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Oz solar seen at 23GW by 2030, driven by ‘unstoppable’ rooftop PV

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Rooftop solar is an unstoppable force in the Australian market that will drive the nation’s total installed solar capacity well past 20 gigawatts, regardless of any attempts by the incumbent utilities to thwart its development, Bloomberg New Energy Finance says.

Kobad Bhavnagri, head of BNEF in Australia, told the 2014 Solar Conference and Expo in Melbourne on Thursday that BNEF expected around 23GW of large, commercial and residential solar PV to be installed in Australia by 2030.

But while the rollout of large-scale solar would be vulnerable to policy changes, such as any winding back of the Large-scale Renewable Energy Target, Bhavnagri said modelling on small-scale PV was “fundamentally sound and really quite unstoppable.”

Bhavnagri said Australia was likely to have 5 million installed commercial and residential PV systems by 2030, with 16GW in cumulative net additions between now and 2030. Australia currently has 1.2 million systems and total capacity of 3.1GW.

bnef solar capacity

“The behind the meter PV market will vary in size at around 900GW market per year,” Bhavnagri said, and different policy measures introduced to put the breaks on rooftop solar, won’t have much of an impact on that either way, he added, because they “don’t fundamentally damage the consumer proposition, which is very strong and very good.”

The graph below illustrates how strong the market will be, even if the utilities and regulators play around with feed in tariffs, connection fees, and even self consumption charges of the type introduced in Spain and Germany.

bnef scenario

On the large-scale solar front, BNEF is forecasting that, under the current LRET, solar and wind would each take around half of capacity, with the financing terms for large-scale PV improving steadily as financiers became more comfortable with the technology – a confidence boosted by the due diligence completed by the ACT government’s reverse auction program and two federal agencies – the Clean Energy Finance Corporation and the Australian Renewable Energy Agency that are threatened with defunding or closure.

If the RET generation target was diluted, the share of wind would start to fall, and large-scale solar would contribute up to two thirds of the capacity mix. This graph below illustrates the point, the base case is if the target is left untouched, the second if the target is diluted, and the third if it is simply deferred. Wind has much more at stake from policy changes.

bnef solar wind

If the LRET was pushed out to 2025, a delay many predict the Abbott government will introduce as a result of its current RET Review process, BNEF predicts there will be even more large-scale solar in the mix, given more time for the solar advantage to grow.

BNEF says that the price of large scale certificates for a solar plant in Queensland would need only to around $23/MWh for them to be viable, whereas wind projects in NSW might need prices of more than $40/MWh. This echoes the conclusions of our report earlier this week that the current market may be as good as it gets for wind energy in Australia.

The Queensland market, one of the few states where BNEF expects electricity load to grow – particularly at peaks times – plays into the hands of solar nicely, said Bhavnagri.

“We expect some large-scale solar PV to built from 2020-2030 to help meet Australia’s rising demand at summertime” – a jump in peak demand that will be driven by increasing uptake of air conditioners.

Overall, BNEF says that renewable energy may account for 49 per cent of total capacity in Australia by 2030, and about 33 per cent by generation.

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  • Colin Nicholson

    23GW is 30 terrawatt per annum – maybe 18% of australias consumption – just not enough

    • Miles Harding

      Don’t worry about that.
      By then, the economy may well be so rotten that 23GW makes a much larger dent in the total consumption.

      If the Club or Rome’s modelling is to be believed, we will be in the midst of the recession with no bottom and no escape. This is the other elephant in the room.

      If we can’t get our pollies to start addressing climate change, what hope is there for addressing major resource depletion and collapse?

      • Motorshack

        I agree. The problem the politicians are failing to solve is not even the right problem.

        To be sure, climate change is a huge problem, and certainly needs to be addressed because all by itself it is a civilization killer, but it is still only one factor in the much larger problem of biodiversity loss, which will probably still kill us, even if we manage to dodge the bullet on climate change.

        That is to say, climate change is only one of the many ways that we are wrecking the planetary ecosystem, and, no matter what we do on climate change, that larger destructive process will eventually leave us without a food supply.

        Most people hear the word biodiversity and they assume it is just some inconsequential, abstract notion that only “impractical” ivory tower types worry about. However loss of biodiversity is actually a direct threat to the food on our kitchen tables.

        If you want to see how bad things really are then skip The Limits To Growth and go straight to The Forgotten Pollinators.

