The past year has seen a huge growth in interest in renewable energy solutions, driven by a range of concerns relating to climate change, greenhouse gas emissions, sustainability and energy independence. The uptake of renewable energy is being further encouraged by a growing range of government subsidy and rebate schemes which make renewable solutions more attractive and affordable for consumers.

Foremost among the solutions currently on offer are those that derive energy either directly or indirectly from the sun. These systems are of three main types: photovoltaic systems, wind systems and microhydro systems. Photovoltaic systems use solar panels to convert sunlight directly into electricity, while wind and microhydro systems use turbines and generators to convert the energy in moving air and water (ultimately driven by the sun) into electricity. While they can be very cost effective in the right circumstances, the practicality of wind and microhydro systems is highly dependent on location. If you live in an area without access to reliable winds (many of us) or a reliable stream or river flow (most of us), then wind and microhydro are not viable options. In general, photovoltaic systems are the most practical, versatile and flexible renewable energy systems currently available today, and can be installed in almost any location with good results.

While photovoltaic energy systems are a proven technology which has been around for decades, they are not yet well understood by the general public. There are a range of essential questions which must be considered before purchasing a residential renewable energy system, because even with subsidies and rebates such systems entail a substantial investment.

The first question is quite simple: how much energy is the system required to supply? The importance of getting the answer to this question cannot be overstated, as poor system performance almost always relates to a poor match between the energy the system was designed to provide and the energy that system users expect from it. The design of any renewable power system must begin with a detailed and thorough audit of energy requirements. During the energy auditing process, it is important to identify opportunities for saving energy and in some cases for deriving energy for specific tasks from other sources, because it is always cheaper to save energy than to generate it using photovoltaic systems.

For example, lighting is an area where considerable energy savings can be made easily and quickly simply by installing compact fluorescent light bulbs instead of incandescent or halogen bulbs. Typically, compact fluorescents will consume only 20% of the energy consumed by incandescent bulbs for a comparable light output, so it is much cheaper to simply install compact fluorescents than it is to purchase the extra photovoltaic capacity required to run incandescent bulbs. Further substantial savings can be made by avoiding the use of electricity for heating tasks, such as heating water. Solar hot water systems, or even gas-fired systems, are almost always a much more practical and economically viable solution to heating water than using photovoltaic-generated electricity.

Following the energy audit, the next question is what type of photovoltaic system best suits your circumstances? For anyone in a urban environment, grid-connected systems which feed energy directly into the power grid probably make the most sense. These systems are becoming increasingly common as more power utility companies embrace the technology and are updating their metering and accounting systems to accommodate them. Grid connect systems work on a simple principle: when your photovoltaic system produces more power than you need, the excess is fed into the grid and your meter in effect runs "backwards", creating a credit for your electricity account. At those times when your energy demands exceed your supply, extra power is drawn from the grid. At the end of each billing period, energy generated and energy consumed are reconciled and you either pay for the energy you have used or receive a payment for the energy you have supplied.

For those living in more remote locations, access to the public electricity grid may be either non-existent or prohibitively expensive. In this case, a standalone photovoltaic system will be required. Such systems differ from grid-connect systems in that they must reliably supply all electrical energy requirements as there is no grid to fall back on. Such systems also involve a greater investment in hardware because, unlike grid-connect systems, they require a battery bank and charge controller (regulator) for energy storage, and typically also include a backup generator.