Australian solar capacity now 6GW, to double again by 2020 | RenewEconomy

Australian solar capacity now 6GW, to double again by 2020

Solar power capacity has reached 6GW in Australia, but it is just the start, with numbers expected to double by 2020 and rise ten-fold by 2040 as solar becomes the dominant provider of electricity in Australia – and potentially an export fuel as well.

Solar panels can be both a headache and an opportunity for network companies. AAP Image/Tracey Nearmy

Australia’s total solar power capacity has reached 6GW and is expected to double over the next few years as Australian households continue to invest in rooftop panels to reduce electricity bills, and the large-scale solar sector takes off after years of promise.

The latest industry analysis on installed capacity – released by the Australian Photovoltaic Institute – shows that rooftop solar capacity has now reached 5.6GW and large-scale solar capacity is now at 496MW, and growing fast.

sunwiz australia statsThe leading state in rooftop solar remains Queensland, with 1.72GW of rooftop solar – that makes it, as we reported here, bigger than the state’s largest coal generator. NSW and Victoria also have more than 1GW of rooftop solar capacity, with South Australia having the highest penetration (32 per cent) among residential dwellings.

As of April 2017, there was a total of 1.67 million PV installations in Australia, covering 21 per cent of suitable rooftops, which is the highest penetration of rooftop solar in the world. In total, these solar installations collectively generate 8,400 gigawatt hours of electricity each year, which meets approximately 3.3 per cent of Australian demand.

The data suggests that the rate of installation of rooftop solar is also accelerating. After establishing a record March quarter, the rate of installations for the year to date is up significantly in all the major states.

Interestingly, the biggest growth is coming from Western Australia, which has installed 43MW so far this year, outstripping Victoria, as locals prepare for the likely imminent removal of the state-based subsidy that has hidden the true cost of electricity from consumers.

The subsidy accounts for around one-third of the cost of power, and the new Labor government has flagged its removal to help it address the state’s soaring budget deficit. That is likely to make rooftop solar even more attractive – which explains the 71 per cent jump in installations so far this year.

The Sunwiz data – sourced from the Clean Energy Regulator – also highlights the solar hotspots in Australia, including the towns and suburbs where households without rooftop solar are in the minority.

For example, two-thirds of all households in Baldivis in Western Australia and Elimbah in Queensland now have rooftop solar. (See our story here on sister site One Step Off The Grid).

“With batteries now readily available on the market, many people are taking this opportunity to install both solar and batteries – or to upgrade the size of their existing solar systems,” says Sunwiz analyst Warwick Johnston. “The price of solar has dropped low enough, and power prices are rising high enough, for this to make economic sense for many commercial operators, too.”

APVI chair Dr Renate Egan said Australian homeowners, commercial businesses and large-scale solar farms had all contributed to an extra 1GW of solar being added to the grid over the past year.

“Solar power now makes up 11 percent of our country’s total electricity generation capacity with more solar added to the system in 2016 than any other fuel type,” Egan said in a statement.

bloomberg solar ret forecasts

By 2020, the total is expected to double again, with Sunwiz forecasting at least 800MW of rooftop solar to be installed this year and following years, and Bloomberg New Energy Finance forecasting more than 3,000MW of large scale solar to meet the legislated renewable energy target as solar matches wind power on costs (see graph above).

australia solar forecastsBy 2040, the amount of solar capacity could have risen 10-fold from its current levels. BNEF, as this graph to the right illustrates, is predicting 33GW of rooftop solar and 27GW of large-scale solar as solar power becomes the primary source of electricity generation in Australia.

It could increase even further, if plans to create “solar export fuels”, using renewables such as solar and wind to create hydrogen and then “green ammonia” to supply Asian economies such as South Korea and Japan, hungry for clean fuels to replace imported coal and LNG.

In any case, by 2040 the nature of the grid will have changed dramatically, and will have become more “distributed” – as predicted by the new head of the Australian Energy Market Operator Audrey Zibelman.

The key features will be localised and flexible generation. Batteries – and BNEF predicts there will be at least 15GW of them – will provide a large amount of flexibility, but so too will other forms of flexible generation, including demand response.

Coal capacity might have reduced to just 5GW by that time, with gas also taking a role in delivering flexible generation, although this will largely depend on the future cost of batteries, with some already suggesting that the combined cost of large-scale solar and battery storage is already beating gas, and could be “well under” $100/MWh – and current wholesale electricity prices – within a few years.

