It seems flat out dumb. Why install more panel capacity than your inverter can seemingly handle? If you're struggling to answer this, you're not alone. Here we explain this concept that all good installers recommend and fix some common misconceptions along the way.

Oversizing

Oversizing is when you install more solar panel capacity than your inverters AC output. It is very common in solar installations, particularly as panels are inexpensive and restrictions can apply on inverter sizing. Oversizing increases the production of your system and reduces the cost per kW.

Reasons Why you should Oversize

Panels don't produce their maximum output

Firstly it's important to realise that panels don't produce their max output, in fact they rarely achieve 85% of it. As they degrade, this will drop even more. So when you think of 5 kW of panels, know that only on a nice day in the sunnier half of the year will it actually produce much above 4 kW. Even then, it's only for the middle few hours of the day. Take a look at the graph below showing perfect days at various times of the year on a 5 kW system in Perth:

Why do they only produce 85%? See button below.

More Production In Non Peak Times

Looking at the graph above, you may notice how little time is spent producing close to even 85% of max output. These are simulated perfect days, so overcast days in any season will not peak at all. With more panel capacity, your inverter is always producing more than a smaller system - assuming same components and installation conditions. The system also starts earlier and finishes later. There will be times where panel production exceeds the inverters max output, but it's insignificant - we'll do some maths on this later. Remember too that your panels will degrade, even the good ones. They could easily have lost 5% output in 10 years.

Panels aren't expensive anymore

Years ago the advice was, "panels are a bit expensive now, just get a bigger inverter and wait till panel prices drop a bit". Well guess what, they have. The price jump to to add another kW with your install when you're adding no other components is so low now, it's the cheapest kW you'll buy. Even if you're going to feed most of the extra energy you produce back to the grid, run the numbers on it and you'll be surprised just how quick the ROI is on that last kW.

The cheapest kW you'll buy in your solar system is the last kW.

You might have limitations on inverter capacity

In some areas, you might be limited to a certain inverter capacity, or you may be excluded from feed-in tariffs if your inverter exceeds a specified size. If this is the case, oversizing the inverter is a way to maximise your output while adhering to these limits.

Common but wayward Concerns

The inverter Can't Cope with the Extra Power

You're right, but it doesn't have to. In our inverter features blog, we discussed the Maximum Power Point Tracker (MPPT), which finds the optimum operating voltage of the panels to achieve maximum power. However, when power is greater than the inverter can output, it changes the voltage (up or down to suit DC/AC conversion) of one or more of the MPPTs to something less efficient, thus reducing panel output. So it never sees this extra power.

The excessively detailed image below shows clipping in action at the MPPT level.

But I'll Lose Production At Peak Times

If you oversize by more than about 115%, very occasionally you will. But even if you oversize to the full 133% limit imposed by the CEC, it doesn't happen that often. See below:

• It will never happen for two months either side of the winter solstice (June 21) because the sun is at such a low angle.
• In months either side of the above, it can only happen for about an hour on a perfect day.
• In peak producing months, it will only happen for a few hours max per day.
• When any cloud comes over, it won't happen - all year round, even in summer.

Let's run the math. For 90 days in a year, we're going to assume your system clips for 4 hours at an average of 500W (this is a very high average clipping figure), and for another 90 days in a year it clips for 3 hours at 400W. Even with these high assumptions, this is a yearly total of 288 kWh of "clipped" production, or $72 if you would have used each kWh at 25c (highly unlikely given your system clips in the middle of the day). That's very small. But by oversizing your system, it's producing more power for the rest of the time outside of the clipping times we calculated - which is the majority of the time. It's a no brainer.

my warranty wIll Be Null And Void

Inverter manufacturers usually tell you their maximum warranted DC (panel) input percentage per AC output, provided voltage and current parameters aren't exceeded. This percentage usually sits between 100 and 200%, meaning some inverter manufacturers let you put double the capacity. Remember, the CEC limits you to 133% anyway, and most good manufacturers are far beyond this limit.

Why don't I just Buy A Bigger Inverter If I'm Oversizing

Provided you're not limited by your network or energy retailer then it's a valid suggestion. Before we run the math, we made a big overestimate earlier regarding how much we'd clip our system if we oversized by 133% and came up with 288 kWh. We then made a second overestimate by assuming we'd use all of it, saving 25c per kWh. In reality, we should have used something a lot lower, maybe in the mid to high teens as a lot of it would be sold to the grid. So even though we came up with a figure of $72 per year, we'd be shocked if it was more than $45. At $45, the $300 investment on the bigger inverter is looking at a payback of just under 7 years, which is reasonable. Please note though this is at the full 133% oversizing capacity. If you're only at 120% oversizing, then it's around 60% less clipping and the payback of the inverter upgrade is well over 10 years. So if you're allowed to have a bigger inverter, we believe it's only worth considering if you're approaching the 133% mark.

Few Tips When Oversizing

Know the CLean Energy Council (CEC) Limit

For standard grid connect systems with no battery, you are limited to 133% of the inverters nominal AC output capacity. Note as well that some inverters have a nominal output capacity lower than the max. So a 5 kW inverter would be limited to 6.65 kW. If you exceed this limit, the whole system doesn't meet CEC guidelines and you wont qualify for STCs.

Use At Least Two Orientations

If all your panels are facing north, they'll all peak at the same time and your systems peak output will be higher. By moving panels to the west, or adding some to other aspects, you'll reduce the peak output and widen your production curve. This reduces clipping. See the two graphs below showing an all north simulation compared to a north and west.

6.5 kW all north. Clipping occurs more often. System finishes earlier without west panels. Good winter production. 

6.5 kW with 3.5 on the north and 3 on the west. Less clipping and wider production curve. Poorer winter production.

West panels specifically will generate later in the day, which can also benefit home owners financially by increasing self consumption. East and west produce approximately 15% less over the year depending on where you are. The catch with this is its about 0% in Summer and 30% in winter (more info) - so winter production takes a hit which is illustrated above.

I'll see how it goes, if my production is low then I'll Add

Big mistake. You'll pay much more if you choose to add this capacity later, something that many people have sadly discovered. You pay many fixed costs to install a system, and a lot of these also apply to upgrades. It's much more cost effective for the installer to spend an extra 30 minutes while he's there installing those extra panels rather than travelling back later.

Summary

We highly recommend oversizing. If you're installing on multiple orientations then a good portion of the drawback is negated anyway. The extra panel capacity is inexpensive provided you do it with the original install. Yes you could also upgrade your inverter capacity (if you're allowed) when increasing panel capacity, but the ROI on the inverter upgrade will unlikely stack up unless you're oversizing by the full 133% on an entirely north facing array or it's a very inexpensive jump.

The name suggests that oversizing puts the inverter under more stress, but we don't actually think this is the case. If anything, only installing 100% panel capacity per nominal inverter output should be frowned upon and labelled undersizing!