Fears about rising energy prices have driven consumers and businesses to install solar panels at the fastest rate in at least a decade, lifting total national capacity to the equivalent of powering a city the size of Melbourne.
New figures from the Australian Photovoltaic Institute show the country has passed 6 gigawatts of solar capacity as of the end of March, or enough to supply about 1.3 million households.
“There’s been just a huge surge recently on the back of the energy concerns earlier in the year,” Renate Egan, chair of the institute, told Fairfax Media.
Total capacity could top 7 gigawatts within a year with a host of solar farms and a rise in companies turning to solar driving the extra demand. That level would be the equivalent of about 1.5 million households’ supply, or about Sydney’s size.
t present, about 26 per cent of households have solar panels on their roofs but “there’s still plenty of rooftop capacity” available, Dr Egan said.
In the past year, the closure of coal-fired power plants in South Australia and Victoria and policy confusion at federal and state levels have contributed to a jump in wholesale electricity prices. Consumers will likely face power price increases of 10 per cent or more this year as those increases flow on to the retail sector.
Gas prices are likely to be rise even faster – prompting the Turnbull government to pledge an intervention to ensure domestic supplies are not at risk from higher exports – turning even more households to consider solar installation.
A surplus of production in China is likely to add to the downward pressure on solar module costs this year, Dr Egan said, adding that the equipment has become a relatively small part of total costs of systems.
Adding to solar’s allure is the tumbling price of batteries, making it more economic for consumers to capture surplus electricity generated from their roofs rather than export it at a small fraction of the cost of buying power from 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,” Warwick Johnston, managing director of consultancy SunWiz. “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.”
The rebound for solar PV reverses a “slow decline” in demand from households for solar that had been sparked by the slashing of government rebates and feed-in tariffs since 2011, said Tristan Edis, an analyst at Green Energy Markets.
“However they’re now surging as both households and businesses seek to insulate themselves from skyrocketing power prices driven by a tripling in gas prices,” Mr Edis said. “Numbers from the Clean Energy Regulator for last week represent the highest level of solar installations on record.”
The revival of interest in solar panels comes even as some in the fossil fuel industry have sought to blame renewable energy for rising electricity prices. Research for the Abbott government’s own Warburton review of the Renewable Energy Target found adding more clean energy supplies would place downward pressure on wholesale power prices.
NSW leads commercial solar gains
Commercial take-up of solar now accounts for 12.7 per cent of total capacity, with NSW leading the way, Dr Egan said. Households account for 79 per cent of solar capacity and solar farms 7.7 per cent – a total also set to leap as new plants get approved at a quickening pace.
The largest capacity share nationally is in Baldivis, south of Perth in Western Australia, with 69 per cent of the region’s dwellings taking up solar, the institute said.
Lismore leads in NSW with 28 per cent of households having solar energy, while Cranbourne is Victoria’s leader at 26 per cent, the data shows.
“The commercial rooftop space is still huge,” Dr Regan said, pointing to where growth of the sector is likely to be the fastest.