Surging Power Bills Spark Rush for Household Solar in Australia

Australia, one of the world’s biggest users of rooftop solar panels, likely added the most new capacity on record last year as electricity users sought to ease escalating power bills.

A preliminary estimate by Australia’s Clean Energy Regulator of 1.05 gigawatts installed last year would be a record for the country, the government body said in an emailed statement Friday. While subsidies and generous feed-in tariffs helped boost growth earlier this decade, last year’s gains were driven by users seeking to sidestep a surge in the cost of electricity and a push by vendors into the commercial sector, according to Bloomberg New Energy Finance.

“We are on track to have had the biggest year yet for installed small-scale solar capacity” in 2017, according to the regulator statement. “What we have seen is that homeowners and businesses continue to embrace solar panel systems, which is driving increased levels of capacity across Australia.”

The shift to solar may have quickened as power prices spiked last year on tight supplies of coal and gas, which fuel the bulk of generation capacity on the national electricity market. BNEF estimates the cost of solar systems for residential customers has declined 44 percent since 2012.

“The payback period for residential solar is now as low as it was in 2012, when super-generous feed-in tariffs and subsidies drove a massive boom in installations,” said BNEF’s Sydney-based analyst Annabel Wilton.

Rooftop solar will account for as much as 24 percent of Australia’s electricity by 2040, according to BNEF’s 2017 New Energy Outlook. When combined with small-scale batteries and demand response initiatives, up to 45 percent of the country’s total power capacity will be located on owners’ properties — known as behind-the-meter-capacity — by 2040.

But fossil fuels still hold sway for traditional power producers, even as they look ahead to a less carbon intensive future. Sydney-based Alinta Energy Holdings Ltd., which completed the acquisition of the 1,000 megawatt coal-fired Loy Yang B power station on Monday, sees the purchase as a way to lock-in retail customers now to gain later in the country’s transition toward cleaner power.

“The reality is that it’s great to have a vision to be clean and green, but if you don’t have any customers you don’t have a ticket to the game,” Alinta Chief Executive Officer Jeff Dimery said in a phone interview Monday.

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