Developers of large-scale solar projects already report fierce competition for power purchase agreements, with bidding under $70/MWh in some cases and heading towards $60/MWh.

Those developers that have the equity behind them, and access to low-cost finance, are choosing to go the “merchant” route, where they can tap into high wholesale electricity prices and – for a few years more at least – high prices for large scale renewable energy certificates.

Consumers – both household and business – are facing the opposite problem, landed with not just the increased costs of wholesale power, but the high price of transport (networks) and retail margins. Hence their huge interest in rooftop solar and storage.

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  1. George Darroch 4 years ago

    At what point does solar begin to become a must for the rental property market?

    • joono 4 years ago

      When the last member of the LNP has been strangled with the entrails of the last coal industry executive

    • Rod 4 years ago

      No real incentive for landlords unless storage and metering can enable selling direct to the tenant.
      I offered to put a 5kW system (no storage) on a property in exchange for a $10 increase in rent but the tenant wasn’t interested. Gas HWS, heater etc. and the fact they are out all day means lots of export for 6c. kWh but little benefit to the tenant.

      • Barri Mundee 4 years ago

        This is where apartment blocks might fare better- if the Body Corporate is prepared to install it and work out an arrangement that allows all parties to benefit?

        • Rod 4 years ago

          Agreed, all should benefit. The problem I see for apartment blocks is the lack of suitable real estate for mounting PV on.

      • Diego Matter 4 years ago

        Have you checked out
        They send a bill for self used PV production to the tenant for a kWh price that is usually 20% lower than retail.

        And Diamond Energy is paying 11cts/kWh exported. That in itself should pay for your 5kW system in a few years.

        PS. has nothing to do with me.

        • Rod 4 years ago

          Thanks for that. Looks promising,
          Coincidentally I was investigating Diamond energy today on another matter.
          Would love to hear any thoughts on either company from anyone?

          • Diego Matter 4 years ago

            Diamond Energy were very good. No problems so far. They pay the FIT automatically without intervention from the client (unlike Origin or Click for instance). They also provide 100% green electricity with an option to pay more per kWh for additional investments in renewable plants.

            I haven’t had any interaction with

  2. Chris 4 years ago

    In the last 2 months weve had 5 solar salesmen come past our house, been very pushy as well. On my suburbs residents page (4000 members) there have been lots of complains of abusive, extremely pushy solar salesmen in the area. And ive also noticed a sudden increase in solar on homes in the area.
    My elderly neighbours were signed up for a $11,000 3KW system for god sakes, I made them cancel it right away (still in the cooling off period), their quarterly bill is only $120, theyll probably not even live to have that paid off….
    Id really like to see figures nation wide if it werent for such dodgy practice! As a lot of people ive spoken to who have gotten solar in the last year with the low FIT arent happy with their savings and were misled by their sales rep…

    • Joe 4 years ago

      Chris, sadly there are shonks and spivs in every industry. People do need to take the time and do some research of their own before being ‘sold’ anything.
      The lesson to learn is NEVER entertain a door to door salesman….nothing good comes of it.

      • Joe 4 years ago

        Also, just recently there was a case of false advertising in Sydney newspapers of package offers for LG Chem Battery and Solar at an unbelievable low price. LG Chem were onto quickly to advise that it was nothing to do with the “official” LG Chem company. Shonks and spivs at it again on the back of a reputable company.

  3. trackdaze 4 years ago

    This is what happens Abbott, Turnbull,Frydenberg et al when you try to stand in the way of progress.

    In psych terms it’s called Reactance. This won’t pass the pub test so lets just call it the boomerang effect or at the cafe inverse consequence.

  4. Just_Chris 4 years ago

    Is there a running sweep stake going for when we will see the first day of zero demand in a state in Australia. My money is on South Australia, 2019 – AEMO have the minimum at around 500 MW in that time but I reckon solar adoption will increase and that something bad will happen in the network on a sunny Sunday that year. I would like to think that there is a plan to ensure that we are ready for such an event but I suspect not. It will be interesting to see what happens if that day comes and the market operator insists that 2 gas generators stay running at around 200 MW.

    • Rod 4 years ago

      Not SA anytime soon. There was always some FF spinning reserve but now the Govt. and AEMO directives mean wind will be throttled if the interconnector is maxed out.

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