Sizing Photovolatic cells based on solar load
1.Do I use average yearly solar irradiance or maximum irradiance over the year to size the PV system?


First you need to determine your load. You say it's a 1 kW. Is it intended to run 24/7? 1 hour per day? You need to determine the kWh/day requirement. Once you've done that, you can look at the PV performance. Be aware that, if the PV modules are fixed, the greatest daily total power you will get from them is roughly the equivalent of 4-5 hours at peak performance. You then need to calculate how many of these cloudless days, or their equivalent, your site will experience. So, for instance, if you can only expect half the days to be clear, you'll need twice as much PV as you think. You also need to determine that longest stretch of cloudy weather you can expect. All of this will determine how much storage (batteries, probably) you will need. And you must assume that battery charge is not 100% efficient, nor is your output inverter, and compensate for that. And finally, you need to take into account that not all batteries can be fully discharged without reducing their lifetime. Standard lead-acids which are discharged to 50% of capacity will only do so a couple of hundred times before they die. You can get deep-discharge or marine batteries which will do better, but they cost more and have less peak current capacity for a given size. At any rate, you should assume you need twice the battery capacity you think you do.


  2.Do I design the system based on module efficiency or maximum power rating?


As far as this makes sense based on the answer to question 1, the answer is power rating.