Australia’s rooftop solar is doing the heavy lifting in the fight against rising power bills and charting the net-zero course as large-scale renewable energy investment slows, writes Clean Energy Council chief executive Kane Thornton.
Australia has been a world leader in rooftop solar for years. We have the highest solar radiation per square metre of any continent so there is an enormous opportunity to harness that energy for the nation’s clean energy transition. The Clean Energy Council’s “Clean Energy Australia 2023” report shows rooftop solar installations are already leading the way.
However, the findings of the Clean Energy Council’s “Renewable Projects Quarterly Report” for Q1 2023 make for sobering reading. They show that levels of investment in utility scale wind and solar have slowed dramatically.
While larger utility scale projects under construction equated to $1.3 billion in value in Q1 2023 – nearly double the volume from the same point in Q1 2022 – no new large-scale renewable generation projects reached financial close during this period.
The number of projects reaching financial close is a leading indicator for the renewable energy pipeline, and it’s worrying to see the figures significantly drop. Hopefully this is a one-off and not a trend.
Investment in large-scale clean energy projects has slowed at a time when it needs to accelerate. Even at 2022 levels of investment, Australia was not installing new capacity quickly enough to reach its stated target of 82 per cent renewable energy by 2030 so these financial results are concerning.
Rooftop solar and batteries filling the void
While we work to resolve the headwinds and blockages facing the large-scale sector, rooftop solar and batteries can play a key role in leading the transition. As revealed in the “Clean Energy Australia 2023” report, rooftop solar accounted for 25.8 per cent of Australia’s renewable energy generation in 2022 – its highest level yet.
Predictions in the latest Integrated Systems Plan publication from the Australian Energy Market Operator suggest that by 2050, more than half of homes in the National Electricity Market are likely to have rooftop PV systems, totalling 69GW capacity. Distributed storage will complement that generation significantly, representing almost three-quarters of dispatchable capacity in megawatt terms by 2050.
Australia has an opportunity to double down on rooftop solar and battery storage. With power prices still high, driven by the country’s reliance on fossil fuel generation, it not only makes environmental sense for consumers to switch to clean energy but financial sense.
Latest figures from the Clean Energy Regulator in its “Quarterly Carbon Market Report” show the payback period for solar PV systems – the point after which the amount saved on your bill outweighs system installation cost – has been trending downwards during the past six years, aided by component price reductions and improved installation efficiency.
While COVID-19 and associated supply chain issues caused a blip in this trend, increasing energy prices driven by higher wholesale costs have seen the payback period continue to decline, making rooftop solar increasingly attractive to consumers.
Enhancing the Small-scale Renewable Energy Scheme (SRES) could be a way to accelerate the uptake of rooftop-scale generation and storage. Given the falling cost of rooftop PV and expected decreases in batteries, expanding SRES could be a low-cost policy lever providing major payback.
We know SRES works. Along with the Renewable Energy Target, no policy has delivered as much abatement, given as much certainty, and unlocked as much investment as SRES.
One option could be to extend SRES beyond 2030. It could also be expanded to cover small-scale battery installations, which could help consumers take direct action to keep down bills. It benefits other customers, too, as batteries do a lot to keep network costs down, which ultimately flows back to all consumers in the form of lower bills.
These policy approaches could be introduced quickly, and there’s reason to believe the benefits would far outweigh associated costs.
More work needs to be done to explore what an expanded SRES might look like. However, we think it shows real promise as a way to accelerate the transition and lower consumer bills.
In the meantime, as an industry, we need to focus on how we can push the market forward through regulatory reform. Priorities to help the distributed energy resources (DER) sector grow could include:
- A clear handover of accountability of the DER Implementation Plan from the Energy Security Board to the newly formed Energy Advisory Panel.
- Establishment of a National Technical Standards body that leads a consistent oversight of standards.
- Development of market and price signals that reward owners of rooftop solar and batteries for using their stored energy to provide system-wide services.
The myCEC program is another way the Clean Energy Council is supporting the rooftop solar and battery industry. It offers access to our technical support and resources to help raise standards across the sector.
We launched myCEC in June 2023 for no cost to all Clean Energy Council-accredited installers and designers for an initial period of seven months. The launch coincided with the release of a subscription-based service, opening the same information to everyone across the industry. Once we know the result of the Clean Energy Regulator’s accreditation provider tender, we will share further details on how this affects accreditation and myCEC.
The myCEC platform provides expert support from industry veterans; assistance with standards and requirements; the ability to supercharge skills through deep dives and learning resources; and business essentials such as discounts and benefits.
Now, more than ever, the industry needs technical advice to ensure it is well equipped for the complex regulations, standards and technologies that will continue to shift in the coming years. By supporting the rooftop solar and battery industry, we are guiding Australia’s clean energy transformation, which must continue irrespective of the performance of the large-scale sector.
While we hope and believe large-scale investment will pick up again, we should be doing all we can to support Australia’s world-leading rooftop solar and battery industry in the meantime.