The exponential growth of the Australian solar PV industry is finally set to end in 2013, one year after previously expected, according to the latest analysis by leading industry forecasters, Sunwiz and Solar Business Services.
The latest edition of their annual forecasting document, “Australian PV – Market Outlook Summary to 2013”, predicts that installed capacity in 2012 is expected to top the previous year, but the outlook is for a contraction in 2013.
The report says that in the last two years, solar PV has become much more visible on the city and the rural landscape – particularly from the air. Around 1 in 12 homes are now being fitted with rooftop systems. The irony is that growth has occurred in the last 2 years, despite attempts by both the state and federal governments to cause a contraction by dramatic changes to feed in tariffs and the solar bonus scheme.
“The growth this year certainly caught us by surprise,” says Morris, of Solar Business Services. “We watched pretty much every scheme in the country get axed in 2011, and correctly predicted the cessation of support in Queensland and Victoria in 2012. Combined with the reduction in the STC multiplier, we expected a significant cooling off for the rest of 2012.”
However, one lesson is clear, he says. Consumers have proven time and time again that the “smell” of a cut is enough to prompt them into action. The unpredictable timing of these cuts just happened to coincide with a continuing strong exchange rate and aggressive pricing from solar PV manufacturers desperate to clear inventories, and local retailers desperate to avoid a slow down in sales.
He says despite claims from the likes of Victorian Energy Minister Michael O’Brien that “feed-in tariffs are not driving the growing popularity of solar energy”, there is a plethora of evidence that they are. “When they are threatened, sales surge and when they end, we enter the valley of death and the market collapses,” Morris says.
However, Morris and Warwick Johnston of Sunwiz say that solar PV will remain popular because it continues to be the easiest way to reduce electricity bills. “With electricity prices rising more steeply than anticipated consumers continued to sign up in droves, desperate to protect them selves against price rises,” Johnston said.
Their analysis of 2012 included some surprises – in the first six months the market had registered almost double the number of solar PV installations – and sales volume – than anyone predicted.
Secondly, they started to see the emergence of an underlying market, far healthier than originally anticipated. NSW for example has almost recovered from Premier Barry O’Farrell’s attack and attempt to introduce retrospective changes.
However, the second half of 2013 is expected to be considerably lean, and with many solar PV businesses already struggling to meet overheads on the back of falling numbers of lower-priced sales, they say market changes are inevitable.
The dominance of Queensland in the Australian market is also set to wane, to the point where installations in the second half of 2013 could be equally spread across each major Australian state.
Full details of the report can be found here.