Over the past 10 years Australia has witnessed a revolution, where the deep-blue rectangles that have popped up on suburban rooftops have quietly and cleanly upended the energy market.

“We’re driving the energy transition, and that’s catching the market, the regulators and the networks by surprise,” says Renate Egan, secretary of the Australian PV Institute. “They shouldn’t be surprised, because it’s been on trend for years – but they have been slow to act.”

The accelerating rise in solar energy has been captured in the latest APVI National Survey Report of PV Power Applications in Australia 2019, prepared for the International Energy Agency.

The survey is like reading the school report of a kid who showed a bit of potential at finger-painting in kindergarten but then surged ahead academically at an exponential rate to end up playing concert piano and programming a super computer by Year 10.

Here are a few highlights.

Epic achievement

The 4.1GW of solar built in 2019 makes up nearly a quarter of total capacity for Australia, at 16.3GW. That total, about 600W per person, puts us ahead of any other nation. By the end of 2019 there was more than 10 times as much solar installed than in 2011 and close to 100 times the 187MW installed at the end of 2009.

More than 2.3 million houses across the country are topped by solar modules, and the systems are growing more powerful. A rise in average residential system size from 1.4kW in 2009 to 8kW in 2019 has been aided by a more than 80% fall in cost from about $9/W to $1.60/W.

“I put my system on in 2008 and it was $10/W installed, after the subsidy,” says Egan, a professor at the University of NSW and co-founder and chair of energy monitoring company SolarAnalytics.

A rule of thumb says a 3kW PV system will deliver about half the average household’s electricity load. With average systems now nearing 8kW, the residential rooftop solar industry is convincing households they need to generate more than they can use (unless they buy a battery, which is still rare).

With the recent rapid rise in residential installations, most of the solar systems on Australian houses are relatively new. As the technology goes mainstream, consumers are becoming more savvy about what it can do. “There must be, just by the uptake, an increasing awareness of the benefits of solar,” Egan says. “Some of that comes with the fact that systems now usually come with a level of monitoring, so you get some feedback – and that’s getting better all the time.”

Economics 101

Panel efficiencies are improving and system designs can accommodate more challenging rooftops, with less-than-perfect orientation, and microinverter technologies will make allowances for shade. “But really the biggest driver is the combination of the drop in module pricing and the increasing electricity price pressures that have driven people to look for independence,” says Egan, who predicts the rooftop market will continue to grow in 2020, slow for the next couple of years and then it will be onwards and upwards once more.

It’s a different story for large-scale solar, where investor confidence has been knocked by connection delays and the impact of marginal loss factors. The large-scale sector will inevitably pick up again, she says. “Investors are aware it’s a good return on investment if you can get into a solar farm and get it connected, so the interest will be there when the regulatory environment settles down and enables connection and investment again.”

The states are showing the way, moving forward with ambitions plans for opening renewable energy zones to attract developers. “That will relieve some of the pressure,” she says. “And to be honest, the market doesn’t need much more of an incentive. All it needs is to have roadblocks removed.”

Learning by doing

Once a few roadblocks are removed the large-scale solar sector will return in force, says the APVI’s Renate Egan.

Australia is leading the world in distributed energy generation, and “we are learning by doing”, Egan says. “There has not been enough forward planning, so we are having to be reactive rather than proactive.” This has of course led to the various jurisdictions with the National Electricity Market working out their own responses to the challenges they each face. In the world of rooftop PV, where the APVI research shows penetration levels sometimes above 37%, some networks and retailers are offering less for exports and moving to remotely switch off inverters to enforce grid stability.

“I think tariffs that incentivise people to self-consume are a good idea,” Egan says, “and to trigger responses that help balance the network, such as deter large consumption when there is a known peak – those are all good measures. We have to get to an adaptive market that does that. We have to accept there is going to be some evolution in those tariffs and market reforms to allow for this widespread integration of distributed energy resources.”

There are now more than 27% of freestanding houses in Australia with rooftop solar installed, the report finds, with higher averages of 37% in Queensland and South Australia. By the middle of this year, APVI data shows 18.5GW capacity and 2.5 million installations.

The rooftop solar sector is a major employer, accounting for 13,070 full-time equivalent jobs. The large-scale solar sector, which took off with such force in 2018, accounts for 4,740 full-time equivalent jobs, and there are about 550 roles in solar research. The report claims the total value of solar businesses in Australia is around $7.6 billion, for an energy source that provides about 5.9% of total electricity demand.

The report was prepared as part of Australia’s engagement with the International Energy Agency. It contributes to the longest standing records for solar installed in Australia, going back to 1992, when there was a total of 7MW installed, all of it off-grid.