Understanding Solar & Battery Systems
Posted on 30 July 2025
Understanding Solar Energy Systems
Overview
Solar systems convert sunlight into electricity to power homes and businesses. Any unused energy can be exported to the grid.
When solar was first introduced in Australia, systems were expensive but electricity was relatively cheap. To encourage adoption, governments and energy retailers offered generous rebates and high feed in tariffs. At that time, exporting energy to the grid was the primary benefit.
Today, the situation has changed.
- Solar systems are significantly more affordable
- Rebates remain available
- Australia now has over 4.1 million installed systems
- Feed in tariffs have dropped due to high solar penetration
- Electricity prices have risen significantly, particularly in South Australia
The main value of solar is now self consumption, using your own energy instead of buying it from the grid.
Maximising Solar Savings
To get the most value from a solar system:
- Run high energy appliances during daylight hours
- Shift loads such as:
- Washing machines
- Dishwashers
- Dryers
- Hot water systems
- EV chargers
Using these appliances at night means relying on grid electricity, often at higher rates.
Installing a battery reduces this limitation by storing excess solar energy for later use.
Solar System Power Flow (Without a Battery)
- Solar panels generate direct current (DC) electricity
- The inverter converts DC to alternating current (AC)
- AC electricity powers the home via the distribution board
- Any unused energy is exported to the grid
Key point:
- Solar energy must be used at the time it is generated or it is exported for a relatively low feed in tariff
Solar & Battery System Power Flow
- Solar panels generate DC electricity
- The inverter converts energy required in the home to AC
- The home uses solar energy first
- Excess energy charges the battery
- Once the battery is full, remaining energy is exported
Energy Priority
- Power the home
- Charge the battery
- Export excess energy
This process is automatic and controlled by the inverter or battery management system.
What a Battery Does
A battery stores energy for use later, typically:
- In the evening
- Overnight
- During cloudy weather
Instead of exporting excess solar energy, it is stored and reused, reducing grid dependence.
Some battery systems can also:
- Charge from the grid during low price periods
- Discharge or export during high price periods
This is particularly useful with:
- Time of use tariffs
- Wholesale pricing (e.g. Amber Electric)
- Retail plans offering free or low cost midday charging
How Energy Flows with Solar and Battery
- Solar powers the home first
- Surplus solar charges the battery
- Excess after charging is exported
- When solar is insufficient, the battery discharges
- When the battery reaches its minimum state of charge, the grid supplies power
Battery Charging and Discharging
Charging sources:
- Solar generation
- Grid charging during low price periods
- Virtual power plant (VPP) programs
Discharging occurs when:
- Household demand exceeds solar production
- VPP systems call on the battery during peak demand
The Role of the Inverter
The inverter is the central component of the system.
- Converts DC to AC and AC to DC
- Controls energy flow between solar, battery, home, and grid
- Monitors system performance using internal or external meters
Types of Inverters
Solar Inverters
- Convert DC from panels to AC for home use
- Not part of the battery but supply energy to it
Micro Inverters
- Installed on individual panels
- Convert DC to AC at panel level
- Typically used with AC coupled batteries
Battery Inverters
- Manage charging and discharging of batteries
- Convert AC to DC and back to AC
Hybrid Inverters
- Combine solar and battery inverter functions
- Manage generation, storage, and usage together
- Common in modern installations
AC vs DC Coupled Battery Systems
DC Coupled Systems
- Solar and battery connect on the DC side
- Managed by a hybrid inverter
How it works:
- Solar panels generate DC
- DC is stored directly in the battery
- Converted to AC when needed
Benefits: Higher efficiency, Fewer energy conversions & Typically one inverter.
Considerations: For existing solar systems, it often requires replacing the existing solar inverter, We always recommend that the hybrid inverter and battery be of the same brand when DC coupling.
AC Coupled Systems
- Battery connects on the AC side
- Uses an additional inverter
How it works:
- Solar DC is converted to AC
- AC is converted back to DC for storage
- Converted again to AC when used
Benefits: Ideal for retrofitting existing systems & Greater flexibility (Battery can be a different brand to your Solar inverter).
Considerations: Slight efficiency losses & More components.
Which Option Is Better?
- DC coupled systems are generally best for new installations
- AC coupled systems suit existing systems where inverter replacement is not practical
System design should consider: Age and compliance of existing equipment, if the existing Inverter location is suitable for a battery installation, Battery placement & Installation cost.
Battery Capacity and Usable Energy
Battery capacity is measured in kilowatt hours (kWh).
- Not all capacity is usable
- A portion is reserved to protect battery life
Example: 10 kWh battery may provide around 9.6 kWh usable energy
Backup Power and Blackout Protection
Backup functionality requires:
- A compatible inverter
- Backup circuits wired to a dedicated output
- Appropriate switchgear and protection
Key considerations: Not all systems include backup by default & the inverter must be sized correctly to suit the loads of the backup circuits.
General guide:
- 5 kW inverter suits limited circuits.
- 10 kW for larger single-phase loads & whole home blackout protection.
- 15 kW or more for three phase properties and whole home blackout protection.
Without backup configuration: The system house will not have power during a blackout.
Interaction with Energy Pricing and VPPs
With advanced tariffs or wholesale pricing, batteries can:
- Charge during low or negative price periods
- Discharge during peak price periods
- Export energy for higher returns
Virtual power plants may also: Control battery output during grid demand & Provide bill credits or payments in return.
A good example of the benefits of a VPP is Robbies result with amber Electric, which you can read about on his article '18 Months with Amber Electric' in the knowledge base.
What a Battery Does Not Do
- A battery does not generate energy, It only stores energy.
- It does not eliminate grid reliance unless the system is properly sized
Key Benefits of Battery Systems
- Increased self consumption
- Reduced reliance on grid electricity
- Lower energy costs during peak periods
- Potential income from energy exports
- Greater control over energy usage