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Australian Sunshine Illuminates The Path Toward Massive Solar PV Growth

By Ryan Koronowski

"Australian Sunshine Illuminates The Path Toward Massive Solar PV Growth"

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Global solar insolation average. Notice bright red oval on lower right. (Credit Mines ParisTech/Armines 2006)

Australia is climate change’s canary in a coal mine. It has been suffering heat waves, floods, and wildfires in a climate-fueled “angry summer” that demonstrates how critical reducing carbon emissions really is.

Australians are finding ways to use the sun’s energy to reduce fossil fuel consumption. According to a new report, Australia’s solar photovoltaic market could reach 10 gigawatts in five years:

The Australian solar PV market could tip the 10,000 mewagatt (10 gigawatt) mark as early as 2017, and could reach the “saturation” levels for owner-occupied houses in many areas in coming years, according to a new report.

The five-year forecast prepared by leading market analysts Sunwiz and Solar Business Services says that the Australian solar PV market – currently at 2.5GW – will likely grow to between 6GW and 10GW by 2017.

The actual outcome will depend on the speed of the growth in the largely untapped commercial sector, the pace of large, utility-scale solar farms, and the industry’s ability to penetrate more challenging parts of the residential sector.

That “saturation rate” has already been achieved in some areas of the owner-occupied residential sector — reaching 90 percent in some localities. Nationally, the average penetration rate is 20 percent. Adding apartment buildings into the mix, this share drops to 10 percent, and it is this rental market that offers the most promise for growth in solar installations.

You can see the prime driver of solar PV installation in Australia here:

(Credit reneweconomy.com.au)

The residential market has been, and will continue to be, the main force behind Australia harnessing the sun to power its homes and businesses. Rooftop solar photovoltaic is reshaping peak electricity demand curves, especially during the summer months (the last three months in the Southern Hemisphere). When Australians need electricity the most, solar panels on their roofs are supplying it. Over the last five years, midday electricity demand is down 15% despite higher nighttime demand.

What this means is that rooftop solar PV is reducing overall electricity demand by 3%. There is so much room to grow: As of November, more than 800,000 rooftops across the country hosted solar PV – out of eight million total. For illustration, here’s the most calming video about Australian solar rooftop leasing programs you will ever see:

Solar PV is also getting cheaper, with the price dropping a third in less than a year and a half. The concern going forward is that the easy installations have already happened, rebates are harder to obtain, and the price reductions have slowed.

The growth of the industry as a whole depends upon the participation of the commercial sector, which could reach 350 megawatts next year. If utilities impose higher standing charges, the report’s authors note that this will impact the growth of the commercial sector:

The entire electricity market is at the cusp of a radical evolution which will change the fundamental dynamics of energy generation, ownership, profit structure, competition and pricing — and the role of solar is highly significant.… This issue could be a major stumbling block — or opportunity — for our market, echoing international trends and issues.

New solar and wind power in Australia are cheaper than fossil fuelseven without a price on carbon. Michael Liebreich, chief executive of Bloomberg New Energy Finance puts it succinctly: “The perception that fossil fuels are cheap and renewables are expensive is now out of date.”

Globally, solar PV demand is set to increase from 29 gigawatts last year to 31 gigawatts in 2013. This is largely due to increasing demand from Asia and falling prices for solar PV systems, and despite decreasing demand from Europe, which has faced reduced subsidies. This skyrocketing demand has made prices drop. A report by Clean Edge released this week found that falling prices led to the first PV market contraction in more than 12 years, though installations expanded:

Solar photovoltaics (including modules, system components, and installation) decreased from a record $91.6 billion in 2011 to $79.7 billion in 2012 as continued growth in annual capacity additions was not enough to offset falling PV prices. While total market revenues fell 19 percent – the first PV market contraction in Clean Energy Trends’ 12-year history – global installations expanded to a record of 30.9 GW in 2012, up from 29.6 GW the prior year.

It’s an interesting time in the solar PV world, and homeowners in Australia are leading the way.

