Rooftop solar economics “outstanding” in Australia, even as module prices creep up

Despite Australia’s continued strength as a global solar energy leader, the Australian PV market contracted somewhat in 2022 and saw an increase in the cost of residential systems.

The International Energy Agency’s (IEA) Photovoltaic Power Systems Programme (PVPS) published its annual report late last month in which it outlined the latest figures and technology research and best practices.

Australia remained the world leader in terms of solar per person, beating out the Netherlands and Germany, though it was unsurprisingly lower on the list in terms of total solar PV capacity added.

According to the report, there was a noticeable “pull back” in the Australian PV market, with 4GW of solar installed through the year, compared to 5GW in 2021.

Worth noting, of course, is that 2021 followed the lockdown-heavy COVID-19 restrictions of 2020, which likely saw the completion of a number of projects pushed into 2021.

The average system size in Australia’s sub-100kW market grew to over 9kW per system. This, according to the IEA PVPS report, reflects “both the growth in commercial installations, and the growth in the typical size of residential systems, as householders prepare their homes for future addition of batteries and electric vehicles.”

However, the average price of residential solar PV systems increased in 2022 to more than $A1.10 per Watt after subsidies, or around $A1.55 per Watt without a subsidy.

In 2021, the average solar PV system price had continued to decline, coming in at less than $A1 per Watt after subsidies, or around $A1.50 per Watt without subsidy.

The IEA PVPS expects rooftop solar to stabilise in 2023 “with some growth in commercial and industrial installations.”

The economic fundamentals for both residential and commercial PV are described as both being “outstanding” and the report concludes that “Australia’s high electricity prices and inexpensive PV systems means payback can commonly be achieved in 3-5 years.”