Renewable energy

Key points

  • Sources of energy are regarded as renewable if their use does not cause them to be depleted. Solar, wind, geothermal, marine, bioenergy, and hydropower are all types of renewable energy.
  • Renewable energy provides many benefits including economic (reducing energy costs), health (reducing air pollution), and environmental (reducing greenhouse gas emissions).
  • The most common renewable energy systems used in Australian homes are solar photovoltaic (PV) systems to produce electricity, air source heat pumps and solar hot water systems.
  • Other renewable systems include wind generators, micro-hydro generators, and biomass heaters (where the biomass is from a sustainable source such that carbon lost through burning is replaced by equivalent amount of regrowth).
  • Renewable energy systems should be carefully designed to suit your household size and energy use. They should be installed by an accredited installer.
  • You can manage your energy use to maximise the efficiency of your renewable energy system.

Understanding renewable energy

Sources of energy are regarded as renewable if their use does not cause them to be depleted. Solar, wind, geothermal, marine, bioenergy, and hydropower are all types of renewable energy. Solar energy is carried by radiation from the sun. Wind power is generated by using the wind to turn the blades of a wind turbine. Geothermal energy can be produced from heat differences between the surface and underground, while marine energy can be produced through either seawater heat differences, or wave action and tides. Bioenergy uses the energy stored in plant matter. Hydropower uses the energy stored in elevated water.

For residential applications, the most likely renewable energy sources to be harnessed are solar for electricity, heating and hot water, and geothermal and bioenergy for heating.

Renewable systems offer economic, health and environmental benefits. Renewable energy systems can produce electricity, heating or cooling with very low to zero greenhouse gas emissions. Renewable energy systems are a significant investment for most people, but equipment costs have been falling considerably in recent years, especially for solar photovoltaic (PV) systems.

Renewable energy systems that generate renewable electricity have high rates of adoption by homeowners across Australia. One in 4 households now have solar panels on their roof – the highest uptake of household solar in the world (Clean Energy Regulator, 2020).

The National Construction Code 2022 energy efficiency provisions include a whole-of-home annual energy use budget as a requirement for new homes. The budget is based on the societal cost of energy. This is the total cost of greenhouse gas emissions and the time-of-use impact on the energy network, which is comprised of the energy used by the building multiplied by the cost to society for that energy. 

The annual energy use applies to the heating and cooling equipment, hot water systems, lighting, swimming pool and spa pumps, whilst considering the thermal performance of the home and onsite renewable energy systems such as rooftop solar panels to produce a whole-of-home energy use assessment and rating. Homeowners may choose to exceed these requirements to create a zero energy or energy positive home. 

The importance of managing, storing, and optimising renewable energy will grow, as these resources play an increasing role in the generation of energy for our homes.


Renewable energy systems usually operate with minimal running costs, often paying for themselves in lower energy bills in the short to medium term.

Types of renewable energy

Renewable electricity

Electricity accounts for more than 53% of the energy used in Australian households and creates around 84% of residential greenhouse gas emissions (Energy Consult 2022). Increasing the share of renewable electricity being used to power households and the electricity grid will reduce greenhouse gas emissions.

Renewable systems that generate electricity can be either connected to the grid, or operate as a stand-alone system. Renewable energy systems are usually not able to provide continual energy because of the intermittent nature of some of the energy sources (for example, sunlight and wind). To fill the gaps in supply, electricity can come from storage systems (for example, batteries), fossil-fuelled generators (for example, petrol or diesel) in stand-alone systems, or the electricity grid in grid-connected systems.

A grid-connected system is a system that can import electricity from, or export electricity to, the electricity grid. Electricity is drawn from the grid at times when the household needs more energy than the renewable energy can supply. Electricity is fed into the grid when the household uses less energy than is being generated from renewable energy. Usually a payment or credit (known as a ‘feed-in tariff’) is made to the householder for this electricity fed into the grid.

