- Posted by: criss
- Category: Global PV Market Insights Report
1. Brief Intro-Australia
Australia is located between the south Pacific Ocean and the Indian Ocean, surrounded by sea. With a land area of 7.692 million square kilometers and a population of 25.2 million which is considered as a Sparsely populated country, Australia is the most developed economy in the southern hemisphere and the 12th largest economy in the world.
The main industry of Australia is mining. Its coal reserves rank the fourth in the world. With high calorific value, low sulfur content, good quality and easy mining, Australia is a big exporter of coal resources. The main export market of coal and steel of Australia is China, which led to a rapid recovery of its economy after the 2008 financial crisis along with the great development of China’s infrastructure. Since 2014, China’s infrastructure speed slowed down, and Australia’s economy also entered a relative adjustment.
Australia has the world’s best sunshine irradiation resources, most of its areas belong to the tropical grassland climate and tropical desert climate, drought and less rain, sunshine. The national radiation exposure is 1300-2400kwh/square meter, which is much better than China, the United States, Japan, the European Union and other major economies in the world.
However, the excellent traditional energy resources have made the Australian government lack interest in the development of renewable energy, and successive governments have made slow progress in the development of renewable and clean energy, including the solar industry. Nowadays climate issue has increasingly become an international consensus, which has been criticized by international environmental protection organizations.
In contrast to the few efforts made by the Australian government, the residential solar industry in Australia has been developing vigorously. In 2019, Australia has become the world’s largest solar user-side market, accounting for 30% of the global demand. At least 20% of households have installed home solar system. The main reason is the excellent radiation conditions in mainland Australia, as well as the high electricity price. In addition, different from the Canberra government, Australian state governments give more care and support policies to the solar industry and other renewable energy industry.
In June 2015, the Australian government launched the renewable energy development target plan (RET plan). The plan is divided into two parts, the small-scale renewable energy program (SRES) and the large-scale renewable energy target (LRET). Its core content is to set a target for new energy generation by 2020 and launch “Certificates” on this basis. Both large-scale renewable energy power plants and small-scale residential solar power stations can sell “renewable energy generation quota” to traditional energy power stations to make profits. Similar to carbon emissions trading, a secondary market ensures that all power stations meet the government’s quota for generating electricity from renewable sources. The government’s short-term goal is to generate 33,000 GWH of electricity from large-scale renewable sources by 2020, accounting for about 23.5% of total electricity generation. The policy will ends in 2030.
2. Australia Solar Power Development
The share of electricity generated from renewable sources in Australia’s domestic power generation has risen steadily over the years, from 8% in 2000-01 to 17% in 2017-18. The government plans to increase the proportion of renewable energy generation to 23.5% by 2020.
Among the renewable energy generation, hydro power has always been the largest clean energy category. Since 2010, the proportion of solar and wind power has increased rapidly. In the 2017-18 fiscal year, the proportion of hydro power power generation in the total power generation of new energy has decreased to 36%. Wind power generation accounted for 34%, ranking the 2nd; solar ranking the 3rd by 9929.9GWH, accounting for 22%.
In the 2017-18 fiscal year, of the total solar power generation of 9929.9GWH, the utility installation accounted for 10%, and the residential and C&I sector accounted for 90%. The solar industry in Australia is very concentrated on distributed user side.
Since 2010, the installation capacity of solar in Australia has been rising rapidly, with an average annual installed capacity of over 800MW. Especially in 2017 and 2018, the annual installed capacity reached 1.4gw and 3.8gw respectively, making Australia one of the largest solar markets in the world. It is expected that the number of new solar installations in Australia will reach a record high of 4.5GW in 2019.
Among them, from 2010 to 2013, the largest number of installations were residential use under 2.5kw, and the number of non-residential solar installation increased every year. In 2018, in particular, the installation of large-scale solar power plant increased rapidly, which is the main reason for the rapid increase in the number of new installations in 2018.
3. Related Policy and Price
- Solar Development Policy
The June 2015 renewable energy development target (RET) is divided into the small-scale renewable energy plan (SRES) and the large-scale renewable energy target (LRET). Its core content is to set a new energy generation target by 2020, and to launch a new energy generation indicators (Certificates) on this basis. Solar power stations can sell “certificate” to conventional power stations, making a profit as to get a subsidy. The government’s short-term goal is to generate 33,000 GWH of electricity from large-scale renewable sources by 2020, accounting for about 23.5% of total electricity generation. The policy ends in 2030.
Including New South Wales and Queensland, Australian state governments have corresponding solar support policies, mainly through special funds and financing support.
- FEED-IN TARIFF
Australia has removed FIT subsidies for solar since 2013. At present, solar is connected to the grid subsidy free, but the electricity price in Australia is very high. In recent ten years, the electricity price index has soared 106%, the average electricity price is 0.25-0.30AUD/KWH, and the average peak residential electricity price is 0.55AUD/KWH, ranking the third in the after-tax price of KWH in the world, only second to Denmark and Germany.
4. Solar PV Import from China
According to the PV module export volume data generated by GNEI, in the whole year of 2018, China’s PV module export volume from Australia was 4.11GW, and the monthly export volume was stable between 290MW and 590MW. In April 2019, the export volume was 517.7MW, ranking the third in the export volume of solar modules from China.
Looking into the type of solar modules, the Mono Module is now becoming more and more popular than ever before since 2016, and 72 cell module is the most used type, because the installation of ground mounted solar power plant is taking a much bigger share compare with residential installation.
Australia has the best geographical environment of solar resources in the world. Although the Australian government has been excessively dependent on its coal resources for a long time and paid less attention to the development of renewable energy, the distributed solar for residential and C&I sector have been developing steadily for many years and it is the largest user-side solar market in the world.
In 2015, the Australian government’s renewable energy development plan was released, and large-scale solar plants were gradually put on pipeline in 2018. It is expected that the total number of new solar installations in Australia in 2019 will reach 4.5GW, which strongly supports the export volume of Chinese solar modules in Australia.
- On May 18, 2019, the results of the Australian government election were announced. The labor party, which had been widely expected to win, was lost. In contrast to Labor party, the new winning party is more supportive of the traditional energy industry.
- By October 2019, Morrison’s government has not set a renewable energy development target at the federal level after 2020. The renewable energy target set by Australian states will fill the relevant policy gap and focus on state policies and implementation.
- The state of Victoria introduced the Solar Homes policy in August 2018 to provide incentives for homeowners to install solar. But because demand is too big, total allowance amount is limited, dweller nurtures the habit that applies for again after allowance to undertake installing gradually. The monthly subsidy amount will be snapped up on the first day of the month. After a few days of explosive new installation at the beginning of the month, the number of installations for the rest of the month will be basically zero, which makes the work of photovoltaic installers very unstable. Since May 2019, the chaos caused by the policy has become increasingly serious. In September 2019, the Victorian government reformed the Solar Homes policy, and we will follow up to see the practical effect of the policy after the reform.
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