A forecast of a 35% rise in power prices by the boss of Alinta Energy, Jeff Dimery, has triggered a burst of inquiries about solar panels, according to the founder of SolarQuotes.
“One of our traffic guys came to tell me, ‘traffic is off the charts’,” Finn Peacock said. “It’s completely driven by the media.”
Dimery, whose company runs the Loy Yang B coal-fired power station in Victoria, gave the estimate to the AFR’s energy conference on Monday. A day later the treasurer, Jim Chalmers, described rising energy costs as the most “problematic aspect of our inflation problem over the course of the next six or nine months”.
SolarQuotes saw a similar spike in interest in June, typically a quiet month for the solar industry, after regulators announced looming electricity tariff increases of as much as 20%. The company fielded more than 10,000 inquires, roughly double the level of June 2021 and the most for any month ever.
That spurt in inquiries was an early indicator of an upturn in the solar PV industry. Installations picked up in August and particularly September, according to Tristan Edis, a director at the consultancy Green Energy Markets.
He said data for the two months was closer to the boom period of 2020 and 2021, marking “a notable recovery from the prior months of 2022 where numbers were substantially down from the levels for the two previous years”.
Green Energy Markets has some new data showing installations of solar PV picked up in September. pic.twitter.com/w4xmxChfE2
— Peter Hannam (@p_hannam) October 12, 2022
Total installed capacity in Australia in September was 253 megawatts, or about 17% higher than the year-to-date average, Green Energy Markets data shows. The bounce-back in demand will be welcomed by an industry that had begun to retreat from record numbers for new capacity added in recent years, Edis said.
Residential demand was up 13.8% in capacity terms, while commercial demand rocketed by about a third.
“It does seem to indicate there’s a recovery,” he said. “If anything, [companies] were cutting back staff before the surge in interest.”
Across the country, new solar PV installations have tend to pick up in recent months...and the speculation about future power prices increases will nudge more holdouts to get panels (or expand the systems they have). (Source: Green Energy Markets.) pic.twitter.com/ShXVuxIU2o
— Peter Hannam (@p_hannam) October 12, 2022
Australia has the highest proportionate uptake of solar PV in the world, in part because of relatively high levels of sunshine but also because of high power prices. Fluctuating policies have also contributed to what Dylan McConnell, a contributor in new book The Superpower Transformation, dubs a “solar coaster” of booms and busts in the sector.
With solar panels already on about a third of houses in some states, an increasing amount of power is being generated at home. Last month, the region of WA including Perth saw rooftops supply almost three-quarters of demand, nudging overall grid demand to a record low.
Edis said that while there were still many suitable rooftops for solar, demand may cool again. One drag will be the rising cost of new systems – in part because of supply chain issues in China – and the “pittance” being paid to households for the surplus energy supplied back into the grid.
Labor shortages, too, will add to installation costs as they are doing in many parts of the economy, he said.
Mild and sunny conditions on Saturday saw WA's minimum operational demand record drop 35 MW from the previous (12/09/22) to 707 MW at 12:30pm. At the time, estimated rooftop solar was providing 71% of underlying demand. #Springtrend 🌻 pic.twitter.com/cMRSttJSaB
— AEMO (@AEMO_Energy) October 10, 2022
Peacock, of SolarQuotes, said that while system prices had increased, they were “not putting people off” yet. With the media speculation about how high electricity tariffs might go, buyers see panels as “an insurance against further price rises”, he said.
The size of systems is also ticking up, with an average unit now about 8 kilowatts of capacity. Also on the rise are inquiries about batteries to accompany the panels to store surplus power.
In October so far, about one in five inquiries about solar panels also include a query about batteries, up from about 12% a year ago.
Another pointer to the way the industry is headed is the increase in electric vehicle purchases. Tesla’s Model Y was the third-most popular car sold in Australia last month with the company selling almost 6,000 all-electric vehicles, according to the Federal Chamber of Automotive Industries.
Peacock said EV owners, who often already have solar panels, are becoming a new source of inquiries because they find their current systems are too small. That shift could generate fresh demand for the sector in the future.
