Australia. Infamous for its big wide brown landscape, endless sunshine, kangaroos and people with hilariously blunt attitudes to life.
But did you know that despite its population being less than Texas, Australia is one of the biggest solar markets in the world?
The Australian solar market has been used as a testing ground for global solar manufacturers for decades because of its incredibly diverse and harsh environment. It has deserts that reach 50 deg C, snow-capped peaks, brutal seasons of drought, floods and cyclones, dinosaur era rainforests and 98% of the population lives on the coast adding salt mist to the equation. Oh, and we love a good bushfire too.
It you can make a product work reliably in Australia, you are good to go with your global launch.
With a long track record as a testing ground and amazing solar insolation Australia has also become one of the most progressive solar markets in the world with a host of world firsts, regulations, and industry standards. For other markets this makes the land down under a crucial place to watch closely and learn from.
The market covers all sectors including large scale, but here we are focused on the rooftop sector.
Just a few of the gems you can learn from Australia are:
- Longest grid network in the world – Australia has one of the longest and most remote transmission networks in the world including several isolated systems. This provides both opportunity and challenges for the integration of renewables.
- 100% solar powered States – in an increasingly frequent occurrence several States have met 100% of demand from solar alone at peak times. In some postcodes, rooftop solar penetration is more than 60% of free standing owner occupied homes
- 20GW installed – With a total Grid capacity of around 40GW, Australia’s 20GW of cumulative solar is incredibly significant and is reshaping the energy market. 5GW was installed in 2020 alone.
- 2.5 Million solar homes – Around 300,000 residential solar systems are installed each year adding to this total. On average around 25% of Aussie homes have solar installed
- Solar Retailer Code of Conduct – Unique in the world, Australia’s peak body the Clean Energy Council introduced a voluntary program 7 years ago to drive responsible sales and marketing activities. Today, around 48% or all solar is installed by 1,100 approved retailers.
- 7000 Accredited installers -Australia led the world in introducing installer accreditation and standards and today more than 7,000 installers are accredited.
- Export limits – To help manage grid voltage challenges (or slow the uptake of solar, depending on your perspective) virtually all network operators impose export limits on solar systems greater than 5kW
- Centralised orchestration – From September 2020, the South Australian Government imposed a mandatory requirement for all solar systems to be able to be remotely disconnected and reconnected by Agents acting on behalf of a centralised agency.
- Dynamic Export Control – From July 2021 South Australia will impose dynamic export control limits mandating the centralised remote management of rooftop solar inverters.
- Advanced monitoring – Driven by crude retail metering, net feed in tariffs and export control requirements, Australia has a unique and highly advanced “behind the meter” solar and energy monitoring market.
- Price – Perhaps most incredibly, despite all these factors Australia has one of the lowest installed market prices in the world. Average prices are around A$0.90c /W (post rebate of around A$60c/W). At the low end, consumers can buy for around $0.40c/W installed and premium solar is around A$1.80/W installed
Take a leaf
For solar companies around the world, its really worth taking a leaf out of Australia’s book on how to do solar at scale.
With thousands of solar companies there is huge diversity, and we have some players selling and installing 3,000 systems per month. They have learned a lot about operational efficiency, compliance, quoting at speed and managing workforces numbering the hundreds – all at very low margins.
We also have literally thousands of small companies, mostly electricians who moved from electrical trade activities into selling solar. These companies must fight for survival at lower scale and they’ve learned a few tricks along the way too.
And in the middle ground we have a great variety of medium sized companies. Typically with 30-100 staff many of these companies have decades of experience and cover all sectors of the market. They have developed advanced quality systems and, in some cases, multiple stores or franchises to extend their reach.
The Australian solar retail market also includes a handful of large electricity retailers and corporates who have branched out into solar.
We have also seen community solar programs, a number of VPP trials, and active PPA market and around 25,000 home batteries are installed each year. Notably, a relatively small proportion of solar sales are financed, primarily due to the low capital costs and high yields – estimates suggest as few as 20% of sales each year. We have a small but growing number of electric vehicles integrated into solar systems and solar PV diversion to hot water. As a rule, Australians do love a bit of early adopter technology.
Like all markets we have huge diversity – in the companies delivering products and services and of course in consumer buying behaviour. We have a very active premium quality buying segment but overwhelmingly it is a highly commoditised and incredibly price sensitive market. With so much competition and for better or for worse the market has been “taught” that rooftop solar should be astoundingly cheap.
And like many markets we have seen rebates, feed in tariffs and other incentives come and go with dramatic, sometimes catastrophic impacts on market volume. These factors have forced anyone who wants to survive in solar to work incredibly hard and really innovate to be able to survive. We lovingly refer to our market as the Solar Coaster.
If you have not investigated the Australian solar market to see what can be achieved its worth taking a closer look.
Solar down under – the good, the bad and the ugly