A RenewEconomy analysis of the International Renewable Energy Agency (IRENA) figures for 2019 shows that Australia’s per capita deployment rate was also four times that of fast-growing renewable energy markets such as the China, Europe, Japan and the United States.
In terms of global capacity, Oceania still only represents a tiny share of global renewable energies. Its 40 gigawatts of renewable energy accounted for just 2% of clean energy globally in 2019, according to IRENA figures. But it added 6.2 gigawatts of capacity last year, increasing by more than 18%. This compares to growth of 6% in North America, 7% in Europe and 9% in Asia.
Australia’s modest population of 25 million means per capita growth rates are even more extreme.
While Australia has a vibrant wind market, distributed solar power has been the real success story, said Darren Miller, CEO of the Australian Renewable Energy Agency. “The wind was a reference. Even though states have removed feed-in tariffs, installation rates for solar roofs have reached record levels, ”Miller said in an interview.
A combination of natural benefits and smart policies has boosted the Australian solar market. About 10 years ago, Australian state governments introduced feed-in tariffs and federal authorities instituted discounts for solar systems. These still cover about a third of the initial costs for consumers.
Over the past five years or so, the rooftop PV market has been driven by rising electricity costs, a trend that has coincided almost perfectly with a sustained decline in prices for residential PV systems.
The country enjoys lots of sunshine and high levels of home ownership and single family homes. It also has a high gross domestic product per capita, Miller said, with wealth distributed fairly evenly across the population, making a rooftop photovoltaic system a viable option for a significant fraction of the population.
The recipe works. According to a Q1 2020 solar report from the Australian Energy Council, nearly 2.4 million solar systems have been installed across the country. Australia’s rooftop photovoltaic capacity stands at 10.7 gigawatts, or three-fifths of the US residential solar market of 17.6 gigawatts, which is significant for a country with less than 8% of the US population. .
The growing adoption of residential solar power in Australia has helped boost commercial, industrial and utility markets, Miller said.
Secrets of Australia’s solar success
Another critical factor helping to boost the use of solar power in Australia is the lack of facility paperwork, Miller said. “There are very few board approvals, government approvals, etc. [that are necessary]. This can be done by an electrician. ”
This slight regulatory touch helps keep prices low. Residential solar systems currently cost around AUD 1 (about $ 70 cents) per watt in Australia including installation, Miller said. This compares to $ 2.69 per watt in the United States, according to Wood Mackenzie’s 2020 estimate for the Solar Energy Industries Association.
Not all countries can enjoy Australia’s sunshine, but it might not be that important in the long run, said Fereidoon Sioshansi, president of Menlo Energy Economics in California.
“Sunshine helps but has little to do with it,” Sioshansi explained in an email, highlighting other more important factors, such as favorable regulations, the high proportion of single-family homes and high retail electricity prices.
Looking at thriving solar markets, “it’s critical that consumers are rewarded for exporting excess solar power, at least to begin with,” Sioshansi said.
There are several lessons the United States could learn from Australia, said Lauren Shwisberg, head of electrical practice at the Rocky Mountain Institute. These include simplifying rooftop solar incentives and making it easier to set up virtual power plants.
Other aspects of Australia’s booming solar market might be more difficult to emulate. “The United States has relatively cheaper retail prices for electricity, so there is less incentive for customer adoption based on an individual value proposition,” Shwisberg said.
“We’re going to have to get creative in the United States if we’re going to see customer adoption take off and provide customers with additional value.”