2 metres long, but they can be bigger.

For panels of the same size, greater efficiency means a higher rated capacity. This is because, although the same amount of sunlight falls on panels of equal size, a more efficient panel converts a larger percentage of the light to electricity. The maximum efficiency of new solar panels is gradually increasing as the technology improves. More efficient panels can help get the most generation from a limited roof area.

Your solar retailer or installer will take these factors into account when designing a solar system.

Solar panel quality

The quality of solar panels determines how long they will keep generating near their rated capacity.

To make sure your solar panels are good quality:

  1. Check that they are included in the Clean Energy Council list of approved modules.
  2. Check the panel warranty.
  3. Look for manufacturers and products with positive reviews, as well as businesses that have technical support in Australia.

Manufacturer tiers

Solar panel manufacturers are ranked into 3 tiers. Tier 1 is the highest and Tier 3 the lowest.

There are a few different tier systems which are based on factors like the manufacturer's financial status, experience, scale of manufacture and level of automation. They do not measure the quality of the solar panels themselves as manufacturers may offer panels of varying quality across each tier.

If a solar retailer or installer tells you their solar panels are from a Tier 1 manufacturer, it is a sign of an established and well-regarded company. However, you should still check reviews of the particular solar panel model.