Growth in rooftop solar slows due to lockdowns and supply chain issues
Rooftop solar took a hit in 2021 with the industry growing a third less than expected thanks to lockdowns and supply chain disruptions, despite still showing strong growth overall.
More than 3m households and small businesses across the country now have solar panel systems installed, with the milestone reached in November.
According to registration data provided by solar consultancy company SunWiz, 3.24GW of new solar capacity was added across the country last year, representing 10% growth on the previous year.
These figures include small rooftop systems of less than 100MW registered by homeowners and small businesses, and do not include large, industrialscale solar installations.
Queensland now has the most installed capacity, with 4,483MW, closely followed by New South Wales (4,256MW) and Victoria (3,839MW).
Australia continues to lead the world for solar installations with a total installed capacity of just under 17GW nationwide.
The growth rate was lower than in previous years, with 2021 bookended by a surge in installations in March and December, and a drop off in between.
Warwick Johnston, managing director at SunWiz, said the third-quarter slump was caused by the pandemic as lockdowns stopped installers from entering people’s homes, while supply chain problems meant wait times and shipping costs grew.
He expected these issues to continue in 2022 but for demand to remain strong, as people sought to upgrade their old solar systems to generate enough capacity to support an electric vehicle in the future.
“There’s 8.5m dwellings in Australia and we’re reaching a significant fraction of them already,” Johnston said.
“Even in economically uncertain times people find that solar is as good an investment they can make.
“It’s a safer bet than betting on crypto.”
Separate data provided by Tristan Edis, an analyst with Green Energy Markets, showed photovoltaic solar upgrades were much stronger in 2021, and were anticipated to grow through to 2025.
Edis said while previous forecasts had anticipated 3,600MW of installed capacity in 2021, roughly a 15% increase compared with 2020, he agreed lockdowns had “put a big dampener on the market”.
Despite these short-term constraints, he said it was possible there was an “underlying slowdown” at work as states wound back solar feed-in tariffs that pay people for electricity fed into the grid.
“The economics for solar systems have deteriorated across most states over the past two years as feed-in tariffs have been dropping at a faster rate than the purchase cost of a solar system, plus retail electricity prices have begun declining as well,” Edis said.
“We have been expecting this would eventually flow through to reduced demand for solar systems, although this slowdown has not come as quickly as we had originally expected, but there are signs that it is now taking place.”
Edis said while supply chain issues and a bump in the price of solar panels from manufacturers in China may dent sales in 2022, this was only a “temporary phenomenon” that “shouldn’t affect things beyond this year”.
John Grimes, chief executive of the Smart Energy Council, said the industry was still bullish about its prospects.
While the anticipated 15% growth rate seen in previous years may continue to be throttled by supply chain issues in 2022, he said demand remained strong.
“People trust in solar now. There’s no question about whether it works, or ‘will it cut my power bill?’ – those things have been resolved. The industry’s mature,” Grimes said.
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“If you take the cost of a solar system … over its 20-year life period, the effective cost you’re paying is .5c per hour. If you were a typical customer, say in Sydney, you’d be paying .35c per hour.
“All in all, we expect growth year on year. The question at the moment is really how big is that growth going to be.”