Whether you’re considering installing solar for your home or for your business, or you already have it, there’s a LOT to know. A strong understanding of solar technology and energy generation is vital when making the investment.
To cut through the overwhelming amount of information online about solar, I am putting forward the must-know details and statistics around the current state of solar systems in Australia. This is what to know about installing solar in 2022.
The Solar Industry’s Growth
- Today, approximately 3% of the worlds electricity comes from solar power. The industry continues to surge as adoption spreads and technology improves. Estimates show the compound annual growth rate of the industry from 2021-2028 will be close to 7%, up to around USD $300 billion in value by 2028.
- Australia has seen particular success in the solar space. Almost one in three Australian homes now have solar panels.
- In 2021 Australians installed 40% more rooftop solar than in 2020. Solar now contributes over 7% of the energy going into our national electricity grid.
- That puts us among the top nations worldwide for solar adoption. In 2010 total installed costs in Australia were about 50% higher than in Germany, but after continuous cost declines, in 2020 Australian systems were found to cost around a quarter less than in Germany.
- Aligning with Australia’s impressive uptake of household solar, we are also world-leading in the research and development of solar technology. For instance last year, a team at ANU claimed a perovskite solar cell efficiency record at 22.6%.
- The cost of rooftop solar installation varies largely depending on a lot of factors such as location, energy requirements, difficulty of install, local regulations and individual residential specifics. But the approximate costs range from about $2,500 for the smallest 1.5kW systems up to around $15,000 for the 10kW systems.
- The price of a 5kW solar system has fallen by around 58% in the last six years.
- Variables mean that payback periods also differ largely, especially when inverter types and batteries are bought into the mix. Today though, the industry accepts an average payback period of around 4-6 years.
- There is a standard 10 year product warranty for solar panels in Australia, as well as a 25 year performance warranty.
- Rooftop solar systems are generally fixed in orientation, compared to utility-scale systems that can track the sun, meaning output differs greatly and leads to mixed impacts on price.
- Consistent supply of utility-scale solar output reduces price variability, while rooftop solar output increases it, given the fluctuations in energy generation as the day progresses.
- Residential PV installations produce DC electricity directly from solar energy. There are two types of residential PV systems: grid-connected and “off-grid” or “stand-alone”. Grid-connected systems can feed the national grid through an inverter. Off-grid setups are solely for self-consumption and require the use of battery banks to separate consumption from generation.
- In Australia, solar adopters enjoy some particular financial incentives, which have driven our high rates of uptake, this is explained in the following section.
What to Know About the Solar Rebate:
- Under the Government’s Small-scale Renewable Energy Scheme if you buy a solar system in 2022, it is subsidised by a federal government scheme worth about $447 per kW installed. That’s based on a $36 Small-scale Technology Certificate (STC) price. That’s around $2,950 off on a typical 6.6kW system that is usually applied at the point of sale.
- The scheme is not technically a rebate, despite it being widely referred to as a rebate. This is because it is a government program that compels other people to buy your certificates, typically the fossil fuel generators.
- The STC price is a commodity and prices will fluctuate in the open market based on the balance of supply and demand along with other factors. That means as demand for solar increases, the STC price can drop – lowering the potential savings made on a solar installation.
What About the Feed-In Tariff?
- When your rooftop solar panels generate more power than you’re using in your home, the leftover solar energy is sent back into the electricity grid.
- A feed-in tariff is a payment you’ll receive for this unused energy. The tariff appears as a credit on your electricity bill and is paid to you from your electricity retailer, usually at a set rate per kilowatt hour.
What to Know About Solar: The Issues
- The Global Solar Cell Supply Chain: A recent special report by the International Energy Agency found that China controls over 80% of parts of the global PV solar supply chain, with one out of every seven panels produced worldwide being manufactured by a single factory. Australia currently has only one solar manufacturer, Tindo Solar. There is a clear and present need to diversify Australia’s solar supply chain.
- Curtailment: Our grids were designed primarily for large fossil fuel power stations transmitting electricity in one direction, while solar households both consume and export power. That means in some conditions, household solar may contribute to spikes in voltage levels outside of the acceptable range, especially as voltage levels are typically already high. To counter this, your solar system can stop exporting to the grid or even shut down temporarily if voltage levels are too high. This is called “curtailment”. Curtailment of wind and solar on Australia’s national grid averaged 191 MW in Q4 2020. That’s enough power for 750,000 EVs driving 35kms/day.
Waste and Recycling: Solar panels require end of life recycling or disposal to deal with their constituent parts safely. At present most solar panels are disposed of in landfills, which can cause serious environmental harm. It is far more expensive to adequately recycle discarded solar panels than it is to put them in landfill. This fact requires some serious attention, as the rapid rate of solar innovation means panels will be replaced more and more frequently leaving millions of metric tonnes of discarded solar panels in landfills across the world.