New solar energy installations tripled in capacity in 2018 in Australia, with solid growth in rooftop solar eclipsed by a massive increase in utility-sized ventures.
According to data collected by Green Energy Trading, the nation added just over 3775 megawatts of photovoltaic capacity last year, up from 1270MW a year earlier.
“That’s blown away” the previous records, Tristan Edis, director of Green Energy Markets, said. “It’s going to have a significant impact on [wholesale] power prices in the middle of the day.”
Total installations are forecast by the consultancy to rise another quarter this year to 4700MW.
While 2018 was a year the solar farm came into its own – with more than 2000MW added, half of it in Queensland – rooftop solar for homes and businesses continued to expand at annual rates of more than 40 per cent, the firm estimated, using certificates surrendered by installers.
For residential users, NSW regained the lead as the nation’s largest market, with 326MW added, up almost 60 per cent from 2017 levels.
Victoria, though, grew at close to 70 per cent during the year, thanks in large part to a pre-election promise from the Andrews Labor government to support the installation of 650,000 new systems.
Australia late last year passed its two millionth home with solar PV, with installations running at six panels a minute. All up about one in five houses have solar systems, one of the highest penetration rates anywhere.
Domenic Mercuri, chief executive of Solargain, said the lead time for installation was out to as long as 10 weeks in Victoria compared to about half that in other states.
The company grew about a fifth in 2018, swelling its workforce, including contractors, to 220.
“We’d expect to grow another 20 per cent this year,” Mr Mercuri said.
Even with the industry’s rapid pace and payback times for residential panels dropping to under five years, consumers were becoming more savvy, he said.
“They know the brand they want, the panels, the system size – they’re more educated,” including wanting to know how long the retailer had been around, Mr Mercuri said.
With signs that retail power prices have started to taper – reducing one accelerant for demand – fresh buyers were appearing on the commercial side, which accounts for about 30 per cent of Solargain’s sales, he said.
Green Energy Markets’ Mr Edis said businesses looking to add systems of greater than 100 kilowatts of capacity – a segment which more than doubled in 2018 – was emerging as a growth sector.
“We’ve probably got significant room for growth there in 2019,” he said, adding the sector “is only just starting to develop some legs”.
One reason for the optimism was many companies had three-year power contracts. About a third of them could expect higher electricity bills this year when they renewed deals that included the effect of the closure in 2017 of Victoria’s Hazelwood power plant, making solar PV more attractive.
Wholesale prices in the National Electricity Market may start to decline this year as the impact of the huge increase in solar farm capacity started to take effect, Mr Edis said.
Some of that price influence had so far been masked by a sharp reduction in output from Snowy Hydro plants in anticipation of falling reservoir levels amid the drought.
Assuming dams start to fill up this year and next, the benefit of extra renewable capacity – including the wind and solar farms that will come online in 2019 – should add to downward pressure on wholesale prices, Mr Edis said.
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