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Clean Power solar market saturation australia

Published on March 13th, 2013 | by Giles Parkinson

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Solar Market Saturation In Australia (Map)



Reposted from RenewEconomy:

Australia has experienced its own version of the “solar revolution” in the past two years, when some 2,000 megawatts (MW) of rooftop solar PV were added to households – mostly as the result of generous feed-in tariffs and other incentives.

The fact that many of these tariffs have now been removed suggests a cooling-off in the solar market. But the costs of solar PV modules has fallen so far that the industry actually faces another problem – it could soon reach “saturation” point in many key markets.

The overall takeup of solar is estimated to be at nearly 10 per cent of dwellings across Australia, and close to 20 per cent in South Australia. In the owner-occupied housing market, the national average is already running at 20 per cent, and is at more than 35 per cent in many markets.

In one locality, Port Elliott in South Australia, the penetration rate on available owner-occupied housing has reached 90 per cent. According to solar industry forecasters Sunwiz and Solar Business Services, this “saturated” solar market could be repeated in many other localities around Australia.

“Under our High scenario by 2017 rooftop penetration will hit 90 per cent (of detached owner-occupied homes) in some states, with massive consequences,” the authors write in their report.

This will be driven by high rates of return. The authors say the average IRR of a 3kW PV systems are expected to be in the range of 20-35 per cent by 2015, and returns like this are already available at the low-price end of the market.

“Although not like the heady days of 2011 and 2012 (when state governments were offering attractive feed-in tariffs), payback on a 3kW system is expected to be between 2.8 and 5 years in the near future.”

saturated solarSo what does a saturated solar market look like? This graph to the right gives some idea. It’s not Port Elliott, but an area of nearby locality of Victor Harbour, and the data actually dates back to 2011. But it clearly shows how much solar has been taken up by the residents.

The Sunwiz and Solar Business Services report says these penetration rates are a serious concern, because it will reshape the dynamics of  the market, and force the industry to service previously ignored market segments – such as the rental and apartment markets.

The Sunwiz and Solar Business Services report says these penetration rates are a serious concern, because it will reshape the dynamics of the market, and force the industry to service previously ignored market segments – such as the rental and apartment markets. And it could force some solar businesses to relocate.

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • Otis11

    Ah, the other thing that might be overlooked – It seems like many of the residential arrays are significantly undersized. There’s a high portion of the market that may come back for a larger array.

    But in the end they do need to move to get the commercial and industrial markets as well. They’ve probably got until 2030 before the market is truly saturated and it will wind down to a stable “Repair as things go bad” size. Just the natural progression of new markets.

  • Johnny5

    Australia’s energy market on the verge of collapse, ridiculous high prices being forced to buy back renewable energy at distortion prices under legislation. Prior to the installation rooftop solar power the Australian energy market was stable. However that changed, when propaganda infiltrated the government claiming that solar power would save the planet. At the same time Germany government is on the verge of collapse as has been forced to import power from France and the Czech Republic unlike Australia does not have that option of importing power. Proving the point that the German economy is under financial crisis as result of this revolution in green energy single-handedly taken out by rooftop solar power liabilities, as trillions of dollars continues to be paid into the future.

    • Otis11

      Germany’s Financial status is due to it bailing the rest of Europe out of the financial crisis, not the “Clean energy revolution” like you suggest.

      And Solar Market Saturation has nothing to do with electric grid stability – it’s about the market for the solar installers. Solar power has reached 90% of eligible rooftops, it is not supplying 90% of the power (well, in some of the even higher saturated markets it is, but that’s not what this statistic means.)

      There’s a lot of room to grow before grid stability becomes an issue – and that’s not because of Renewable Energy inherently, but the combination of Decentralized Production on a grid designed for Centralized Production. Nothing that cannot be fixed with a little engineering.

      • Lisa

        Former Australian Solar Panel Billionaire Suntech on financial collapse.

        Australian entrepreneur, the former billionaire, dubbed the King of solar panel production which established Suntech world’s biggest solar power company is on the verge of financial collapse by Friday, today, New York time.

        Mr Suntech which came out of University of NSW Australia with a PhD in solar research and packed up professors from New South Wales University and established his own company in China, SunTech.

        Rumour is said that the Chinese government is forced to take over the company from Mr Suntech as he is no longer CEO; the Chinese government is removing him from CEO position of the company.

        Suntech’s future sent its New York-listed shares plunging on Wednesday after the rumour of the Chinese government takeover. Suntech revealed plans to shut its US plant in Arizona next month – just 30 months after its opening…

        It’s not clear how many financial investors being caught up in this financial collapse within Australia, or how many companies have purchased the product and no longer will receive the product for their customers, as large orders were purchased for Australian homes.

        The probability of these companies which install rooftop solar power in Australia may also collapse at the same time.

        • http://zacharyshahan.com/ Zachary Shahan

          The solar module market is a highly competitive market with too many contestants. Most will be out of business within a handful of years. It seems Suntech will be one of those. But that has nothing to do with the general viability of solar. It’s simply a natural part of market maturation. See: http://cleantechnica.com/2013/01/27/solar-industry-shakeout-what-it-means/

          • Kim

            How Could you say that given Suntech was the world’s biggest manufacture of solar panels beside Germany, to me the market has been saturated, as the market was limited to rooftop grid tied solar systems and the market has bottomed out, because the US tariffs and subsidies cuts like that in Australia, lead to the demise of the company which was completely dependent on subsidies in order to stay in business. Off grid marketing which has a bigger potential benefits for the industry hasn’t been promoted because unsubsidised.

  • Bob_Wallace

    “it will reshape the dynamics of the market”

    Steamers reshaped the sailing ship market. Cars reshaped the horse market. Computers kicked typewriters and adding machines to the curb. Remember when you took pictures with film?

    Utilities are going to have to adapt. If they can’t set themselves up as storage and backup providers that business will go elsewhere. They can either be smart like Fuji who started producing decent digital cameras or they can be like Kodak.

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