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Australia’s new solar capacity addition hit the highest on record, according to preliminary estimates from the Clean Energy Regulator, at 1.05 GW, Bloomberg reports. The country is among the frontrunners in solar power globally, with rising electricity prices proving a great motivator for utility clients to switch to solar.
According to Bloomberg New Energy Finance, electricity bills Down Under have been rising while the costs of residential-scale rooftop solar panels have been falling. As of last year, the average cost of residential solar power installations was less than US$1.20 (A$1.50) per Watt, after subsidy.
Australian solar panel makers have coal and gas suppliers to thank for the higher electricity bills that drove the record solar installation adoption. Coal and gas are used to generate the bulk of Australia’s electricity, and supply last year was tight, not least because of growing LNG exports, which in turn drove electricity prices higher.
A forecast from BNEF has suggested that Australia is on track to become the world’s leader in distributed electricity supply. It will overtake Germany in 2024, BNEF projects, with 21.7 percent of electricity capacity in the country being of the behind-the-meter sort, compared with 20.2 percent for Germany. By 2040, Australia will get 44.6 percent of its electricity from behind-the-meter installations, with Germany remaining a distant second with 33.6 percent. Rooftop installations will account for 24 percent of Australia’s total installed capacity by 2040.
Subsidies have doubtless had their role to play in the growing attractiveness of solar installations, but so has the falling cost of these installations. “The payback period for residential solar is now as low as it was in 2012, when super-generous feed-in tariffs and subsidies drove a massive boom in installations,” BNEF analyst Annabel Wilton says. Still, subsidies and grants continue to be pretty generous, stimulating wider adoption of the renewable energy systems.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.