Solar energy going from strength to strength
Australian households and businesses installed a record-breaking 5,000 MW of solar power systems in 2020, equivalent to 15 million average solar panels, and the trend is set to continue into 2021.
This additional capacity is enough to power 1 million homes, and brings Australia’s total solar generation capacity to 20,000 MW, up 33 per cent on 2019’s 15,000 MW of capacity.
“The annual growth rate for rooftop solar has exceeded 33 per cent for the past four years, and accelerated in 2020,” said Warwick Johnson, managing director of SunWiz, a solar energy consultancy.
Several factors are driving the uptake of solar power in Australia, including a desire in households for energy independence, environmental concerns, and the work-from-home trend.
“In fact, the COVID-19 pandemic had an overall positive impact for the [solar] industry as people staying at home more turned to solar to help reduce their electricity bills,” Johnson said.
Last summer’s extensive bushfires also brought to peoples’ minds the issue of energy self-sufficiency, and rising electricity costs have promoted ideas of energy efficiency.
The solar energy industry worked around the COVID-19 pandemic which threw up its own challenges of equipment shortages from China, lockdowns stopping installations, and economic uncertainty.
“It is an exceptional time to be working anywhere in the Australian rooftop solar supply chain, and things will only get better as solar system prices continue to hit record lows and momentum builds on reducing emissions to tackle climate change,” said SunWiz’s Johnson.
There is still a long way to go before the solar industry in Australia displaces established fossil fuel power generation sources such as coal and gas and diesel.
Solar power generated only 5.3 per cent of Australia’s electricity in 2019, and 2.5 million Australian households have installed solar panels on their rooftops, according to the Clean Energy Council.
Large scale battery storage projects linked to solar are underway in Australia, as state governments work towards meeting zero carbon emissions targets with initiatives such as the 14,000 MW SunCable project in the Northern Territory, and the 26,000 MW Asian Renewable Energy hub in WA.
Alice Springs, the outback town that is the gateway to Uluru in the Northern Territory has been chosen for a two-year, $9.3m renewable energy project partly funded by the federal government.
The buoyant market for Australian solar energy marks a sharp turnaround from business conditions only one year ago when the industry was struggling.
Bloomberg estimated new Australian solar installations had fallen by 40 per cent in 2019, while globally they had risen by 14 per cent.
In early 2020, Downer (ASX:DOW) said it would no longer build solar panels due to market uncertainty.
“Developers, contractors and bankers all struggle to come to terms with the risk of large power loss factors, grid stability problems, connection problems, and equipment performance issues,” Downer chief executive, Grant Fenn, said at the time.
Small caps attempting to crack the solar market were finding it an uphill task.
In 2019, ReNu Energy (ASX:RNE) got out of solar, selling its assets to private renewable company CleanPeak Energy.
Suffice to say, that those ASX solar companies that stayed the course through the tougher times are now well positioned for the market’s growth phase.
One small cap still in solar is New Energy Solar (ASX:NEW), which invests in solar projects globally.
Infigen Energy (ASX:IFN) has a handful of solar projects, three in Queensland and one in New South Wales.
Another is diversified energy play MPower (ASX:MPR) (previously known as Tag Pacific), which builds solar panels as well as battery energy storage systems.
In November 2018, it won a contract to construct panels for the proposed Pirie Solar Farm in South Australia.
Genex Power (ASX:GNX) has also built a solar project and it received a $132 million grant from the Queensland government.
Finally Windlab (ASX:WND) specialises in wind projects but it has one integrated project at Kennedy Park which includes solar energy.
The Australian Renewable Energy Agency (ARENA) announced in October $3m of funding to Australian start-up SunDrive for its rooftop solar panels that use copper instead of silver.
“This presents an ongoing supply risk as solar demand grows and is further exacerbated if the industry moves to higher efficiency next generation solar cell structures which require two to three times more silver per cell,” the agency said.