Off-grid systems mean that the household’s renewable energy system is not connected to the electricity grid. Off-grid systems are often used in semi-rural or remote areas where the cost of connection to the electricity network is too expensive, intermittent, or not available. Off-grid systems can provide reliable electricity in areas where blackouts are common. These systems are more complex and expensive than grid-connected systems. However, the cost of a new grid connection can be expensive in some areas, so this could make the cost of a stand-alone electricity system cost competitive as an option.

Whether grid-connected or stand-alone, it is important that your renewable energy system is sized correctly. Sizing will be influenced by the available energy resource, the energy expected to be used, physical space and project budget. Financial incentives provided by government or electricity suppliers may be limited to certain sizes or systems. For example, the Australian Government’s Small-scale Renewable Energy Scheme (SRES) assists with the upfront costs of installing small-scale renewable technologies that are under 100kW in capacity.


A line graph shows rooftop solar PV installations have been increasing rapidly since 2001 up to 2.5 million installations in 2020.

Solar PV installations are increasing across Australia

Source: Clean Energy Regulator (31 August 2020)

Renewable heating and cooling

Heating or cooling accounts for 40% of total residential energy used in Australia. It is a major driver for energy consumption, particularly in colder states. Around 86% of the total space conditioning energy is used for heating, 11% for cooling and 2% for standby operations. Renewable heating and cooling systems can serve entire homes, or rooms within the home.

Renewable heating and cooling systems generally use both renewable energy and some input electricity (for example, from the grid or solar PV) to operate pumps or fans. Some renewable energy systems draw their energy from the environment, such as the ground (in the case of geothermal heat pumps), or supplement energy with outside air (in the case of reverse cycle air-conditioners or air-source heat pumps). Refer to Hot water systems for more information.

The use of both renewable and grid electricity (and the associated costs and emissions) can be reduced with good passive design and energy-efficient practices. If the home has a solar PV system, this can also be used to pre-cool or pre-heat the home during the day when most energy is generated.

Other renewable heating sources include biomass. Biomass, in the form of wood, is the oldest form of heating and is still in use in wood-burning stoves and fireplaces (refer to Heating and cooling).

Renewable hot water

Water heating contributes 23% to overall energy consumption in the home. Heat pump technology can be used for water heating as well as space heating. Solar energy can also be used for heating water – roof mounted solar collectors absorb energy from the sun to heat water which flows to a storage tank.


If you are interested in renewable energy but cannot purchase your own system at the moment, you can still access renewable energy sources. GreenPower is a voluntary government accreditation program that enables your electricity provider to buy renewable energy on your behalf. It aims to increase Australia’s capacity to produce environmentally friendly renewable electricity. It also gives customers the ability to buy renewable, net-zero emissions electricity from a trusted source.

GreenPower comes from accredited Australian renewable energy generators like wind, solar, mini-hydro and bioenergy. The program is an independent government accreditation scheme and is recognised by certification bodies such as the National Australian Built Environment Rating System (NABERS) and Green Star.

Most electricity retailers in Australia have a GreenPower accredited product that lets you purchase between 10% and 100% of your electricity from renewable sources. Check with electricity retailers to find out your options for buying accredited GreenPower.


GreenPower’s strict accreditation and auditing framework gives GreenPower customers confidence they can purchase renewable energy with minimal environmental impact and net zero emissions.

" "An infographic outlines the 4 step  model for a consumer to purchase GreenPower.

GreenPower’s accredited schemes have stringent environmental and reporting standards

Source: National GreenPower Accreditation Program (2020)

Renewable energy technologies

Solar photovoltaics

There are 2 main types of solar energy technology: PV and solar thermal. Solar PV produce electricity from solar energy (sunlight) directly. Solar thermal technologies use the sun’s energy to generate heat.

Solar cells are usually monocrystalline, polycrystalline or thin film. PV panels are made up of a connected group of PV cells to form a usable size and electrical output. Solar PV panels can be expected to last 25 years or more and are suitable for use in urban areas as they do not take up much space, are not heavy, and make no noise.


Australian Standard AS/NZS 5033 recommends that owners of solar PV systems have their system components inspected regularly and annually, including DC isolators.

