Another Record-Breaking Year For Solar Power In Australia

Image: MariaGodfrida

Australia’s Clean Energy Regulator estimates 1,600 megawatts (MW) of small scale solar capacity will be installed this year, a 44% jump on 2017. It may wind up being more and even at 1,600MW, it will be another record-breaking year.

In its small-scale technology certificate market update for October 2018, the Regulator said its projections don’t take into account the potential impact of recent announcements by state governments. These include Victoria’s Solar Homes rebate.

The revised estimate is a significant increase on its May 2018 projection of 1400 MW.

More than 135,000 small-scale solar power systems with a total capacity of 922 MW had been installed as at 27 September 2018 says the Regulator. This represented +28% in installation numbers and +47% in total capacity compared to the same period last year. The figures are based on creation of Small-scale Technology Certificates (STCs) and there’s a 12- month creation period for STCs, so numbers attributable to the period will rise.

STC Prices Softening

Small-scale Technology Certificates form the basis of Australia’s major “solar rebate“, reducing the up-front cost of a solar power system by thousands of dollars. Their value fluctuates with market conditions.

The Regulator notes STC prices have gradually softened since the middle of July, closing at $34.55 (based on data sourced from TFS Green) at 27 September 2018. The STC spot price was $34.90 at the same time in 2017. The maximum possible value of an STC is $40 and this year has seen the price as high as around $38.

SQ’s Ronald wrote on the impact of falling STC prices on the solar subsidy in August last year when the price was even lower (~$31). Last year’s slump caught some solar installers off-guard, but no doubt the lessons of 2017 have been heeded by many this time around as STC values have decreased. The big difference this year (so far) is the reduction has been more gradual, whereas in 2017 STC prices dropped from $37 to $30 in just a couple of weeks.

Source: Clean Energy Regulator | Click for larger image

The Clean Energy Regulator says if the STC creation rate continues to increase, the surplus is estimated to reach over 10 million following quarter four surrender and remain at a high level well into next year.

The Regulator’s Small-scale Technology Certificate Market Update – October 2018 can be viewed here.