How solar panels work: a plain-English guide for Melbourne homes

What is solar energy?

Solar energy is energy created by the heat and light of the sun, as the Australian Renewable Energy Agency (ARENA) defines it. Homes use it in two ways. Solar PV (photovoltaic) panels turn sunlight straight into electricity, while solar thermal turns it into heat, as a solar hot water system does. This guide is about solar PV, the panels you see on Melbourne roofs.

“Photovoltaic” means electricity from light. ARENA describes a solar panel as solar PV cells encased in glass and an aluminium frame.

From sunlight to your power points in four steps

1. Panels make DC power. The cells in each panel absorb sunlight and turn it into direct current. Panels wired together form an array.
2. The inverter makes it AC. Your appliances and the grid run on alternating current, so the inverter converts the panels’ DC before anything in the house can use it.
3. The switchboard sends it to your home. The inverter connects to its own circuit in your switchboard, so solar power reaches every light and power point through your existing wiring.
4. Spare power is stored or exported. What you don’t use charges a battery if you have one, and the rest flows out to the grid through your meter, which records it for your feed-in credit.

What a solar inverter does

How do solar cells work?

A solar cell is a thin slice of semiconductor, a material that, as the US Department of Energy puts it, conducts electricity only when energy is provided, here by sunlight. Silicon is by far the most common. In a crystalline silicon cell the atoms are locked together in a regular crystal lattice.

This is the photovoltaic effect. When light strikes the cell, it passes its energy to electrons in the silicon. The cell is made with an internal electric field, so those energised electrons move one way rather than at random, and that flow is an electric current. Thin metal lines printed on the cell, the fine grid you can see on a panel, collect the current and carry it on, cell to cell, towards the inverter.

Cells are wired in chains to make a panel (or module), then sealed behind glass in an aluminium frame. Panels wired together make an array. No cell turns all the light that reaches it into power: the US Department of Energy puts the theoretical limit for a silicon cell at about 32%, and the panels on our panels page reach up to 23.8% on their makers’ datasheets.

Solar panel types explained

The panels we compare

What are solar panels made of?

A solar panel is mostly glass, silicon and aluminium: silicon cells sealed between a glass front and a glass or plastic back, in a metal frame. The US Department of Energy calls silicon by far the most common semiconductor in solar cells. Take one panel we compare, the Canadian Solar TOPHiKu6, whose maker has its Australian office on Collins Street, Melbourne. Its layers, front to back, are below; the glass, cells, frame and junction box are as its datasheet lists them:

1. Front glass: 2.0 mm heat-strengthened glass with an anti-reflective coating.
2. Encapsulant: a clear polymer that laminates the cells in place. IEA PVPS Task 13 calls their degradation a major issue: standard module tests often miss it, and many panels in the field are found with damaged lamination.
3. Cells: 144 TOPCon cells, connected in chains, with fine printed metal lines that collect the current.
4. Back: 2.0 mm heat-strengthened glass. Some panels use a plastic backsheet instead: the REC Alpha Pure-RX datasheet lists a “highly resistant polymer”.
5. Frame: anodised aluminium alloy.
6. Junction box and cables: an IP68-rated box on the back holds 3 bypass diodes, and 4 mm² cables with Tlian T6 or Stäubli EVO2A connectors join the panel to the next one.

Thin-film panels skip the silicon wafer: the DOE describes a thin-film cell as one or more thin layers of PV material deposited on a backing such as glass; every panel we compare uses monocrystalline silicon cells instead. At the end of its life a panel is e-waste, and Victoria has banned e-waste from household rubbish and landfill since 2019.

Reading a panel’s label and type

Recycling old panels in Victoria

How panels are wired together: strings, shade and bypass diodes

On most homes the panels are wired in series, one after the other, into a string. Their voltages add up while the same current flows through every panel, and the string feeds one of the inverter’s maximum power point trackers (MPPTs), which keeps it at the voltage that gives the most power. The hybrid and string inverters on our inverter guide have 2 to 4 trackers.

Because one current runs through the whole string, shade on one panel drags the others down: CSIRO notes that a drop in one panel, or even one cell, can affect the entire string. Bypass diodes limit the loss. Inside a panel the cells are split into sections, each guarded by a bypass diode (the WINAICO WST-465NCX48-BW wires its 96 cells as 6 strings of 16, with 3 bypass diodes), and when one section is shaded its diode lets the current flow around it. The string keeps working, minus that part of the panel.

East and west faces get their sun at different times, so each face usually goes in its own string, on its own tracker. Strings can also be joined in parallel, which adds their currents instead of their voltages; WINAICO’s datasheet says parallel strings need additional blocking diodes or fuses. Where shade can’t be designed out, microinverters or optimisers give each panel its own tracker. The DC wiring runs at high voltage: it is licensed work, so look, don’t touch.

What shade costs on a Melbourne roof

Microinverters and optimisers for shade

What are the parts of a home solar system?

A grid-connected home system has panels, an inverter, two isolating switches, the switchboard and meter, and often a consumption monitor, plus an optional battery.

Victoria decided in 2006 to fit smart meters to every home and small business, and distributors such as AusNet show you both your usage and your solar exports from that meter’s data. Energy Safe Victoria recommends a service at least every 2 years, including a check and test of the DC isolator, the switch that cuts the panels’ DC supply. Look, don’t touch: work on any of these parts is for a licensed electrician.

Smart meters in Victoria

DC isolators and safety

Consumption monitoring

Solar batteries

Where does your solar power go?

Solar power goes to whatever is running in your home first. Solar Victoria describes the order:

1. Your home. The fridge, lights and anything else switched on while the sun is up run on solar first.
2. Your battery, if you have one. Solar you don’t use charges it, ready for the evening.
3. The grid. Whatever is left is exported. Your retailer must give you a credit for the solar you export, so a feed-in tariff can’t be below zero, but there has been no minimum feed-in tariff in Victoria since 1 July 2025.

Solar you use yourself saves you buying that power from the grid, which is why the share you use matters more than the export rate. Solar Victoria says households with solar panels only use around 25% of what they generate, and households with a battery around 50 to 60%.

How feed-in tariffs work

Pros and cons of solar

How much power do solar panels make in Melbourne?

Output follows the sun. A north-facing system in Melbourne makes about 49% as much on an average winter day as on an average summer day, because winter days are shorter and the sun is lower.

One 435–475 W panel makes about 617–674 kWh a year on the same roof. East or west-facing panels make about 13% less over a year, and shade, tilt and dust all change the result, so your quote shows the estimate for your own roof.

Work out your roof’s output

Can solar panels work at night?

No. With no light the cells make no power, so after dark your home runs on a battery if you have one, then on the grid: Solar Victoria notes that a battery’s stored solar powers your appliances before any power is imported. Without a battery, everything you use at night comes from the grid at your normal rate. The US Department of Energy counts this as one challenge for solar: output drops when the sun sets or clouds block it.

Clouds reduce output rather than stop it. A Melbourne winter cuts a north-facing 6.6kW system to about 16.5 kWh a day, against 34 kWh in summer.

Panel direction, cloud and winter

Grid-connected, hybrid and off-grid solar systems

Home solar systems come in three types. What sets them apart is where spare power goes and what happens in a blackout.

Solar Victoria says grid-connected systems, with or without a battery, are designed to switch off in a power outage “to protect those potentially working on nearby electricity lines”, and that a standard battery system gives no backup either. Backup in a blackout depends on more than the battery: on “the rest of the system design and which inverter is used”, so it has to be asked for when the system is designed.

Battery backup in a blackout

Our solar and battery packages

How solar works: your questions