Solar PV panels are typically mounted in groups connected together to reach a high enough voltage for efficient operation of the inverter. This inverter connects them to the house or the grid. These are called solar PV arrays. Most residential rooftop solar PV arrays in Australia are 3–5kW.

Solar PV panels are mounted on a rack or frame. This rack or frame can be free-standing and oriented to catch the most solar radiation, but in an urban environment, it is more usually attached on the roof. There are also innovations that incorporate solar cells in the building fabric or embed them in building materials such as roof tiles – this is not common yet, but is likely to be an increasing trend.

A house in Brisbane with a solar storage hot water system and a solar photovoltaic array

A house in Brisbane with a solar storage hot water system and a solar photovoltaic array

Photo: Getty Images

Solar thermal

Solar thermal technologies convert sunlight into thermal energy. The systems are made up of collectors, which are typically flat glass ‘plates’ or evacuated tubes. The collectors are heated by the sun, which in turn heats water which is then stored in a tank.

Some systems do not heat the water directly, but instead heat a refrigerant fluid (similar to antifreeze used in vehicle cooling systems). This fluid flows in a closed loop and transfers the collected heat to the water in the tank via a heat exchanger. These systems are typically combined with a gas or electric water heater to help bring the water up to temperature when there is not enough heat from the sun.

Wind generators

Wind generators or turbines use the wind to turn a rotor that drives a generator. They come in many shapes and sizes. The most common is the horizontal axis turbine with blades like an aircraft propeller and a tail or vane to direct it into the wind.

Wind generators are not suitable for most homes. Household wind systems are much more expensive than solar PV systems, and wind turbines must be situated where they can catch smooth, strong, consistent winds. Few homes in Australia have such locations. Wind systems can be off grid, connected to the grid without battery storage, or connected to the grid with battery storage.

Things to consider if you are thinking about buying a wind turbine:

  • Location – this is the most important consideration. You must have a location with smooth (not turbulent) reasonably strong (more than 4 metres per second (m/s)) winds. Wind turbines will generate the most energy on elevated, open land where winds are not blocked by trees or buildings. Urban areas are not suitable for wind turbines because the winds are usually turbulent, and most jurisdictions do not allow turbines in urban areas. Be wary of turbine installers or manufacturers claiming products are suitable for urban or turbulent locations.
  • Tower height – as height increases, winds are usually faster and smoother. You should therefore install your wind turbine on the highest tower possible. For example, the average wind speed may be 3m/s at 12m, which will produce little electricity, but 5m/s at 30m will produce much more. A typical tower used in domestic wind generator systems is 15 to 20m tall, and towers of at least 24m height are appropriate in areas where the land is flat or elevated and there are no obstacles within 150m. It is important that sufficient footings are used to support a tall tower, and these can be expensive. Towers may be tilt-up, guyed lattice, or freestanding. All have different footprints and different arrangements for maintenance of the turbine.
  • Size – the size of a wind turbine is measured in kilowatts (kW). Small wind turbines for households typically range in size from 0.4kW to 20kW, depending on the amount of electricity you want to generate. Compare turbines by their predicted annual energy output for the average annual wind speed at your site. The Global Wind Atlas is a free, web-based application that displays wind resource potential and is a useful initial guide to whether your location may be well suited to a domestic wind generator. A detailed survey of suitability should also be undertaken.

A domestic wind turbine in motion.

A horizontal axis domestic wind turbine

Photo: AUSWEA and University of Newcastle

Micro-hydro generators

Micro-hydro generators convert the energy from flowing water to electrical energy. These are the least common small-scale residential renewable energy source in Australia.

The flowing water may be from a natural source (for example, a river or creek). Sites with a sufficient source of flowing water are rare; consultation with an experienced professional is necessary to ascertain the suitability of a potential site for a micro-hydro system.

Alternatively, micro-hydro generators can be used with pumped water storage. With pumped water storage, excess energy produced by a photovoltaic system is used to pump water from a creek or dam to a higher level (for example, a water tank on top of a hill). To produce electricity, the water is fed from the tank through a micro-hydro turbine.

A recent study by the Australian National University found 5000 potential pumped water storage sites that could provide more than 15,000GWh of capacity across Australia. However, these are generally only for a larger scale, suitable for commercial or community investment.

