Comment, Renewables

The time to act is now in Australia’s energy transition

Australia’s future is clean energy and now is the time to make it happen, writes Clean Energy Regulator chair David Parker.

Australia is in the midst of an energy transition. As the nation moves towards a decarbonised future, it is clear switching to renewable energy sources is a pivotal component of the journey.

I want you to cast your mind to what the future Australian household may look like.

It will have solar panels and a battery, or draw power from neighbours who do. Electric vehicles and charging access will be common, and the all-electric household will heat and cool with energy efficient air source heat pumps.

The average house will have power circuits upgraded from single phase to three-phase power supplies, with all these systems integrated using smart technology, software and grid connections. It won’t be an average house from a decade ago with just solar on the roof; there will be more renewables brought into the mix and the average system size will keep growing.

The local wires or distribution system will be different, too. It will be a distribution and collection system, with the distinction between it and the transmission system becoming fuzzier.

Early adopters of this vision are already out there, but increasingly it will become the norm. I suspect industry participants who see this household transformation as a tide rather than specific or separate opportunities will be the ones who prosper.

Solar installations on the rise

It is great to see the rate of rooftop solar installations back on the rise in September 2022’s Quarterly Carbon Market Report (QCMR), with an estimated 729MW of small-scale solar capacity installed in the quarter. This was almost back to the records of 2021’s third quarter, and is a strong increase on the first half of 2022, which was slower after the COVID-19 renovation boom.

The QCMR is a report the Clean Energy Regulator publishes, and it is a leading source of data and information on Australia’s carbon markets, delivering key insights into Australia’s uptake of renewable energy.

Australians love solar and this is reflected as we lead the international community in its uptake. We have the highest coverage of solar in the world, with approximately 3.3 million solar systems installed as of November 2022. This means one-in-three suitable households have solar systems, although that is far from saturation.

In 2022, more solar systems were installed with batteries than previous years, with data suggesting 18 per cent of solar systems sold in June included battery storage.

It is also pleasing to note that installations of air source heat pumps have increased significantly, with 23,000 units installed in the third quarter alone. This is compared to an average of 17,000 units per year for much of the past decade.

We’re predicting rooftop solar uptake will also strengthen into 2023.

Businesses leading the way

Companies such as Woolworths, Coles, Bunnings and Ikea are all taking important strides in the solar installation space. Woolworths unveiled its 150th supermarket solar installation in early 2022, and Coles aims to be fully renewable by the end of June 2025.

Australia’s biggest companies can play an important role in leading the nation towards the Australian Government’s 2030 and 2050 emissions targets, while encouraging the uptake of cleaner energy sources.

Further opportunity for industry

As households and businesses make the energy transition, I want to discuss what this brings to the table for industry.

The move to clean energy presents the renewable energy installation industry with the opportunity for repeat business. Renewable energy system providers will not only be doing one-off installations of systems for households and businesses, but can upgrade, replace and maintain them. They can also add batteries, install electric vehicle charging, replace water heating and air-conditioning when it breaks, and provide households with a multi-year upgrade program.

There are opportunities to develop a strong customer loyalty business model as households and businesses install and upgrade their renewable energy equipment over time. Similarly, there are opportunities to develop pathways to progressively decarbonise that can be tailored to individual budgets and timeframes.

Moving to renewable energy will bring forward many business opportunities for savvy operators.

What’s in it for consumers?

There are strong incentives in place for consumers. The March 2022 QCMR made it clear the Australian rooftop solar sector is highly competitive, innovative and resilient.

The report showcased the payback period for an average 8kW system is between three and four years. While this is dependent on factors such as location and electricity usage, moving to solar represents a very good return on investment for households and businesses.

Innovations in solar technology have made installations easier than ever, with solar panels becoming lighter. Innovations will continue to simplify the installation of solar systems.

Financial incentives

Eligible small-scale renewable energy systems can claim small-scale technology certificates (STCs) under the Clean Energy Regulator’s Small-Scale Renewable Energy Scheme.

STCs bring a financial incentive to the table, with one STC equal to one megawatt hour of renewable electricity, either generated or displaced by eligible renewable systems. Eligible systems include solar, wind, hydro, solar water heaters and air source heat pumps.

The number of STCs created is dependent on factors such as geographic location, date of installation and the amount of electricity generated or displaced in megawatt hours.

When an STC has been created and registered by the Clean Energy Regulator, it acts as a form of currency and is either sold to reimburse part of the installation cost or can be transferred – at an agreed price – to an individual or organisation.

State and local governments also have incentives to help cover the costs associated with solar installations. For example, Victoria offers financial incentives for solar panel and battery installations. EcoGeneration readers should research what incentives are available in their state or territory.

I encourage individuals and businesses to do their research and put serious thought into their energy transition as Australia moves to a decarbonised future.

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