        The short version: no pollinators, no crops.

        So, good fucking luck to one and all.

        • wideEyedPupil

          Feeding people isn’t so hard. We massively overproduce and deplete in ag because meat. If we were not using chemical farming and switched on mass to biological farming we could turn the tide, not withstanding climate change. The biggest single radical improvement would be a switch to veganism. 50 % of AUS GHG emissions using GWP20 come from land use associated with livestock production (enteric fermentation, land clearing & savanna burning).

          • Motorshack

            Yes, I get all that. I’m a pretty strict vegetarian myself, and I was once married to an organic farmer, so I agree that there is much that could be improved about agriculture per se, and that it would make a big difference.

            All other things being equal.

            The problem is still that we are wiping out large numbers of species as a side-effect of our industrial activities – habitat loss, industrial pollution, etc – and among those losses are increasing numbers of pollinators. Lose those and it won’t matter what farming methods you use, because the plants will neither fruit nor produce seed for the next year.

            We are also rapidly running out of both water and arable land, in that water tables are sinking at incredible rates, and also land is turning to desert at equally horrendous rates. About FORTY percent of all arable land has turned to desert in just the last thirty years, and the rate is increasing.

            When was the last time that you heard any national politician talk about such issues? I’m guessing probably never.

            I say again, we are quite likely totally screwed.

  • Ronald Brakels

    Rooftop solar certainly looks set to continue to expand at a rapid pace. However, I’m not sure people would want to invest considerable amounts of money in utility scale solar for if rooftop solar continues to expand because it is going to greatly depress daytime electricity prices. While utility scale solar farms will allow for a little increased geographical dispersal, that’s not going to have a very large effect on their bottom line. Utility scale solar may require some government support to go ahead, and while we are certain in the future to get a government that doesn’t consist of cowards scared to face reality, direct support of utility scale solar may not be the path they take to reduce CO2 emissions.

    • juxx0r

      I agree Ronald. Utility scale solar is only going to generate when everyone else is generating their own and some excess. As soon as the public on large realise that the cheapest power for the consumer is solar there’ll be a tsunami of solar installations. As of today’s budget in WA, solar just got an extra 1.3c cheaper than grid power. That’s an extra 7.5% cheaper than grid, now making unsubsidised solar 140% cheaper than grid come July 1. Or to look at it the other way, it’s 42% of the price; or a 58% discount to grid power.

      • Ronald Brakels

        Just how cheap it is depends on the discount rate used and how much electricity people self consume, but rooftop solar is clearly much cheaper than grid electricity across Australia including Tasmania.

        • juxx0r

          Yep. I used a discount rate equivalent to my mortgage (5.14%) and 70% own consumption with a 8c FiT.

          • Ronald Brakels

            Got you. A lot of people aren’t going to self consume 70%, but if we keep everything else the same, with a $2 a watt install they’ll still be ahead even if they self consume only one third of their solar electricity.

          • Ronald Brakels

            And I see the average install cost is now $1.98 a watt for a 3 kilowatt system and $1.72 for a 5 kilowatt system.

          • Bob_Wallace

            Where?

            (I want to update my “Why aren’t we as cheap as the UK, Germany and Australia?” database. We as in US.)

          • Ronald Brakels

            The Solar Choice PV Price Index for May is out:

            http://www.solarchoice.net.au/blog/solar-pv-power-system-prices-may-2014-sydney-perth

            At today’s exchange rate we are installing 5 kilowatt rooftop solar for an average price of $1.63 US a watt. The cheapest install was done for $1.06 US a watt. Our Renewable Energy Target reduces the cost of installations by about 63 US cents a watt, so without that the average cost of a 5 kilowatt system would be about $2.26 US a watt and the cheapest install would be $1.69 US a watt.

          • Bob_Wallace

            Thanks.

            $1.69/W. That’s sweet.

          • Ronald Brakels

            Yep, if they took away the Renewable Energy Target subsidy it would throw real live people out of real live work and in a stochastic sense kill people, but it would not kill rooftop solar in Australia. It would perservere.

            I would mention something about them taking away feed in tariffs, but not much left there.

          • Ronald Brakels

            I guess I should mention there is 10% Goods and Services Tax (GST) in Australia. If you remove that it would drop the averge installed price to about $1.40 US a watt, or $2.02 US a watt without the Renewable Energy Target subsidy.