There are now over 2.15 million solar rooftops in Australia, and the figure is poised to grow significantly over the next five years. The growth is due to several factors, including rising electricity prices, improvements to renewable technologies, favourable government incentives, and changing consumer consumption behaviours.
Rising Electricity Prices
Retail electricity prices in Australia have been rising steadily over the last decade (Figure 1). Some areas have experienced a 100% increase in price during this period. Prices are expected to continuing increasing until late 2020 before levelling off by 2025.
These changes have driven many consumers to explore renewable energy solutions as a means of limiting future exposure to rising prices. Unfortunately, these price hikes have meant that energy has become unaffordable for many Australians, forcing some to forgo basic services and living standards.
The costs of solar panels have reduced materially over the last few years, coinciding with improvements in solar panel size and efficiency. These factors have further tipped the scales favourably for investment in residential and commercial solar, as the payback period has shortened, and the efficiency and reliability of the technology has improved.
Battery storage economics have also improved, whereby the potential to add storage to individual small-scale solar investment provides the opportunity for additional energy security. For some consumers, storage technology further lowers the cost of electricity by providing the opportunity to maximise the value of ‘spillage’ of excess energy into the grid to further offset costs.
Favourable Government Policies
The Renewable Energy Act with its support through Small Technology Certificates (STCs) is a shining light in terms of providing certainty of financial support to solar panel installations of systems under 100kW. While there is an end date of 2030 for this scheme of financial support, the number of annual installations has picked up considerably in 2018 and is continuing in 2019. If the scheme remains unchanged, the next four to five years will see an intensive level of activity as potential small-scale solar investors seek to take advantage of the up-front level of financial support from the STCs as the period of eligibility gradually reduces.
The table below shows that renewable energy generation currently represents 21% of Australia’s electricity generation and depicts clearly the relative position of small scale solar as a material proportion of renewable generation by technology type.
Consumer purchasing behaviours
Customer behaviour and decision making is a critical factor. The emergence of electric vehicles and the growth of their popularity in Australia, which is facing considerable fuel supply challenges and risks, is another key element in the growth of solar investment as residential customers look to provide an integrated sustainable solution to their energy and transport needs through solar, storage and electric vehicles.
Despite the advances in technology and the lowering of solar costs there is still, for many customers, the barrier of a significant up-front cost. With many customers experiencing considerable volatility in the electricity prices they have paid over the last five years, many are keen to secure some form of certainty in their household and small business costs while simultaneously reducing carbon emissions.
Given all this, what is Radian doing to help you?
Our Power Purchase Agreement (PPA) model enables residential and commercial customers like you to reduce their energy costs immediately, achieve certainty over the PPA period and implement a solar, and potentially storage, system tailored to your individual needs. Our product uses market leading technology to provide you with long-term and reliable financial and sustainable benefits while avoiding the previously prohibitive up-front costs associated with solar technologies. The Radian model will deliver the benefits of a sustainable solar solution without the extensive financial outlay that such an investment normally requires the customer to make. It is the way of the future and it is how we are helping all Australians to save money and transition to a secure and renewable energy.