Heat pumps

There are 3 types of heat pump:

  • Air-source heat pumps extract heat from the ambient air. Products in this category include reverse cycle air-conditioners and domestic hot water systems using air-source heat pumps. Reverse cycle air-conditioners provide one of the most common and efficient forms of heating and cooling in Australia.
  • Water-source heat pumps use thermal energy stored in ground-, surface- or sea-water. Water-source heat pumps are rare in Australia.
  • Ground-source heat pumps use thermal energy stored in the ground. In most places in Australia, temperatures under the ground remain constant. Ground-source heat pumps can therefore be used for heating (when the ground temperature is higher than ambient temperature) or cooling (when the ground temperature is lower than ambient temperature).

A photograph of a rectangular plastic box on the outside of a house which condenses air for heating and cooling.


A photograph of a rectangular plastic box attached to a wall inside a home that has a vent for blowing hot or cold air.

Reverse cycle air conditioner

Photo: and Maeli Cooper


If choosing or using biomass (usually wood) for heating, the source of fuel should be considered. If collecting timber yourself, ensure that you check local government regulations regarding firewood collection. If purchasing, always ensure it is from a sustainable source such that carbon lost through burning is replaced by an equivalent amount of regrowth. Some fuels use waste material from sawmills to create pellets, which is likely to be more sustainable than direct-sourced timber and may produce less smoke.

Burning wood can significantly contribute to localised air pollution. The greatest impacts can be seen in areas where there is a concentration of homes with wood heaters, combined with certain geographical and climate features. Emerging evidence is showing that the health impacts are more extreme than first thought. Brief exposure to smoke from wood-burning heaters can aggravate asthma or worsen pre-existing heart conditions. Long-term exposure can cause heart and lung disease.

If you use a wood-burning heater, ensure it conforms to Australian Standards and is installed and operated correctly, following the manufacturer’s instructions. Ensure the wood is properly seasoned (dried) to avoid over smoking (and thus more harmful emissions). For more information on reducing wood smoke emissions, a useful guide can be found at NSW Environment Protection Authority.

Installation of such systems needs to be checked against the appropriate planning rules and regulations for your state (refer to Heating and cooling for more information). Because of concerns for air quality and efficiency, many state and local governments are offering financial incentives to replace residential fireplaces with electrical and gas heating. Check the websites of your state and local government for current offers.


Inverters are a crucial part of both grid-connected and stand-alone renewable energy systems. They are electronic devices that connect solar arrays, batteries, wind turbines and micro-hydro systems to the grid and the house. They convert direct current (DC) electricity from a source into alternating current (AC) mains power.

For home energy systems, inverters usually produce 230V single-phase AC power; 3-phase 415V inverters are also available but they are designed for commercial solar arrays. Even when there is a 3-phase connection to a home, solar arrays would usually be connected to 1 or 2 of those phases using separate single-phase inverters. The decision on how many connections are required is made by the distribution network company. They base this decision on the need to balance solar generation between the 3 phases of the grid supply running overhead, or underground, along each street.

A switch that connects the solar power to the grid and the inverter box which converts the solar power to electricity for use in the house.

A household solar inverter mounted beside an isolator switch

Photo: Maeli Cooper

A battery, connected to a solar array, will often have a separate inverter in addition to the solar inverter. Most battery inverters are also combined with chargers so they can convert power in the other direction, from AC to DC, when storing energy. However, separate chargers are used in some installations. Hybrid inverters connect both solar arrays and batteries, and require less space compared to using separate solar and battery inverters. Hybrid inverters can store DC charge directly to the battery or convert it to AC for use. These have higher efficiency when charging the battery from the solar generation because the power does not need to be converted from DC to AC, and back to DC again.

When grid connected, inverters automatically match the voltage and synchronise the frequency so that the renewable power can be fed into the mains grid. When in a stand-alone system or operating in backup mode during a grid blackout, battery inverters have the task of maintaining a steady 50Hz AC supply. Not all inverters can do this, and the ones that can are called “grid forming” inverters. Because this capability is not always available without additional expense and circuitry, it is necessary to design backup power capability into a home energy system if this is desired.