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12 Responses to Australian Sunshine Illuminates The Path Toward Massive Solar PV Growth

  1. Omega Centauri says:

    Thats an amazing dominance of residential rooftops over commercial and utility scale. I estimated the USA build last year (of 3.3GW) was roughly 15/30/55 percent (residential/commercial/utility).

    • Merrelyn Emery says:

      I think it tells you who really cares about the future. I’m a little surprised that utility is so low but it’s only solar, not wind, ME

    • David B. Benson says:

      Numbers do not match the wording.

      • Anderlan says:

        I guess they match if you reckon the number of installations rather than the total capacity.

  2. Mark Shapiro says:

    Now that PV panels cost less than $1/Watt, they need to get mindshare among homeowners, other building owners, utility execs and regulators, architects, engineers, designers, and home builders. How do we lower or eliminate the installation cost? How much do we grid-tie, how much do we store, how much do we use directly?

    Low cost PV has arrived. Now we learn how to integrate this brand new resource architecturally and electrically.

  3. ozajh says:

    Not with Abbott in charge come September. (Just sayin’.)

    • Mulga Mumblebrain says:

      Unfortunately, you are correct. Abbott and his scurvy crew are die-hard environmental haters, like the state ‘Liberal’ regimes in NSW, Victoria and Queensland. Once elected, Abbott will show his true spots, as those state regimes have done, in attacking every environmental program existing, and as Cameron did in the UK. Cameron promised to run ‘the Greenest Government ever’, but to no great surprise (none for me, whatsoever)his regime has turned out virulently anti-environmental. Hatred of Greens and of environmentalism is, nowadays, the premier psychopathological obsession of the Right, who always need daemon figures to hate (it stops them, most of the time, from turning on each other) and they know that the logic of environmental survival is innately and irreducibly anti-capitalist and pro-equality and economic and social justice. Therefore, as a result, Abbott will be kept to the straight path, both by the business caste, but by the MSM, the Murdoch affliction, as ever, leading the way. Very, very, bad times are just ahead.

    • RobS says:

      Even with Abbot in charge, nothing short of a huge renewable energy tax can halt Solar in Australia now. In the last 12 months the solar subsidy has been cut by ~$1 per watt, the total remaining subsidy is $0.50 per watt. The Carbon tax adds 10% to the cost of electricity, however it is highly unlikely given the compliance costs and expense of rolling it back that power prices would ever fall if it was scrapped.
      The unalterable fact is that solar power is now cheaper then fossil power in Australia even with no subsidies whatsoever and no carbon tax. the worst Abbot can do is remove those things and even after all that Solar will still make sense.

      • Spike says:

        Yes market forces are beginning to work against even the cavemen with fossil fuel interests at heart. It would be interesting to see if they had the blackness of heart to effectively reverse subsidies on renewables by imposing a tax on renewables to promote continued fossil fuel burning.

        • FrankD says:

          Fear not, Spike, your worst fears will be realised. Australia has a rather poorly interconnected grid which makes smoothing out variability between regions more difficult than it should be. Having been neglected since the great power station fire sales, it badly needs overhaul and improvement, even if we kept on burning coal ’til the last trumpet.

          I have little doubt that anyone who feeds “variable, non-dispatchable power” into the grid will shortly be called on to pay for the privilege – “We need to upgrade the grid because of all your stupid solar panels! These brownouts are your fault, Greenie scum!”

          Politics: one giant race to the bottom.

        • Mulga Mumblebrain says:

          Whatever you don’t Spike, don’t bet against it happening. Just check out the record of the Rightwing regimes in NSW, Victoria and Queensland, and the position of the Rightwing MSM. We may escape because we flog our coal and gas overseas, and that will continue even until the water inundates the Opera House-too much money is involved. But, never forget-the Right here hate environmentalism with undisguised fury.

  4. James Ryan says:

    Latest pricing for p.v. out of China is sub US$0.60/Watt. The Australian residential solar market will continue to grow, albeit at a slower rate i suspect. The State Governments have mis-managed the feed in tariff’s dreadfully and set the industry up for a typical Austrlian ‘boom-bust’ cycle. However the fundamentals for solar remain very strong.