Annual installations of solar PV in 2006 rose by 20 per cent compared with 2005 - a total of 9.4 megawatts (MW) in 2006, up from 7.9 MW in 2005, according to the latest PV industry statistics. This steady growth in 2006 has brought total PV installations in Australia up to 69.4MW, while the annual growth rate over the last five years has averaged 17 per cent.

There are two key markets for PV in Australia – the ‘off grid’ market and the ‘grid-connect’ market and these exhibit different characteristics (see Figure 1). The off grid market has been the mainstay of the industry in Australia and includes stand-alone power systems that supply reliable electricity to Australia’s regional and remote communities. The off grid market, which competes with diesel for power generation, has grown steadily and consistently. Off grid installations have increased by an annual average of 13 per cent over the last five years (16 per cent in 2006).

The grid-connect market, as the name implies, represents PV power systems installed on homes, offices and factories in urban communities where grid electricity is available. This market has grown strongly, increasing at an average annual rate of 39 per cent over the last five years (38 per cent during 2006). As Figure 1 illustrates the grid-connect market has been quite volatile, suffering from uncertainty about Government programs and the ‘on-again, off-again’ nature of support for PV.

Total PV industry sales for 2006 were estimated to be $324 million, an increase of 16 per cent compared to 2005. Exports in 2006 were $135 million, similar to 2005 levels. Figure 2 summarises industry sales over the last six years.

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Domestic sales of PV amounted to $189 million, a 27 per cent increase on the previous year’s levels. Domestic sales rose at a higher rate than installations, which reflects a slight increase in the average price of installations. This was largely due to higher global prices for PV modules as a result of the silicon shortage. This situation is currently rectifying itself and considerable new capacity is starting to come online.

The future for solar PV in Australia

Although Australia’s industry has been growing at 17 per cent a year over the last five years or so, it is still falling behind the rest of the world. The global industry has been growing at about 40 per cent over the same time frame.

The recently announced initiatives (see articles on page 10 and 22) will be important in consolidating industry growth over the next few years.

The PV industry is looking for longer term certainty through an effective market-based program such as feed-in tariffs. This is required to provide industry with confidence to continue to invest over the longer term to build skills and local capacity in order to reduce costs.