The critical decade: Australia's future – solar energy

Climate change Power resources Australia
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This report identifies the enormous, but largely underutilised, potential for solar generation in the world’s sunniest continent.

This report provides an overview of the rapidly changing solar industry, including international developments and opportunities for Australia to better utilise and benefit from solar resources in the future.

Key findings

1. Solar photovoltaic (PV) systems have become more and more affordable. As prices have fallen, ordinary Australians have been quietly driving a solar revolution.

  • For Australian households the price of an average solar PV system has fallen to the point where solar is now competitive in some areas with daytime electricity prices.
  • The cost of buying a solar PV system today is less than a quarter of the price a decade ago.
  • Over 1 million rooftop solar PV systems have been installed in Australia, up from over 8,000 in 2007. About 2.6 million people, 11% of our population, now use the sun for their electricity needs.
  • Queensland had the largest number of solar PV installations of any state, followed by New South Wales and Victoria. Australian households in outer metropolitan suburbs with high concentrations of home mortgages have a higher proportion of rooftops with solar PV than other suburbs.
  • Households are motivated to install solar PV or solar hot water systems to reduce their energy bills, control their energy generation and make a positivie difference to the environment.

2. Australia’s solar industry is growing rapidly, exceeding all expectations and opening opportunities for households, business and job growth.

  • Australia is the world’s sunniest continent with enormous, but largely underutilised, potential for solar power generation.
  • As the solar industry grows, it opens opportunities for small businesses, investment and jobs in solar installation and maintenance. There were more than 16,700 full time jobs in the solar PV industry in 2012.
  • Australian scientists have always been at the forefront on solar technology, making the first solar hot water heaters in Australia in 1941 and playing a significant role in improving solar PV panel efficiency. Australia is well placed to continue to play a global leadership role in solar energy.

3. Globally, a move towards significantly greater use of solar energy is inevitable. In the last five years substantial momentum has been created, driven by falling production costs and escalating investment and policy commitments from major players.

  • China is the world solar investment leader, setting a one-year record in 2012 with US$31.2 billion invested. Solar capacity doubled in 2012 and China intends to triple that capacity in another two years.
  • Germany receives less sunlight than Victoria but has more installed capacity than any other country due to a significant program of policy support.
  • Globally, the cost of producing solar panels fell by 75% between 2008 and 2011.
  • Total global investment in solar energy grew to US$140 billion in 2012. Total global installed solar PV capacity grew by 42% in 2012, four times its level in 2009.
  • Renewable energy, particularly solar PV, is becoming more cost competitive as countries introduce carbon pricing.

4. Solar will become a more and more important part of the Australian energy mix into the future. Greater demand for solar energy requires grid infrastructure to be upgraded to meet contemporary needs as the industry expands.

  • Modelling of Australia’s future energy usage consistently indicates growing solar energy.
  • By 2050 solar PV has been projected to provide 29% of Australia’s electricity needs.
  • Solar energy systems have come a long way. Solar energy can now be used day or night by storing the sun’s energy and through effective grid management. Internationally, Concentrated Solar Power (also known as solar thermal) plants are providing continuous power 24 hours a day.
  • Ensuring that the electricity network is effectively managed will be important for growth of the solar energy sector. While there may be some challenges, there can also be a range of benefits for grid management from greater solar energy systems.

 5. Solar energy systems are poised to play an important role in tackling climate change.

  • To avoid the most damaging consequences of climate change, we must virtually eliminate greenhouse gas emissions within decades.
  • The rapid uptake of solar PV has already made a contribution to the downward trend in greenhouse gas emissions from Australia’s electricity generation sector.
  • The challenge is to turn Australia’s enormous renewable energy potential into renewable power. Given the falling cost of solar energy and Australia’s exceptional solar resources – and with appropriate policy settings – solar energy systems can play a rapidly increasing role in reducing greenhouse gas emissions.
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