While 2016 began with the traditionally slow period in January, there were steady installations of small-scale systems each month for the rest of the year, and a number of key milestones were reached.
Households and businesses continued to embrace renewables in 2016, installing another 182 173 small-scale systems.
As a result, the Small-scale Renewable Energy Scheme passed the following significant milestones in 2016:
In 2016 a further 182 173 new small-scale systems were installed, bringing the total to 2 661 839.
A total of
182 173 small-scale systems were installed:
127 333 solar panel systems
39 806 solar water heaters
15 025 air source heat pumps, and
9 small-scale wind installations.
Together these small-scale systems can generate or displace 10 million megawatt hours of electricity—enough to power 1.6 million average Australian households.
The capacity of small generation units installed in 2016 was 707 megawatts. The combined capacity of all small generation units under the Renewable Energy Target is now 5426 megawatts.
Overall, the number of small-scale systems installed in 2016 was less than in 2015. This continues the gradual downward trend in the number of new installations each year since 2013 as shown in graph 3. However, as discussed below, the average capacity has increased.
In October 2016, the routine installation of a household solar water heater in the New South Wales town of Weston signalled a major milestone: one million solar water heaters and air source heat pumps installed in Australia.
This demonstrates continuing strong interest from households in participating in the Small-scale Renewable Energy Scheme, and enjoying the associated financial and environmental benefits.
The scheme creates a financial incentive to install small-scale systems such as solar water heaters and air source heat pumps.
An average household can use around a quarter of its total energy on heating water, so solar water heaters reduce energy bills while avoiding greenhouse gas emissions.
While solar panel systems account for most of the small-scale systems installed under the scheme, solar water heater technology is also proving popular with households and businesses. With prices for these systems reducing, these systems are expected to continue to be popular with consumers.
Around 70 per cent of the small-scale installations in 2016 were small-scale solar panel systems. Most of the remaining 30 per cent were solar water heaters and air source heat pumps.
The average capacity of small-scale solar panel systems continued to increase in 2016 from 5.0 kilowatts in 2015 to 5.6 kilowatts in 2016.
The increase in average capacity reflects more investment in commercial-sized solar panel systems of between 10 and 100 kilowatt capacity. Examples include systems installed in industrial estates, schools, retirement villages and hospitals. There is also a gradual increase in the size of standard household systems. The continued reduction in the cost of solar panel systems is likely to be contributing to this increase in capacity. Also of note was an increase in the number of air source heat pumps installed in 2016 compared with 2015, rising from 9922 to 15 025.
The Small-scale Renewable Energy Scheme does not include incentives for battery storage30, however, this is an emerging area attracting significant interest from the market.
The Battery Market Report from SunWiz31 released in February 2017 states that 6750 battery systems were installed in 2016, able to store a total of 52 megawatt hours. Further, the report outlines that the industry expects the market to triple in the coming years, with at least 20 000 installations storing more than 170 megawatt hours.
We validated 16 111 973 small-scale technology certificates during 201632.
This is an increase from 15 928 663 small-scale technology certificates validated last year33. The increase may be influenced by the reduction in the deeming period that begins in 2017, along with the increase in commercial-sized systems. Graph 4 shows that most certificates validated were for solar panel systems.
Australia has the highest small-scale solar panel rooftop penetration per capita in the world34.
A number of factors are driving this, including Australia's high levels of solar energy, national wealth, a well-developed solar industry and government incentives.
A range of commercial factors have also influenced the uptake of small-scale installations and will continue to over the forward years, including:
This suggests that the small-scale solar market will continue to be strong for many years. The Australian Energy Market Operator recently conducted a detailed review of the National Electricity Market and forecasted that small-scale solar panel systems will continue to grow strongly, increasing 350 per cent from 2016 levels by 2035–3637.
This was the last calendar year that the 15-year deeming period was available for solar panel system installations. From 2017, the deeming period will reduce by one year, every year. This will reduce the number of small-scale technology certificates that may be created each year until the scheme ends. This provides a predictable path and certainty for industry.
As system costs continue to fall year-on-year, purchasers are unlikely to see any price impact from the gradual change in deeming, as system prices are also expected to continue to fall year-on-year.
In effect, the same reducing incentive applies to the Large-scale Renewable Energy Target, with renewable energy power stations accredited in early 2017 only able to create certificates for 14 years.
'Providing reliable, affordable, cleaner supplies of energy has never been more important than it is today.'
30 Participants in the Small-scale Renewable Energy Scheme are encouraged to voluntarily disclose when a system has been installed with battery storage as part of their application for small-scale technology certificates. The Clean Energy Regulator collect data for installations of small-scale solar panel systems including those with concurrent battery storage but do not collect data on existing solar panel systems that have batteries installed at a later date.
31 For details, see 2017 Battery Market Report,
32 Small-scale technology certificates can be created up to 12 months after a system is installed. This means final figures for installations in 2016 will be slightly higher once all relevant data is available. For up-to-date information, see
Postcode data for small-scale installations.
33 There was an error in the
2015 Renewable Energy Target Administration Report and Annual Statement, which has been resolved in this report.
34 International Energy Agency, Renewable Energy Medium-Term Market Report 2016.
35 Figure 10, National Electricity Forecasting Report, Australian Energy Market Operator, June 2016
36 Future energy storage trends, CSIRO, September 2015,
37 Figure 10, National Electricity Forecasting Report, Australian Energy Market Operator, June 2016
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