New modelling shows sun can shine on Australian solar power

Clean Energy Council
21 November 2008

NATIONAL: Australia is in a strong position to develop a thriving national solar industry over the next 20 years, according to a report into the renewable energy sector released today by the Clean Energy Council (CEC). The report, undertaken by Access Economics, provides a compelling economic case for the implementation of a gross national feed-in tariff in Australia.

"What this shows is that with the right policy and investment, there's a strong future for sustainable and profitable growth in Australia's renewable energy sector," said CEO of the Clean Energy Council, Matthew Warren. "Australia's share of the global solar market has fallen from seven per cent in 1992 to one per cent in 2007 - despite having the highest average solar radiation of any country in the world, Australia significantly lags behind other countries in its investment in the solar industry."

The report shows a gross national FIT would drive investment in solar PV systems by the commercial and residential sectors, assuming 3,000 MW of capacity is deployed, of up to $17.9 billion over the next 20 years (NPV at 5.7 per cent). Solar industries in other countries that have adopted a national gross feed-in tariff have developed strong industries that encourage take-up of solar through consumer earnings and cost savings.

"The report shows a gross feed-in tariff will be the trigger for strong investment - and growth - in the solar sector," Mr Warren said. "This kind of policy in Australia could help reduce residential and commercial demand for energy and help deliver electricity on hot sunny days when it is the most valuable. "As a result, the modelling suggests solar energy can defer investment in gas-peaking plans".

The Access Economics report records the sharp increase in deployment of solar panels in Australia since 2007 when the increased federal government rebate triggered increased awareness and affordability of the technology. The report also states Australia's carbon pollution reduction scheme (CPRS) and mandatory renewable energy target (MRET) may be insufficient to drive significant investment in the solar sector.

"A gross feed-in tariff is entirely complimentary to a CPRS and a 20% MRET, but it's important to note that currently, less than one per cent of the MRET comes from solar sources," said Mr Warren.