Inverters are complex electronic devices and must be installed in relatively clean areas. Australian Standards for inverters include AS/NZS 4777.1:2016 and AS/NZS 4777.2:2015 Grid connection of energy systems via inverters; AS/NZS 4763:2011 Safety of portable inverters; and AS/NZS 5603:2009 Stand-alone inverters – performance requirements.

Inverters may be either wall- or shelf-mounted. They can be large and heavy – a 5kW inverter could weigh 60kg. Inverters can become very warm when operating at large power outputs and need suitable ventilation and cooling airflow. Inverters should be installed out of direct sunlight as direct exposure can cause them to overheat. They should be easily accessible in case they need to be electrically isolated in an emergency.

The DC currents in the leads between the solar array, battery, or wind turbine and their inverters can be very large. To avoid overheating and voltage drop that can affect the efficiency of AC conversion, the leads must be of an appropriate size and kept to a minimum practical length, and the inverter should be as close as safely possible to the source of DC power (for example, solar panels). Advice should be sought from an installer on the best size, location, and wiring configuration for the inverters in a home energy system.

The AC output of the inverter connects with the building switchboard in accordance with regulations and standards. Only a suitably trained and qualified person can undertake AC hard wiring to an inverter.

Large boxes housing the batteries, with invertor boxes on the wall nearby, with connections to the solar PV system.

An off-grid system using lithium-ion batteries (from L to R: battery cabinets, inverter/charger, solar inverters)

Photo: © Off-Grid Energy Australia

Using renewable energy

Managing your energy demand

Making a home more energy-efficient reduces its overall energy demand. This delivers environmental and economic benefits for both grid-connected and off-grid renewable energy systems. Benefits for home owners can be gained by avoiding drawing from the grid or using back-up generators. The first step you should take is conserving energy by purchasing energy-efficient appliances and technology and using them only when needed.

After this, you can improve the energy efficiency of your home by targeting the building envelope (roof, walls, windows, doors, and floors). This can particularly reduce the need for heating and cooling (refer to Passive design).

Another approach is to manage your household’s energy demand to coincide with the generation of renewable energy. Through automation or the use of timers and delay start features, appliances such as washing machines or dishwashers can run during the day when solar output is high and home energy demand is typically low. This reduces the need to rely on batteries, a generator, or the grid at night.

You can also use energy produced by a solar PV system to ‘pre-cool’ or ‘pre-heat’ your home with a reverse cycle air-conditioner. This is where a cooling or heating system is set to automatically switch on before the occupants return home at night, and is run at a relatively conservative setting (for example, 16–18°C in winter or 26–28°C in summer).

Finding an installer

The design and installation of renewable energy systems requires a suitably qualified professional. The Clean Energy Council register lists accredited designers and installers who can ensure that systems comply with the appropriate Australian Standards.

The Australian Government’s Small-scale Renewable Energy Scheme (SRES) assists households, businesses and community groups with the upfront costs of installing small-scale renewable technologies such as rooftop solar PV. You must use a Clean Energy Council accredited installer to be eligible for support under the SRES. Other rebates or financial support may be available for renewable energy systems in some states and territories. These may have their own scheme requirements. For details about financial assistance in your state or territory, go to the rebates and assistance page at

The Clean Energy Council also accredits and lists approved solar retailers – solar suppliers who are signatories to an industry Code of Conduct. This code governs their sales and marketing practices, reviews their financial history, and requires minimum whole of system warranties.

References and additional reading

Learn more

  • Read Photovoltaic systems for more information on using solar energy to power your home.
  • Visit Batteries to find out whether you need to add batteries to your renewable energy system.
  • Explore Design for climate for ideas on minimising energy needs in your home.


Principal author: Scott Dwyer 2020

Contributing author: Geoff James 2020

Previous authors: Geoff Stapleton, Geoff Milne, Susan Neill, Matthew O’Regan, Chris Riedy

Updated: Department of Climate Change, Energy, the Environment and Water 2023