3.2 STC Factors impacting supply

Solar PV and installations

Installed rooftop solar PV capacity for Q3 reached 755 MW, the lowest quarterly capacity for 2021. This is, nevertheless, a strong result given the COVID-19 lockdowns in some jurisdictions.

Typically, capacity installed each quarter progressively increases throughout the year. This trend was not observed in Q3 with installed capacity reducing by 5% from Q2 (see Figure 3.2). Compared to Q2 2021, installed capacity in New South Wales and Victoria decreased by 19% and 3% respectively, while Queensland and South Australia increased by 5% and 8% respectively.

Figure 3.2 Small-scale solar PV installed capacity (MW), March quarter 2020 to September quarter 2021

In New South Wales, from mid-July, solar installation work was restricted for two weeks in Greater Sydney including the Blue Mountains, Central Coast, Wollongong and Shellharbour. From the end of July, solar installation was permitted in occupied premises, including residential homes in Greater Sydney areas, with certain conditions including zero contact between workers and residents and limits to worker numbers. From July to September there were multiple stay at home orders in many local government areas where installations were completely restricted.³⁵

In Victoria, restrictions eased from the end of July permitting rooftop installations on occupied premises under specific conditions. However, installation work was completely put on-hold from the third week of September for two weeks.³⁶

As shown in Table 3.1, Queensland led rooftop solar PV uptake for Q3, followed by New South Wales and Victoria. With these three jurisdictions accounting for 76% of quarterly capacity and restrictions removed, the outlook for the remainder of 2021 and into 2022 is looking strong.

Table 3.1 Estimated rooftop solar PV (<100 kW) capacity by state, September quarter 2021
	Estimated capacity (MW)
QLD	212
NSW	202
VIC	159
WA	87
SA	71
ACT	12
TAS	9
NT	4
Total	755
Note: Totals may not sum due to rounding

Installed capacity expectation for 2021

Strong growth in installations over the first half of 2021 combined with a modest Q3 has resulted in a total of 2.3 GW capacity installed in 2021 – a 14% increase from the 2 GW installed over the same period in 2020 (see Figure 3.2). If the typical seasonal pattern for Q4 holds, total additional installed capacity for 2021 is likely to set a new record of circa 3.2 GW, exceeding Clean Energy Regulator minimum expectation of 3GW earlier in the year (see Figure 3.3).

Figure 3.3 Small-scale solar PV installations and installed capacity (MW), 2010 to 2021

While the 755MW capacity installed in Q3 2021 is comparable to the 749MW in Q3 2020, the number of installations decreased by 4% over the same period – 89,751 in Q3 2021 compared to 93,664 in Q3 2020. The strong result for Q3 2021 is attributable to an increase in average system size, up from 7.99kW to 8.42kW over the same period (see Figure 3.4).

Figure 3.4 SRES installations and average system capacity (kW), March quarter 2019 to September quarter 2021

The increase in average system size is attributed to a growth in the number of systems installed in the 10kW to 15kW band. While systems within the 5kW to 10kW band continue to make up the bulk of installs under the SRES, the share of installed capacity from this band has decreased from 75% in Q3 2020 to 70% in Q3 2021. On the other hand, the share of systems in the 10kW to 15kW band has increased from 10% to 16% over the same period (see Figure 3.5).

Figure 3.5 SRES share of installed capacity by system size band, March quarter 2019 to September quarter 2021

Rooftop solar PV generation

2021 has seen record generation for rooftop solar PV. The generation capacity from all rooftop systems set a new record at 9.1 GW at midday on October 6 contributing more than one-third of the total generation mix in the National Energy Market over a 30-minute dispatch interval.³⁷

Generation from rooftop solar PV systems peaks during the November to January period, with the share of generation from rooftop solar PV following the same seasonal pattern (see Figure 3.6). With over 13 GW of rooftop solar PV systems installed in the NEM states by the end of Q3, the actual contribution of distributed energy sources could potentially meet over one-third of NEM demand in late spring and early summer months during periods of high renewable generation. AEMO suggests rooftop solar, alone, could account for up to 100% of state demand in South Australia in certain time periods this spring, and up to 77% of national grid demand by 2026.³⁸

Figure 3.6: Generation from rooftop solar PV (GWh) 2018 to 2021³⁹

As the average size of rooftop solar PV system increases (from 7.2kW in 2018 to 8.4kW in Q3 2021), increasing level of generation from these systems may see more shifting of load to daylight hours and greater utilisation of storage.

Looking ahead

The Clean Energy Regulator, with the support of the Department of Industry, Science, Energy and Resources (DISER), led a review into the rooftop solar PV sector to address consumer issues, defective installations and safety and quality concerns within the sector.⁴⁰

The Integrity Review of the Rooftop Solar PV Sector (the Review) made 13 recommendations to improve integrity, accountability and better protect consumers in the rooftop solar PV sector. The Australian Government accepted 12 of the 13 recommendations (one recommendation noted) and has committed $19.2 million to implement the Review’s recommendations.⁴¹ Consultation on an exposure draft of proposed amendments to the Renewable Energy (Electricity) Regulations 2001 closed on 12 November 2021. The proposed amendments addressed the Australian Government’s response to the Review.

Solar panel supply concerns

Concerns have been raised regarding solar panel supply and possible price increases in the near future, partly owing to a disruption of polysilicon supply, shortage in solar panel supply from Chinese factories due to power crisis⁴², strong demand of solar installations and global price increase in shipping costs.⁴³ Claims about panel supply issues and price increases were raised after COVID-19 first emerged in early 2020. Liaison with industry does not point to this being a universal concern. Consumers should shop around by obtaining several quotes before settling on a solar panel system.

The Clean Energy Regulator is aware of concerns about forced labour in the polysilicon supply chain and will, along with the Department of Foreign Affairs and Trade, continue to monitor the situation.