The Australian solar market displayed significant regional variations in the first quarter of 2025, with some states demonstrating remarkable growth while others faced substantial declines.
According to the latest statistics from the Solar Nerds, the nationwide installation volume reached 763,320 kW across 73,606 systems during Q1 2025, representing a modest decline of 2.47 per cent compared to the same period last year.
Contrasting regional performance: SA surges while NT stumbles
The most striking aspect of the Q1 2025 data is the stark contrast in year-over-year performance across different states and territories.
South Australia emerged as the standout performer with an impressive 20.41 per cent growth compared to Q1 2024, installing 69,449 kW across 6434 systems. This growth is particularly notable considering the overall national decline.
Western Australia and Tasmania also bucked the national trend, recording solid growth of 7.83 per cent and 4.37 per cent respectively. Queensland maintained positive momentum with a 2.29 per cent increase, while Victoria remained relatively stable with marginal growth of 0.6 per cent.
In stark contrast, the Australian Capital Territory, New South Wales, and the Northern Territory all experienced significant downturns:
- ACT: -14.69 per cent (12,311 kW)
- NSW: -14.95 per cent (224,938 kW)
- NT: -19.58 per cent(3320 kW)
This regional divergence suggests localised factors—potentially including state-specific incentives, economic conditions, and market saturation levels—are playing an increasingly important role in Australia’s solar adoption landscape.
Northern Territory’s unique installation profile
The Northern Territory stands out dramatically in system size distribution, deviating significantly from national patterns. While the national market is dominated by small residential systems (0-15 kW), which account for 75 per cent of installations, NT’s profile is markedly different:
- Small systems (0-15 kW): Only 38 per cent of NT installations (vs. national average of 70.5 per cent)
- Medium systems (15-40 kW): 34 per cent of NT installations (vs. national average of 17.6 per cent)
- Large systems (40+ kW): 28 per cent of NT installations (vs. national average of 11.9 per cent)
This unique distribution pattern has resulted in NT having the largest average system size nationwide at 20.24 kW per installation — nearly double the national average.
The territory’s focus on medium and large systems suggests a market driven more by commercial and industrial applications rather than residential adoption.
Western Australia represents the opposite end of the spectrum, with 81 per cent of installations falling in the small system category, resulting in the lowest average system size nationally at 8.41 kW.
Is system size connected to market growth?
Intriguingly, our analysis reveals a potential correlation between system size distribution and market growth. Regions with the highest proportion of large systems (40+ kW) appear to be experiencing the most significant market contractions:
- NT: 28 per cent large systems, -19.58 per cent YoY growth
- NSW: 11 per cent large systems, -14.95 per cent YoY growth
- ACT: 10 per cent large systems, -14.69 per cent YoY growth
Conversely, South Australia, with the lowest proportion of large systems at 8 per cent, achieved the highest growth rate at 20.41 per cent.
This pattern raises questions about whether the commercial sector is facing greater challenges in the current economic environment compared to the residential market.
Market concentration and competitive dynamics
The competitive landscape varies significantly across states, with Western Australia showing the highest market concentration. In WA, the top five retailers command 19.69 per cent of the market, led by Perth Solar Force with a 6.02 per cent share.
Queensland follows closely with 17.94 per cent market share held by its top five retailers, while South Australia (17.04 per cent), Victoria (14.10 per cent), and New South Wales (13.73 per cent) show progressively less concentration among leading companies.
The national retail landscape continues to be dominated by familiar players, with Origin Energy maintaining leadership positions in several state markets.
However, regional specialists like Perth Solar Force in WA and Solar Wholesalers in SA demonstrate that local expertise remains competitive against national brands.
Outlook and implications
The Q1 2025 data paints a picture of a maturing yet increasingly fragmented solar market in Australia. The pronounced regional variations suggest that the “one size fits all” approach to solar deployment is becoming less relevant, with state-specific factors increasingly determining market outcomes.
For industry stakeholders, these trends highlight the importance of tailored strategies that account for the unique characteristics of each state market—from system size preferences to competitive dynamics and growth trajectories.
The correlation between large system proportion and market contraction also warrants attention. If this pattern continues, it may indicate structural challenges in the commercial solar sector that could require policy intervention or business model innovation to address.
As the Australian solar market continues to evolve, understanding these regional nuances will be crucial for installers, manufacturers, financiers, and policymakers seeking to support the ongoing energy transition.
For more details, visit solarisfinance.com.au
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