In January of this year this press release on solar installations was released:
Australia reaches two million
small-scale renewable energy installations
The Clean Energy Regulator has welcomed 2014 with news confirming Australia has now installed more than two million small-scale renewable energy systems, under the Renewable Energy Target.
This comes only eight months after reaching one million rooftop solar installations, providing a strong indication that investment in small-scale renewable energy continues to flourish in Australia.
Assisted by falling system costs coupled with financial incentives derived from the Renewable Energy Target, small-scale systems have become more and more affordable for everyday Australians.
The Clean Energy Regulator estimates the two million small-scale installations have a capacity to generate or displace approximately 6,882 gigawatt hours of electricity annually, with 4,182 gigawatt hours generated from small-scale solar, wind and hydro installations and a further 2,700 gigawatt hours displaced by solar hot water systems and air source heat pumps.
This equates to the amount of electricity required to power approximately 1.04 million Australian homes for a year. This is enough to power all Perth, Hobart, Darwin and Canberra households combined1.
It’s an impressive message. Heck, why equivocate, it’s an impressive achievement. That’s a lot of systems, that’s a lot of electricity, and that’s a lot of energy. To add one more stat, it’s national household penetration of PV of about 14%! All told the impression one takes from the media release is that it is boom time for solar. Is it? Or might this be a governmental “goodbye and good luck”?
Commendably the data behind this announcement is freely available. I checked it to confirm the electricity generation numbers. Geoff Russell had another idea: check the installation rate. Here’s what he found:
The identical data, presented as above, tells the other side of the story: rates of installation are slowing, dramatically. The peaks and troughs are perfectly correlated to withdrawal of subsidies, to wit:
- 1 July 2012: Reduction of solar credit multiplier from 3x to 2x
- 1 January 2013: Phase out of solar credit multiplier
- 30 June 2013: Closure of ACT feed-in tarriff
- 30 September 2013: Closure of South Australian feed-in tariff
No doubt Australia’s solar story is far from finished. However right through to 2014 solar PV installation rates remained highly sensitive to Government support. They simply are not that cheap.
It is also worth considering that, at 14% penetration, the rational behaviour evident in the graph above suggests solar has likely knocked off many of the best suited households, like those who:
- Can afford it. No I’m not calling PV an upper-class toy, but a household needs to scrape some upfront cash together, and not all households can
- Have a roof to put it on. The 14% stat quoted above was based on all dwellings (high density, caravans etc included). As a proportion of separate houses, it’s 18% penetration
- Own the roof they are living under. Between 25% and 30% of Australian households are renters. The reality of split incentives in rental/landlord relationships is a well-known impediment to sustainability improvements in dwellings
- Have the most favourable aspects, being largely unimpeded north facing roof
- Give a damn about climate change and clean energy
These factors are further reasons why new installations may be harder to come by from here. For commercial and industrial roofs, the dramatically lower prices paid for electricity tip the balance against solar far more than residential customers. That potential boom frontier remains out of reach for the time being.
Geoff’s simple analysis is important to help us see the whole picture. If we don’t, we risk making assumptions about the business-as-usual future that simply won’t be true.
Eighteen percent of separate households and 4.1 GWh of electricity… if we were wanting solar power on Australian roofs, it has worked. We’ve got solar. It has been bumby, however since the Photovoltaic Rebate Program was introduced in 2001 we have had 13 years of sustained support in the form of rebates, renewable energy certificates, artificially multiplied certificates and feed in tarriffs. The inarguable popularity of this technology has seen people-power campaigns repeatedly thwart attempts by both major parties to remove financial support.
Between solar PV, wind (which delivers in excess of 5 TWh of clean electricity), and some softening demand, Australia’s electricity emissions have returned to 2003 levels of…186 Mt per annum from a 2009 high of 209 Mt per annum, while total national emissions have climbed.
We wanted solar and we’ve got solar. Now we need something else and it will need to be big.
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