Australia nearing record amount of solar panel uptake to beat rising power prices, analysts say
Exclusive: The ongoing strength of rooftop solar installations contrasts with the sharp slowdown in new large-scale solar farms
Rooftop solar is on track for another near-record annual installation tally as households seek to beat rising power prices with new or bigger photovoltaic systems.
In the first six months of 2023, households and businesses added about 1.46 gigawatts of new solar capacity in small-scale systems, about a fifth higher than a year earlier, according to Green Energy Markets. For June alone, almost 250 megawatts of new capacity went on to rooftops, 13.2% more than for the same month in 2022.
Higher electricity prices in the past year have stoked demand for solar panels, the director of analysis and advisory at Green Energy Markets, Tristan Edis, said. With a further increase of as much as 25% being imposed from this month, 2021’s record for new capacity of about 3.2GW set in 2021 may come close to being broken.
Illustration: Green Energy Markets
“It’s tracking at the second highest it’s ever been,” Edis said. “I think it’s going to continue to be a robust year in terms of sales because of power prices … and by the end of the year, [new capacity] is probably going be similar to what it was in 2021.”
Australia has the world’s highest per-capita solar energy penetration, with almost one in three homes hosting PV panels. Even in winter, more than a quarter of the electricity used in the eastern states is being generated on rooftops during the peak of sunny days such as Tuesday, according to the OpenNEM website.
The ongoing strength of rooftop solar installations contrasts with the sharp slowdown in new investments for large-scale solar farms in recent years.
Rystad Energy, a data group, estimates approvals for utility-scale renewable projects sank by 75% since 2018 in Queensland, New South Wales and Victoria, with supply chain issues, transmission project delays and a lack of backup storage capacity to blame.
NSW was the state most affected by delays in project approvals, “putting it at real risk of not approving enough capacity in time to meet its 2030 target of 12GW of operational utility solar PV and wind”, Rystad said.
Existing solar farms were facing curtailment in some regions, such as western Victoria, where generation capacity exceeded the capacity of the grid to transport electricity to users. During the first quarter of 2023, average curtailment rose by a third from a year earlier in the national electricity market, the Australian Energy Market Operator said.
“There’s been a whole heap of solar farms added [in Victoria],” Edis said. “Almost all the duration between 11am and 1pm has been curtailed. It’s been spilled.”
Edis said governments were better off promoting the take-up of “plenty of rooftop solar” until grid connections improved and big batteries became cheaper.
Instead, states have been winding back support for solar and batteries for the home. South Australia, for instance, has ended its batteries support plan and Victoria is phasing its out, Edis said.
The rooftop solar industry was “just ticking along” at an annual pace of 3.2GW “but we’re probably capable of doing a lot more”, he said. “We don’t have to upgrade transmission there.”
Of new systems being bought, many are replacements of small units by larger ones as some households took advantage of falling prices. “You’re actually getting to have a second go at the low-hanging fruit” of the most suitable rooftops, Edis said.