Australia has the highest number of solar PV systems per-capita in the world, with over 1.7 million systems installed since 2001. The total installed capacity surpassed 5,000 MW in early 2016, and just 20 months later it passed the 6,500 MW level[i].
Solar PV installations have increased in both number and size
Households have driven the total number of installations and have provided most of the installed capacity. However, utility and commercial-scale solar have become more prominent in recent years, and have helped to increase the average size of all installed solar PV systems from 1.77 kW in 2010 to almost 4 kW by the end of 2017.
At the utility level, we have seen projects such as the Nyngan 102 MW, Moree 56 MW and Broken Hill 53 MW systems completed, with many of the projects supported by ARENA’s large-scale solar photovoltaics round to come online soon.
At the commercial scale, the Clean Energy Council reported that the 75-100 kW market is the fastest growing sector in the solar market[ii]. This includes businesses who are keen to invest in solar but wish to avail of the upfront discount from Small-scale Technology Certificates (STCs).
Solar PV systems are now breaking through the 100 kW ceiling
Customer-level implementation of solar PV systems greater than 100 kW is also rapidly growing. Let’s analyse solar installations under 4 MW but greater than 100 kW:
- In 2016 and 2017, almost the same number of installations (96) were installed as those between 2001 and 2015 (103).
- In terms of capacity, over 37 MW was added in 2016 and 2017 by systems in the 100-4,000 kW range, compared with 38 MW in the preceding 15 years.
Why is this trend occurring?
This trend is significant as it means that accessing the STC as an upfront discount is becoming less important as a driver of the business case for solar. When talking to our customers, the reasons why they are installing or considering installing larger solar PV systems are numerous.
- Wholesale electricity prices – many businesses have seen their contestable electricity costs increase steeply in recent months, in some cases by as much as 250%. In response, business is re-taking control where they can. Solar, as well as efficiency initiatives such as LED lighting, are tangible measures that offer certainty of savings and a long-term hedge against some of the volatility in the market.
- Declining costs of solar means it is becoming cost effective without subsidies – Solar Choice’s November 2017 index of solar PV prices[iii] reports that 100 kW systems now have a median price of just $1.12/Watt inclusive of STCs, which equates to around $1.80/watt total cost. This median price continues a downward trend in commercial-scale solar PV prices of close to 20% over the past four years.
- Others are doing it – increasingly businesses see competitors and peers in their region and sector installing solar PV systems and reap rewards through recognition and better More and more businesses are responding by acting themselves to ensure they remain competitive.
- Meeting corporate goals/targets – many businesses, particularly large corporates, have sustainability targets which often include ambitious goals for renewable energy and/or carbon emissions, and many businesses also face supply-chain pressure to improve their sustainability performance. Maximising behind-the-meter solar PV on their facilities is a prominent way to achieve sustainability goals, save costs, improve reputation, motivate staff and demonstrate to customers and supply-chain partners how they are ‘walking the talk’.
- Large-scale Generation Certificates – while renewable energy incentives are not as ‘critical’ to the business case as they were a few years ago, the availability of LGCs at today’s spot prices, even for a few years, remains an important financial incentive. Conversely for some businesses, retiring their LGCs is a tangible step they take to validate the carbon abatement they achieve from their solar investment.
- Battery storage – it’s not front-of-mind, but most businesses are aware of it and know that in a few years’ time storage will be much cheaper and will offer them the ability to derive greater value from their solar investments, through higher self-consumption, load shifting, reduced peak demand and potentially network support. In the meantime, improved feed-in rates for exported electricity helps the business case.
Who is implementing solar PV systems over 100 kW?
Just 18 solar PV systems greater than 100 kW were built before 2012. The Singleton PV power station led the way, originally built for the Sydney Olympic Games in 2000. This system then led the way again in 2015, showing how a generator could contract directly with an end user (University of Technology Sydney) to supply power.
Some of the other ‘early adopters’ of greater than 100 kW systems were local councils such as Coffs Harbour City Council’s Rigby House (136.5 kW) and airports in both Adelaide and Alice Springs. The Northern Territory was the most active region, implementing nearly half of the systems completed by 2011.
Since 2011 the range of sectors and the locations of solar PV systems greater than 100 kW has increased significantly. Most prominent among adopters of these systems are aged care providers, retail properties, wineries, education facilities and mining & manufacturing firms. These tend to be facilities with large roof or land space and large continuous daytime load that can be part-met by on-site solar power.
In terms of scale, many of the largest systems are being installed by the retail property sector and by Universities. CSU’s Wagga Wagga campus 1,769 kW system and Stockland Shellharbour’s 1,218 kW system are prominent examples.
What are our clients planning?
Many of our clients are planning solar PV projects that will well and truly exceed 100 kW.
- More and more aged care providers are looking at solar PV and embedded network strategies, extending beyond their main buildings to include residential care homes that will enable them to provide lower cost sustainable energy to their residents.
- We are seeing many local councils and water authorities recognise the potential for solar on water and wastewater treatment facilities, including land, buildings, reservoirs, ponds and dams. Lismore City Council’s 100 kW floating solar plant will undoubtedly see others replicate this approach, benefit from Lismore’s lead and scale up to larger systems.
- Several Universities are planning systems that will follow UQ’s and CSU’s leadership, and we expect more mining and manufacturing facilities to do likewise.
Your next steps
The business case for maximising your solar PV potential based on your load and available space has become very attractive in the last two years.
As Patrick, technical director at 100% Renewables puts it, ‘We know that energy prices are going up. We know that costs for solar panels are going down. Staff and customers want you to power your organisation with renewable energy. The business case is clear, and organisations with the capacity to install solar can ‘walk the talk’, take back control of their energy costs and improve their triple bottom line.