How Campbell Newman saved Australia's solar industry | RenewEconomy

How Campbell Newman saved Australia’s solar industry

Newman’s decision to slash solar feed-in tariffs caused a surge in demand that underpinned the Australia solar industry in 2012. But while the cost of installed systems fell sharply, and another 1,000MW is anticipated in 2013, significant barriers remain.


It sure didn’t look like it was intentional, but Campbell Newman’s decision to slash the feed-in-tariff on rooftop solar in Queensland in the middle of last year pretty much kept the whole solar PV industry afloat through to the end of 2012.

The Australian solar industry estimates that around 1,000MW (1GW) of rooftop solar was added in Australia, although the latest data on renewable energy certificates (known as STCs) compiled by Green Energy Trading suggests that it might have fallen short, at around 980MW. In all, some 337,000 systems will have been installed in 2012, at an estimated average system size of around 2.9kW.

It could have been much worse, following the removal of meaningful tariffs in NSW and Victoria, and the winding back of tariffs in South Australia and WA. But Newman’s decision to provide a month-long window to take advantage of the existing net tariff of 44c/kWh sparked a massive rush for rooftop solar in his state that is still providing solid work for installers, and a market for manufacturers.

As this graph from GEM shows, Queensland accounted for the single biggest contribution to the Australian solar PV market in 2012. In all, GEM estimates the national market at some 337,000 systems for the year, at an estimated average system size of around 2.9kW. Of that, Queensland accounted for 110,000 systems – just in the June/July window before the tariff was reduced. The state accounted for around 40 per cent of the market.

Screen Shot 2013-01-30 at 8.45.25 AMAnother way of looking at the data is on a pro-rata basis, based on population and available households. As this graph below shows, Queensland was way ahead of all other states, with the exception of South Australia, which has a phased wind-down of its tariffs.

Screen Shot 2013-01-30 at 8.45.55 AM

The GEM data comes as the Australian PV Association prepares to release its annual report, which estimated that the amount of solar PV installed in Australian nearly doubled in 2012 to more than 2GW, and that rate of installation is expected to remain pretty much steady through 2013.

The key to this prediction is the APVA’s estimate that the cost of solar PV modules has fallen from $2.10/Wp in 2011 to $1.30/Wp in 2012 – thanks to falling manufacturing costs and the high Australian dollar. The installed system price fell from around $A4/Wp to $3/Wp – suggesting that Australian households invested between $3 billion and $4 billion in their own energy production in the last 12 months – and penetration levels now average 10 per cent and have reached 20 per cent in some areas.

“At this price, and with continued increases in grid electricity prices due largely to network refurbishment and upgrades, PV is a very attractive option for homeowners in many parts of Australia and is of increasing interest to the commercial sector,” the APVA says.

There are, however, significant barriers that remain. The APVA notes installation restrictions are being imposed by electricity network operators in some areas to cope with potential issues arising from sudden changes in load due to cloud movements and to voltage rises in residential feeders.

“Changes are also needed to retail electricity market structures to accommodate new supply and demand options now available via PV and other distributed generation technologies, demand management, energy efficiency and storage. This is especially important where increased on-site generation is reducing revenue to pay for networks.”

The APVA also says the commercial sector – which it predicts should increase in 2013 in the normal course of events – is currently hampered by the lack of standardised procedures or rights to connect.

Australia over the past two years has been rates near the top in terms on installed capacity of small rooftop systems, and its penetration rate in households remains high. But on a per capita basis, it should be seen in some context, as this interesting table from Cleantechnica shows. Further detail can be found here.

Screen Shot 2013-01-30 at 9.11.51 AM

Part of the reason is the lack of development in Australia’s commercial and utility-scale solar sector. The country still has only one project of 10MW or more, and while Belectric has revealed plans for a 5MW project, and FRV will begin construction on a 20MW plant, and Solmessis hopes to build a plant of similar capacity in Queensland, the sector still remains largely dormant.

France, for instance, added 1.02GW of capacity this year, to take its cumulative total to 3.5GW, and Trina Solar even predicts that England will install 2GW of solar PV – mostly commercial and utility-scale – in 2013 alone. The government has a 20GW solar target for 2020.

This week, Ecuador announced it had commissioned US-based Atlantic wind to build 57MW of solar PV plants in remote regions. It is paying a high price of $400/MWh, around the same price Australian mining operations and remote communities pay for off-grid diesel power. Even Ethiopia has built its first 20MW manufacturing plant.

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  1. George Michaelson 8 years ago

    Surely this article has to be re-written in 2 years time, after massive contraction in the QLD PV industry? All Newman’s policy did was give a grace window for forward loading the backlog of orders. Once that runs out, doesn’t the contraction happen anyway?

  2. Barrie Harrop 8 years ago

    Depending on wind speed we would be way below $400 MWh with our hybrid solution if wind is proven above 6m per sec,then we are in the range of $250MWh with base load 24/7,above 7m per sec $200MWh, 8m per sec $180MWh
    For remote mining projects.

  3. Phil Clark 8 years ago

    That would have to go down in history as the single stupidest headline ever printed.

    The solar industry is dead, it just doesn’t know it’s stopped breathing yet!

    • Ronald Brak 8 years ago

      At its average installation cost, rooftop solar now produces electricity at about half the cost of grid electricity or less for most Australians and the cost of solar is still dropping. That’s not the sort of thing one tends to see in industries that are dead, so rumours of solar’s demise are much exagerated.

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