Should You Oversize Your Solar System? Why Bigger Is Usually Better

When you get solar quotes, most installers will look at your electricity bill, see you use 20kWh per day, and recommend a 6.6kW system. It is a reasonable starting point. A 6.6kW system in most parts of Australia will generate roughly 24-28kWh on a good summer day, which covers your usage with some left over to export.

The problem? That calculation assumes every day is a summer day. It also assumes your energy needs will never change. Both assumptions are almost certainly wrong.

In winter, that same 6.6kW system will produce around 12-15kWh per day, roughly half its summer output. If you are using 20kWh daily year-round, you are buying the difference from the grid for five or six months of the year. And if you add a battery, an electric vehicle, or a heat pump hot water system down the track, that gap only grows.

The cost of a solar installation is not evenly distributed across the panels. A huge chunk of the total price covers fixed costs: the inverter, wiring, switchboard work, scaffolding, labour for the crew to show up, and paperwork. Whether you install 16 panels or 24 panels, those fixed costs are roughly the same.

Each additional panel only adds $200-400 to the total, including the panel itself and the marginal labour to mount and wire it. That means upgrading from a 6.6kW system (16 panels) to a 10kW system (24 panels) might only cost an extra $1,500-2,500 after STC rebates. For that modest extra investment, you get around 30% more annual energy production.

The payback on those extra panels is typically 2-3 years. After that, you are generating free electricity for another 22+ years. It is hard to find a better return anywhere.

One thing that worries people about oversizing is “clipping.” If you put 6.6kW of panels on a 5kW inverter, what happens when the panels try to produce more than 5kW? The inverter simply caps the output at 5kW. You lose a small amount of peak production around midday.

But here is what most people miss: that 6.6kW array reaches its “full” output for maybe an hour or two around solar noon on clear days. For the rest of the day, in the mornings and afternoons when the sun is lower, those extra panels are generating useful power that a smaller array would not capture. The total energy you gain across the full day far outweighs the small clipping losses at peak.

This is why the standard “panel-to-inverter ratio” in Australia is 1.33:1, meaning 6.6kW of panels on a 5kW inverter. The Clean Energy Council specifically allows this because it makes economic sense. Some installers push to 1.5:1 or higher with the right approvals, and the maths still works out.

Another common concern: “My network only allows 5kW export per phase, so why would I install more than 6.6kW?”

The export limit caps how much power you can send to the grid at any given moment. It does not limit how much your system can generate for your own use. A bigger system does not mean more export. It means more self-consumption.

With a 10kW system, you reach that 5kW export ceiling earlier in the morning and hold it later in the afternoon. Any excess above the limit gets used in your home instead. If you are running a dishwasher, washing machine, pool pump, or charging a battery, that power goes straight to those loads rather than being purchased from the grid later. Every kilowatt-hour you self-consume is worth 30-40 cents (what you would have paid the retailer), compared to 5-8 cents for exported power.

Your electricity usage today is almost certainly not what it will be in five years. The shift away from gas is accelerating, and most homes will eventually add one or more of these:

Let us compare two systems for a typical Sydney household using 25kWh per day.

For most Australian homes on a single-phase connection, the sweet spot is 8-10kW of panels on a 5kW or 6kW inverter. This gives you comfortable headroom for winter, enough surplus for a battery, and room to absorb an EV or heat pump without needing to upgrade.

Going from 6.6kW to 10kW is excellent value. The marginal cost is low, the extra generation is significant, and the payback is fast.

Going from 10kW to 13kW still makes sense if you have the roof space and plan to electrify everything. You will likely need a three-phase connection or a larger inverter, which adds cost, but the economics still stack up for high-usage homes.

Going from 13kW to 20kW is where diminishing returns set in for most residential situations. Unless you have very high usage, multiple EVs, or a home business, you will struggle to self-consume enough to justify the extra expense. The panels are still cheap, but you may need significant electrical upgrades that erode the value.

The key question to ask yourself: “Would I rather have too much solar or not enough?” In almost every case, too much wins. Surplus energy can always be exported, stored, or put to work. A system that is too small just means buying grid electricity at 35+ cents per kilowatt-hour.

If you are getting solar quotes, ask your installer to price up one size bigger than their initial recommendation. You might be surprised how little extra it costs, and how much more value you get over the life of the system. For help figuring out exactly what size makes sense for your home and budget, take our rebate eligibility quiz to see what incentives are available in your area.