Big changes ahead for Australian solar

2014 will be a watershed year for the Australian solar industry, and consumers will feel the impacts one way or another.

The fate of Australian companies who participate in this industry hangs in the balance at present with almost every single policy mechanism that supports solar energy and the wider renewables sector under review or threat. Just what the end results will be remains to be seen, but the messages from Canberra are not good right now.

And consumers, who are already suffering the effects of a dramatic shift in currency exchange rates on predominantly imported solar goods, will have to bear the brunt of both. 

New research just released by Solar Business Services predicts big changes in Australia this year. The country is coming off the back of an FIT banquet that made solar a delectable proposition over the last few years.  Although it’s still a fantastic proposition, the residential market is only expected to be around half the size it was just two years ago.

The solar market in Australia remains one of the top 10 largest markets in the world and will be saved by commercial growth this year, but is unique in being a very residential-focused market.

Australia installed more than 250,000 residential systems in 2013, compared to around 150,000 in the US, although the US total market was almost 6 times bigger. The land down under has become the solar home capital, but has lost ground on large scale deployment so far.

Electricity prices and underlying demand are now the driving force behind the uptake of PV in the residential and commercial segments. We are unlikely to see hyper-growth but even in the worst case scenario the industry will not stop; consumers and businesses still get it.

Ultimately, growth will return because solar makes so much sense down under and at large scale, its tantalisingly close to competing with the rapidly changing landscape of electricity generation. The other aspect of Australia that is unique is that demand is falling; consumers have reduced consumption and industrial use is down. This is one of the key reasons is that it’s almost impossible to get PPAs signed for large scale solar because there is already an excess of energy from existing capacity.

If you’re a consumer, getting in before the potential worst case scenario has to make sense. If you are in the industry, fasten your seat belts and get smart about how you do business. It’s not called the solar coaster for nuthin.

© 2014 Solar Choice Pty Ltd

Nigel Morris

Nigel is one of the foremost solar energy analysts in Australia, having worked in the industry for over two decades.
Nigel Morris