Australia has been known as a solar power champion, with high solar penetration and a reputation for innovation in the industry. However, the International Energy Agency (IEA) has noted a slight contraction in PV installations in Australia in 2022, dropping from 5 GW to an estimated 4 GW. The IEA has attributed the contraction to supply chain issues and investment lags, but remains optimistic about the future of the Australian solar market.
According to the IEA's Photovoltaic Power Systems Programme (PVPS) Annual Report 2022, Australia has a cumulative installed capacity of 29.7 GW of PV and at least 3.36 million rooftop solar systems. The country is ranked 9th for annual installation capacity with 3.9 GW and 6th overall for cumulative capacity. Additionally, Australia ranks No.1 in the world for installed solar per capita with 1,166 watts per person.
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Despite the contraction in PV installations, the IEA predicts that the market landscape in Australia is paving the way for an increased rollout of rooftop solar, particularly in commercial PV deployment. The agency notes that “the economic fundamentals for residential and commercial PV are outstanding,” with Australia's high electricity prices and inexpensive PV systems making it possible to achieve payback in 3-5 years. The IEA expects 2023 to see stability in rooftop solar and some growth in commercial and industrial installations.
The IEA also notes that the Australian storage market remains strong, with more than 19,000 new batteries installed with small-scale solar systems in 2022, increasing the total number of batteries installed to upwards of 60,000 by the end of the year. The Australian storage market is viewed favorably by overseas battery and inverter manufacturers due to its high electricity prices, low feed-in tariffs, excellent solar resource, and the large uptake of residential PV.
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The IEA is also interested in large-scale solar, and notes that 1.7 GW of new larger-scale solar was added to the systems in 2022, despite regulatory challenges and transmission limitations.
While there are some challenges facing the Australian solar market, the IEA remains optimistic about its future. As the world moves towards cleaner energy sources, Australia has the potential to continue leading the way in solar power innovation and adoption.
In the words of the IEA, “Australia has a unique opportunity to create a bright and sustainable energy future, with rooftop solar and storage at its heart.”
