Australian Sunshine Illuminates The Path Toward Massive Solar PV Growth

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:

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 fuels — even 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.