By Adjunct Professor Bill Grace, Australian Urban Design Research Centre

Photovoltaics offer the cheapest solution for energy generation and will play a crucial role in achieving Australia’s net zero emissions goal.

Many Australian households and businesses now produce their own electrical power, a concept unthinkable 20 years ago. How did this happen and why? Much of it has to do with the solar photovoltaic revolution, and Australia’s role in it.

Australia has been a leader in solar technology for decades, led by Professor Martin Green at the Centre for Advanced Photovoltaics at the University of New South Wales (UNSW). His pioneering research, which started in the 1970s, has led to steady improvements in the efficiency of solar panels (i.e. the amount of electricity produced for each unit of sunlight) which has been key to reducing costs. The UNSW technology is used in most solar panels in production globally. Australia has one of the highest take-up rates for private solar PV systems in the world, with system capacity per person around five times greater than the US and 10 times the global average (1). About one in four Australian houses have solar, and 40 per cent in Western Australia (2).

Adjunct Professor Bill Grace

Solar PV is central to the energy transition in several ways. Firstly, it is now the cheapest way to generate a kW of electricity; and getting cheaper. Secondly, unlike every other energy source it can produce power at the location where it is required in any situation with a clear sky above. The cost of transporting electricity in conventional electricity networks, such as WA’s South West Interconnected System, contributes around 40 per cent to wholesale electricity prices so the avoidance of this element is a major factor in the attractiveness of private solar. And of course, the production of power is emissions-free (3).

The support for renewable energy in general and small-scale systems, in particular, is significantly due to the Federal Government’s Renewable Energy Target scheme. The scheme was introduced in 2001 to reduce Australia’s greenhouse gas emissions by achieving 20 per cent of network supplied electricity by 2024. The elegantly designed scheme facilitates the creation of renewable energy certificates from new installations, which are required by electricity retailers to meet the scheme obligations, thus creating a private market for certificates. Small-scale systems such as those suitable for homes and businesses have their own sub-scheme which effectively provides discounts to purchasers for (mainly) solar panels, solar and heat pump water heaters. In the case of solar PV, the discount presently reduces the installation cost by about a third. In addition, when power is produced that is not needed, it is exported to the network, offsetting the requirement for large-scale generation5, bringing some additional revenue from so-called feed-in tariffs. The result has led to massive and accelerating uptake in private solar, as payback periods have fallen to just a few years.

The next step for energy independence will come from coupling battery storage with solar PV. Without batteries, the best an average WA household can do is reduce its imported energy by a little over half, while exporting the balance to the grid during the middle of the day when the sun is high and demand is low. A battery allows the excess energy to be stored (instead of exported) and used in the evenings. Although the business case for a battery is presently marginal, costs for these are also reducing and solar plus battery will become a standard installation in the majority of homes and businesses in coming years, as houses and vehicles electrify.

There is an urgent imperative to reduce greenhouse gas emissions from all sources, and reducing emissions from electricity is critical to the energy transition. Private solar contributes to this objective while also reducing the cost of power to customers and providing greater energy independence. Australia is leading, but other countries will surely follow.

Read the full issue of the Summer 2023 edition of Uniview [PDF 2.7Mb]. This version is also accessible.

References: 

(1)reneweconomy.com.au/australia-deploying-new-renewables-at-ten- times-global-average-11689/
(2) pv-map.apvi.org.au/historical
(3) While at present, there are still emissions produced from the energy used to produce a solar panel, this is small when compared to the savings over the lifetime of the panel, and is reducing as renewable energy use in production increases.
(4) Later adjusted to a fixed target of 33,000 GWh cleanenergyregulator.gov.au/RET/About-the-Renewable-Energy- Target/History-of-the-scheme
(5) This results in some problems for the network but that is another story.