Australia, Where Rooftop Solar Could Meet 77% Of Power Demand By 2026

Highlights :

  • The high contribution of rooftop solar has thrown up grid balancing challenges already,  besides investments into large storage .
  • Getting the balance right is critical, as power prices ought to come down, and not go up, for other countries to pick up from the Australian example.
Australia, Where Rooftop Solar Could Meet 77% Of Power Demand By 2026

In recent time, Australia — one of the sunniest places on the planet — has emerged as a world leader in the rooftop solar market. As of now, households have installed 14 GW of solar panels. By 2025, this figure is set to increase by 8.9 GW.

The reasons for this expansion include the subsidies offered, the sprawling spread of residential houses and farms in many cases, plus the issues with the grid in Australia, where it has made more sense to push rooftop solar initially.

The Australian Energy Market Operator (AEMO), in its annual reliability outlook, has said that rooftop solar may meet as much as 77% of underlying demand in the mainland National Electricity Market (NEM) by 2026, eclipsing the record of 35% set in October last year.

The NEM comprises five physically connected regions on the east coast of Australia: Queensland, New South Wales (which includes the ACT), Victoria, Tasmania, and South Australia. The area excludes Western Australia and the Northern Territory, while the mainland NEM also excludes Tasmania.

Data from the Clean Energy Regulator analysed by CSIRO shows that in 2020, around Australia, over 362,000 rooftop solar PV installations were issued with small-scale renewable energy scheme certificates (STCs) under the Small-scale Renewable Energy Scheme. This was an increase of 28 per cent from 2019.

Australia has the highest penetration of solar globally on a per thousand household basis. Clean Energy Regulator data shows that more than 2.68 million rooftop solar power systems have been installed in Australia in total, as of 31 December 2020; that means one in four homes have solar panels on their roof.

According to BloombergNEF, the country has solar power installed on 30% of homes and is the world’s most decentralized energy market. It has set an example for how grids around the world can transition from traditional electricity generation. In fact, the AEMO believes that South Australia will possibly become the first major grid in the world to meet 100% of its demand through household solar by end-November.

“The NEM is leading the world in growth of distributed PV,” AEMO said. “While these developments challenge the limits of the current power system, they also provide the opportunity for pioneering market frameworks that provide new consumer benefits and demonstrate world first power system operation.”

However, everything in the rooftop solar garden my not be sunny, err, rosy. A recent briefing note from the Institute for Energy Economics and Financial Analysis (IEEFA) detailed a ‘worrying’ precedent in South Australia where new regulatory measures allow for rooftop solar systems to be remotely switched off without householders’ knowledge.

“Authorities should be focusing their efforts on accelerating the deployment of smart, dynamic technologies to modernise the grid rather than imposing crude cut-off mechanisms that reach in behind the meter and take control out of the hands of consumers. This is regulatory over-reach,” said Dr. Gabrielle Kuiper, a distributed energy resources (DER) specialist and IEEFA guest author.

Nevertheless, together with coal plant retirements and growing hydrogen development interest, residential solar is accelerating the transition of the NEM, AEMO said. No reliability gaps are forecast for the next five years, it added.

“Australia’s energy system is transitioning to a decarbonised and decentralised power system,” AEMO Chief Executive Officer Daniel Westerman said in a statement. “By 2025, there will be periods of time when all customer demand could be met by renewable generation.”

At more than 14.7 GW, rooftop solar is now the second largest generator by capacity in Australia, according to the Australian Energy Council’s latest Quarterly Solar Report.

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Soumya Duggal

Soumya is a master's degree holder in English, with a passion for writing. It's an interest she has directed towards environmental writing recently, with a special emphasis on the progress being made in renewable energy.