What is Australia’s Solar 30 30 30 plan?

Published: 11 November 2021

This week in solar: COP26 in Glasgow, Australia’s Solar 30 30 30 plan, cheap solar and energy storage updates.

Last week there was excellent news from the COP26 in Glasgow, where more than 40 countries pledged to remove coal from their power grids. The countries that signed the agreement will no longer be investing in new coal power plants, nationally or internationally, and their existing power plants will be closed by the 2030s. 

Unfortunately, many developed nations were absent from the pledge, including Australia – the 11th largest coal user in the world. Although there is a net-zero target for 2050, the Morrison administration didn’t announce any new commitments to cut emissions or increase the share of clean energy in the short term. The US, China and India were also among the countries who didn’t sign the pledge, and all are major coal users.

According to the International Energy Agency (IEA), the COP26 pledges have the potential to limit global warming below 2°C by 2100. Actually, the IEA updated its average warming forecast to 1.8°C by the end of the century, but this will only be true if countries meet their commitments. However, while there has been major progress at Glasgow, many experts agree that temperature rise must be limited below 1.5°C to prevent the worst effects of climate change.

According to the Global Carbon Project, based in Canberra, global emissions dropped by 5.4% in 2020 due to the COVID-19 pandemic. However, emissions could bounce back by 4.9% in 2021, reaching 36.4 billion tonnes by the end of the year.

Australia’s Solar 30 30 30 plan: A quick overview

Australia didn’t join the COP26 pledge to eliminate coal, but there is a promising outlook for solar power in spite of this. Last week the government unveiled its Solar 30 30 30 plan, led by ARENA: reaching 30% efficiency and an installed cost of 30 cents per watt by the year 2030. This would allow solar power to reach an electricity cost of only $15 per megawatt-hour in Australia (1.5 cents/kWh), which is two-thirds less than the present-day cost.

Solar power is already very affordable in Australia, and homeowners are paying less than $1 per installed watt thanks to the financial incentives available. For comparison, home solar systems in the US have a typical price of US$3 per watt (AU$4 per watt). In other words, a solar panel system in the US is 4-5 times more expensive than an equally-sized system in Australia.

  • At less than AU$1 per watt of solar, Australian homeowners are now achieving a payback period of less than five years.
  • When the cost of 30 cents/watt is reached, payback periods of less than two years will be common. If Australian electricity prices continue to rise, we could be seeing solar systems with a payback period of just a few months.
  • Currently, you can expect to pay around $5,300 for a 6.6-kW home solar system. However, a system of this size would cost less than $2,000 at 30 cents per watt.

The Australian government has also recognised the importance of electric vehicles in its decarbonisation plans, especially when there is a net-zero target for 2050. Lower solar costs would improve the business case for EV fleets while contributing to the green hydrogen industry. 

According to government projections, EVs could represent from 30% to 61% of new car sales in Australia by 2030, up from only 1% in 2019.  This includes battery electric vehicles (BEV), which can be charged directly with clean electricity, and fuel-cell electric vehicles (FCEV) powered by green hydrogen.

Cheap solar power: More energy storage systems

Home batteries and other energy storage systems can achieve synergy with solar panels, which only reach their maximum productivity for a few hours each day. A homeowner with a large enough battery can use solar power day and night, only using the grid as a backup when additional electricity is needed. However, energy storage systems are still relatively expensive, and this reduces their potential market.

If solar achieves an installed price of 30 cents/watt and an electricity cost of 1.5 cents/kWh, the business case for batteries would greatly improve. They can be charged at minimal cost with solar panels, and that electricity is then used at night. Batteries are also expected to become much cheaper by 2030, and a study by the International Renewable Energy Agency (IRENA) has forecast a cost reduction of over 60%.

With a lower installation price and cheap solar electricity to charge them, battery systems could become a standard feature in homes and businesses, just like light bulbs and air conditioners.

Latest solar data from the Australian PV Institute

On November 1, the Australian PV Institute (APVI) published a press release with updated data about the local solar industry.

  • Australia reached a solar capacity of 22.3 gigawatts during the second half of 2021, distributed among 2.86 million installations.
  • Between 2017 and mid-2021, Australia has tripled its solar generation capacity.
  • Australia has installed 360,000 rooftop solar systems in 2021 alone, which represents a 40% increase from 2020.
  • The Australian solar industry is now valued at $7 billion, and it has created over 25,000 full-time jobs, including 250 research and development jobs.

Australia deployed a record-breaking rooftop solar capacity of 3 GW in 2021: 1.8 GW were installed by homeowners, and 1.2 GW were installed on commercial and industrial buildings. Rooftop solar systems in Australia now have an accumulated capacity of 13 GW, which is 58% of the country’s total capacity, and 10 times higher than in 2011.

Thanks to all these solar systems, Australia has reached 810 watts per person according to the APVI. This is the highest solar capacity per capita in the world, and SolarPower Europe recently published a similar estimate of 826 watts per capita.

Home solar systems are not only more common but also larger than 10 years ago. The APVI reported that the average home solar system had a capacity of 8 kW in 2020, up from 4 kW in 2013 and 2 kW in 2010. The average price before subsidies is $1,520 per kilowatt of solar power, but this drops below $1,000 per kW thanks to the nationwide STC incentive.

  • Based on this value, an 8kW solar system has a typical price of $12,160 in Australia.
  • Assuming this system is installed in Brisbane, it gets 110 Small-scale Technology Certificates (STC) as of 2021.
  • Each STC sells for around $39, leading to a total incentive of $4,290.
  • Subtracting the STC incentive, the net price of this system drops below $8,000.

The APVI also published its PV in Australia report, in collaboration with the International Energy Agency (IEA). According to the report, Australia deployed 4.5 GW of solar power in 2020 alone, becoming one of the top 10 solar markets in the world. There was a 28% growth in 2020, even with the effects of the COVID-19 pandemic, and there were 2.69 million Australian homes with solar panels by the end of the year.

On average, one in every five Australian homes now uses solar power. The states with the highest percentage of solar homes are Queensland and South Australia, which are both approaching 40%. Utility-scale solar power is also growing fast in Australia, and the installed capacity increased by 10 in only three years. There were 740 MW of utility-scale solar capacity in 2017, and the APVI reported 7.4 GW by the end of 2020.

South Australia will have the world’s largest energy storage system

South Australia made headlines with the Tesla big battery in 2017. With a power output capacity of 100 megawatts and a storage capacity of 129 megawatt-hours, it was the largest battery in the world at the time of construction. There are now larger batteries in other parts of Australia and internationally, but SA will have the world’s largest energy storage system once more.

Last week, the Dutch company Photon Energy announced a 300MW solar and storage system with a record-breaking storage capacity of 3,600 megawatt-hours. The facility will use an innovative technology developed in Australia by Raygen:

  • The system uses both thermal and photovoltaic solar power.
  • A solar thermal system is used to heat up water, while a photovoltaic system is used to power chillers that cool water in a separate reservoir.
  • The temperature difference between both water reservoirs is used to power an organic Rankine cycle engine.

The facility will use 1,200 hectares of land that have already been acquired by Photon Energy, but their location hasn’t been revealed yet. Unlike a conventional solar farm, which generates most of its electricity in the hours around noon, this system can store hot and cold water to provide electricity 24/7.

South Australia is already generating record amounts of solar power relative to its consumption. According to SA Power Networks, during the last five weeks since September 26, there were five occasions where solar generation was higher than the total demand in their network, and the difference was exported to neighbouring grids.

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