Australian solar is booming and the industry is only getting stronger as the nation embraces renewables, writes Clean Energy Regulator chair David Parker.
At the heart of the nation’s renewables transition you’ll find everyday Australians choosing to install rooftop solar. At an average rate of one in three homes having solar, we’re leading the world.
Our increasingly electrified lifestyles are creating enormous demand for electricity, which is only set to increase.
Solar industry is strong and growing
It is shaping up to be a record year in 2023 as Australian households and businesses push ahead in their adoption of small-scale rooftop solar.
The Clean Energy Regulator’s December 2022 Q4 Quarterly Carbon Market Report (QCMR) showed rooftop PV investment rebounded strongly in the second half of the year with almost 315,000 systems being installed. These systems have added an additional 2.8GW of renewable energy capacity – the third highest annual capacity installed on record.
In 2023, the average payback period on a PV system is less than four years, continuing a trend that started in 2019. A combination of factors including increased competition, efficiency gains in the manufacturing and installation of solar, and increasing energy costs have seen payback periods remain low.
As businesses seek to manage cost pressures from high energy prices, it’s likely commercial demand for small-scale solar will also increase throughout 2023. Last year, while only five per cent of all Small-scale Renewable Energy Scheme (SRES) installations were commercial and industrial – systems greater than 15kW – they contributed 18 per cent of total additional installed capacity. I believe there is significant untapped potential for commercial solar installations, and opportunities for savvy solar installers in this market.
In 2022, Australia averaged 35 per cent renewable energy across all our grids and on that trend, 2023 looks set to reach or exceed the record 3.2GW installed capacity of 2021. On this current trajectory, we expect Australia will be at 50 per cent renewables by 2026, which puts us on track to potentially reach the government’s target of 82 per cent renewables by 2030 if other required transition issues can be addressed.
Opportunities for non-traditional dwellings
While Australian homeowners may be world leaders in rooftop solar, not every property is suitable for a variety of reasons, including how energy is metred. However, we are seeing innovative business models emerging.
Last year, the Australian Government announced $200 million in grant funding for the development of solar banks and community batteries which have the potential to help people living in high density apartments. Depending on the type of building, the benefits can be for tenants or owners through reduced common costs (usually covered by strata levies). Additionally, extra power on the common area meter can be useful for electric vehicle charging.
There are also emerging opportunities for people living in public housing to access affordable solar.
In Victoria, there’s been a push by the Victorian Public Tenants Association (VPTA) to install solar panels on every public housing property. In its state budget submission, the VPTA estimates 23,500 existing public housing properties are suitable for installation of rooftop solar panels.
The Australian Government’s community batteries policy and grant funding are well underway and ongoing announcements by states and territories will also be instrumental in supporting our small-scale growth throughout 2023.
Integrity is essential
The Phase 2 regulations, Renewable Energy (Electricity) Regulations 2001, that passed into law in 2022 have provided the Clean Energy Regulator with additional powers to declare non-compliant industry participants ineligible to participate in SRES. This includes installers, designers, retailers and component manufacturers.
Participants see the changes as a means of strengthening integrity, not just for small-scale technology certificates (STC) claims, but for improved installation of approved solar products and consumers getting what they paid for.
The Clean Energy Regulator has been actively providing industry with education and communication on various compliance matters across SRES. Levels of compliance are high, but we’ve also seen cases of wilful fraud. The Clean Energy Regulator takes a zero-tolerance approach to fraudulent behaviour and was instrumental in prosecuting a number of these cases in 2022, with more in the pipeline this year.
The Clean Energy Regulator remains committed to working collaboratively with all levels of government, industry and stakeholders to support the integrity of solar schemes by ensuring our regulation is effective, efficient and transparent.
Everyday Australians and businesses have done what no other country has done and we’re on a fast trajectory. The Australian Government is supporting this by providing significant investment in the renewables transition, underpinned by a robust regulatory framework.
The Clean Energy Regulator has worked with industry to make compliance easier and to ensure non-compliance is difficult because the industry has to be trusted by its clients or the great transition to renewables will be that much harder.