Finally, cause to celebrate. And now that everyone isn’t manically installing, there’s also some time to celebrate.

The magic million certainly provided headlines, the problem is that the PV industry is in a state of noticeable contraction, and that the next million systems will come at a much slower rate.

Paradoxically, it was the reduction and removal of policy incentives that were the greatest drivers of buying behaviour, and now that there’s some policy stability (which is actually a policy vacuum), people aren’t rushing to make purchases.

When they do, they are buying larger systems because the distorting effect of the solar multiplier has been removed (and because panel prices have fallen so far) – indeed record-high average system sizes occurred in every state in the four months.

But customer numbers, overall sales volumes, and total revenue are down for almost all solar companies. There are plenty of applicants for feed-in tariffs in Queensland that are still sitting on their hands. This just means its hard to make a buck in PV at the moment, and plenty of Australian PV retailers are winding up.

The celebration of one million solar systems may be followed by a hangover that has all the atmosphere of a funeral wake.

The latest Solar Hot Spots data (graphed above; note that recent month’s data is very incomplete) shows the December mini-boom brought more Victorians out of the woodwork, somewhat unexpectedly given incentive reductions had occurred three and six months previously.

There was even a small upwards blip in Queensland (where 44c Feed-in Tariff installations now represent less than 25% of new installations). And while the data since December is far from complete, we can clearly see an underlying market that is stable and has volume comparable to previous periods that fell between surges driven by incentive reductions.

But while a stable underlying market will support many companies, most industry profits came from the peaks, meaning there will be some pain in the year ahead.

A minor cause for celebration is that some industry stalwarts have ridden out the wave, outlasted the competition, and are now climbing through the ranks. Congratulations in particular to Springers Solar and the Environment Shop.

Market Synopsis

PV Market

• March saw 75MW of PV registered across Australia, a similar figure to the previous four months
• Though Queensland is rapidly shrinking, three quarters of Queensland installations are now post-Solar Bonus Scheme.
• 3kW systems have made a resurgence, and are the most popular sized systems in WA and NSW.
• Our Insights Premium service allows interactive identification of companies experiencing growth, and those whose activity is declining.

STC Market

• The STC target was higher than the market anticipated, which led to a quick uplift in STC price.
• We are mid way through the Q1 surrender period, and only half the required volume has been surrendered.
• Last week was the biggest week ever for STC trading (when account-shifting trades are excluded). Many Liable Entities are scrambling to source their required volume
• The weekly and monthly STC creation tally are displayed on our website – check in regularly.

Solar Hot Spots

Now there’s no solar multiplier, where should you target your sales? This information could help:

• The Top 10 Postcodes for installation volume in 2012 were from Queensland. Within the top 30 postcodes for installation volume in 2012, only 5 were outside of Queensland
• Bundaberg topped the list with at least 9.35MW installed in 2012. Warwick Farm was NSW’s top spot (2.1MW), Happy Valley was SA’s (2.9MW), Hoppers Crossing topped Victoria (4.3MW), and Mandarah was #1 in WA (4.2MW)
• Parkes (NSW) has to be one of the most interesting hot spots – unresponsive to the 3>2 multiplier reduction but setting records in Q1 2013.

Warwick Johnston is director of Sunwiz, a leading industry analyst and consulting firm. Further income can be found here.