As the global output of solar panels increases, Australia is set to benefit from an electricity price fall of 10%, a report from the think-tank Climate Energy Finance calculates.
The Solar Pivot report by analysts Tim Buckley and Xuyang Dong forecasts that “solar costs will halve again before 2030, underpinning an accelerating disruption of world energy markets and driving energy transition momentum”.
Global installations of solar panels hit a record 268GW in 2022 and are projected to reach 1000GW by 2030. Prices of polysilicon, which is used for making thin panel wafers, have gone down by two-thirds since December 2022. A combination of cost reduction in the raw materials and a rising number of installations is bringing competitive advantages to Australia in the renewables market.
With abundant land, sun and wind resources at its disposal, Australia is the sixth-largest solar market globally. The country leads the rooftop solar share by 35% as of 2022. However, China leads the renewables row by a huge margin, accounting for 40–60% of the annual renewable energy installations. Among other countries, the US, India and the EU are also increasing their investment in solar energy.
While the shift partly confirms countries’ net-zero and decarbonisation commitments, it is also hinged towards reducing dependence and countering China’s domination of the renewables industry.
“Whereas the US and European producers are announcing expansions [of] one-three GW per facility, China is announcing expansions of 20–30GW per facility,” the report reads.
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According to the report, the US Inflation Reduction Act, which sets aside $369bn for energy investments, is set to drive a fivefold increase in the yearly output of solar panels. It aims to reach 40GW by 2024 and then double the solar installations to reach 40–50GW each year till 2030.
Meanwhile, India has committed to 110GW of module manufacturing and levied an duty of 40% on solar module imports to encourage domestic manufacturing. Solar installations in the EU are expected to quadruple to 80GW by 2030.