Benefits of solar energy

Discover the benefits of solar panels, solar batteries and renewable energy in your home today

  • Reduce costs

    Electricity generated from solar power can save significantly on electricity costs when the sun is shining.

    How it works: Solar panels convert sunlight into electricity, which you can use in your home or sell back to the grid. By reducing how much power you need to draw from the grid during the day you can make big reductions in your bill. Any extra power you produce will automatically be sold back to the grid which further increases your savings.

  • Save it for a rainy day

    With the addition of a solar battery, excess electricity generated can be stored for use when you need it.

    How it works: Batteries allow you to store excess electricity generated when the sun is shining and use it at other times when you need it. Because the value of excess electricity that you sell back to the power grid (feed-in-tariff) is generally lower than what you are charged when you consume energy, it can be more efficient to store your own energy for later use.

How solar systems work

Graphic displaying the key componens on how solar works

There are four key components in a typical household solar system. These include:

  1. Solar panels: panels that sit on the roof and convert the energy in sunlight to electrical energy. This is in the form of direct current (DC) electricity.
  2. Inverter: converts DC electricity to alternating current (AC) power. This is the type of power that is required for your home and the grid.
  3. Switchboard: where the power is sent to so that it can be used by your household electrical equipment.
  4. Grid/meter: when energy production from your solar panels exceeds energy consumption, the overflow is sent back to the grid to be used by other households or businesses. Likewise, when you need more power than you are producing (like at night) your house will draw electricity from the grid.

Basically, solar panels turn the energy in sunlight into electricity, and an inverter is used to make this electricity suitable for use in the home.

Once suitable, the power goes to your switchboard and can be used in your home. If you aren’t using all the power being produced, the overflow will be transferred back into the grid.

How solar batteries work

Home batteries store excess solar generation for later use, taking the idea of maximising self-consumption one step further.

Batteries also have the potential additional benefits of purchasing grid power at off-peak times when it is cheap, or selling the stored power back to the grid when the price is high.

Solar energy is a clean and natural source of energy generated from the sun, making it an environmentally friendly and sustainable option for energy production.

Getting the most out of your solar investment

energy consumption graph

Energy consumption is typically higher in the morning when people are getting ready for work and school, and in the evening when they return from these activities before bedtime.

On the other hand, solar power is mainly generated during the middle of the day when people are away from their homes. This means that there is an excess of solar generation during this time, and overflow is exported back to the grid at around 11 cents per kilowatt hour.*

When people return to their homes in the evening, no power is being produced and therefore electricity must be purchased from the grid at around 25 cents per kilowatt hour. Clearly, this isn’t ideal.**

A great way to maximise your self-consumption is by setting timers on all of your big ticket items. This includes heating and cooling systems, water heating, pool pumps and electric vehicles. Timing these to run during the day will make the most out of your solar purchase.



All about solar rebates and incentives

For most households, the financial benefit of installing solar comes from minimising the amount of electricity you need to purchase from the grid. There are also three solar rebate or incentive programs available if you install a solar system on your home in Victoria. 

Victorian Solar Homes scheme

On 19 August 2018, the Victorian State Government announced a new rebate where Victorians can install a solar panel system and receive half the installation cost back (up to $2,225). This 50% rebate is available for: 

  • owner-occupied homes valued at less than $3 million, with a combined household income of less than $180,000 per annum (before tax)
  • when the house doesn't have a solar panel system already installed
  • when you install a Clean Energy Council (CEC) approved product and use a CEC Accredited installer
  • and the eligible solar system is installed between 19 August 2018 and 30 June 2019

Update on 12 April 2019: this rebate scheme is now closed to new applicants, and the scheme will reopen on 1 July 2019.

Small-scale Technology Certificates (STCs)

STCs are part of the Australian Renewable Energy Target which aims to increase the generation of renewable energy in Australia and decrease emissions. To offset carbon emissions, energy retailers purchase certificates created after households and businesses install renewable energy systems such as solar panel systems.

The geographical location of your solar system, installation date, and the amount of energy it generates determines the number of certificates created that you can sell or transfer to 'recoup' costs. Typically, the STC incentive is paid as an upfront discount off the purchase price of a solar system.

Find out more about STCs at and calculate the number of certificates your system is eligible for using the STC Calculator.


The solar Feed-in-Tariff is a credit that you receive from your energy retailer for excess energy you produce and send back to the grid. This helps you ensure that excess solar energy is not going to waste and can help reduce your energy bills ongoing. Find out more about Feed-in-Tariffs on the RACV Solar FAQs page.

Our top tips when considering solar

Find out more about RACV Solar

For a break down of how solar works to post-installation support, find out more on the RACV Solar FAQs page