The Australian solar boom shown no sign of slowing down, and mid to long term projections estimate that the renewable energy industry may grow to dominate the Australian power market in the coming decades.
The Australian solar boom that’s ongoing is only the tip of the iceberg, according to experts from Bloomberg New Energy Finance’s Market 2030 prognosis. This should not be surprising, since the Australian government has allocated billions of dollars for the development of technologies to fast track the use of solar power and create an Australian solar boom. Once fully implemented, the effects will be significant.
Future of Australian Solar Boom
Nearly 60% of the $55 billion budget that Australia set for the next 15 years is for the development of rooftop solar PV and related technologies. According to Bloomberg, solar PV investments will increase in the coming years. The most recent estimates experts have put out is by 2030, approximately 16 GW of rooftop solar will be installed in Australian homes.
Several reasons have been cited for the Australian solar boom, chief among them is Australia’s robust economy. Second, recouping the cost of installing the system will have been reduced to three years by that time, according to industry estimates. The third reason is that retail electricity prices are still high relative to the long term return on investment of solar panel prices. The development of affordable PV technology coupled with a shorter reimbursement period will encourage households to adopt solar power.
Several experts on solar energy agree with Bloomberg’s forecast on the Australian solar boom, and the consensus is that by 2030 $24 billion worth investments in solar power will pour in from the commercial and residential sectors.
Of course policy changes will have an effect regarding the time frame for the program’s implementation, which is why they must remain on track. Granting there are no major policy changes in the coming years, experts predict that utility scale PV will reach 8GW in the next 16 years. This will be propelled by the large-scale renewable energy target (LRET) with the rest due to demands in other territories.
An additional 6.4 GW will be constructed for the LRET, and once the project is completed in 2020, solar thermal is going to be next in line. Due to high demand in summer, gas will enjoy a surge around 2020, but the same cannot be said of coal. The prognosis is that Australian coal generation will fall 27% by 2020. Gas dependence is also projected to fall to 23% during that period.
Renewable energy on the other hand, will increase from 24% to 48%. Breaking down the figures, solar power will rise to 29% from 5% and wind power from 5% to 10%. Fossil fuel consumption is expected to fall by 20% as well. However, experts are united in saying that increased use of solar power in Australia will have a significant effect on Asia as they will also adopt the technology resulting from the Australian solar boom.
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Retail Electricity Prices
As retail electricity prices in Australia fall and solar power becomes a viable alternative in the midst of the Australian solar boom, other Asian countries will follow suit, severely affecting the coal generation sector. By 2026, the capacity build for Asia Pacific is going to be $3.6 trillion. $1 trillion will go to solar energy development and similar sums for wind and hydro capacities, and the effect won’t just be felt by the coal industry but the nuclear sector as well.