What are the Trends and Forecasts for Solar Energy in Australia?

Australia is already a recognised leader when it comes to renewable energy and sustainability and the demand for solar energy and environmentally conscious behaviour is continuing to grow.

In 2021 alone, solar power capacity is expected to grow by 20% in Australia.

New research conducted by Enness Global Investors reveals that, by 2027, over 80% of Australians will be living in communities where the energy supply is 100% derived from renewable sources such as solar and hydro power.

The report, titled ‘The Future of Energy in Australia’, forecasts that the demand for solar power will increase as the benefits become more widely known.

The report also notes that, by 2027, around 80% of the dwellings in Australia will be living in communities that are either fully or partially powered by renewable energy sources.

Based on detailed market research and analysis of historic data, the report examines the trends and future direction of energy (electricity and gas) in three key markets:

Sunshine states

The report highlights that, in 2021, about 90% of Australia’s total electricity demand will be met by greenfield solar power projects.The major contribution of solar power to the energy mix is expected to be in the production of electricity during the day, when the sun is shining. This will be supplemented by wind power at night.The report estimates that, by 2027, over 250GW of solar power will be installed across Australia. This is expected to provide more than enough clean power for the country’s annual electricity requirements (around 250 million kWh).

It is also anticipated that, by 2027, the number of people living in areas where solar power provides at least part of the supply will grow from around one million to over six million – a rise of around 300%.

Electricity market

The growth in demand for solar power will be focused on large-scale solar parks, which are currently under construction and expected to come online between 2022 and 2025. These parks will consist of hundreds to thousands of solar modules connected to each other and to the grid through a centralised inverter. The largest solar parks will be able to generate enough power for some of the nation’s largest buildings, including hospitals and universities.

The report indicates that, in 2021, around 22GW of new capacity will be installed throughout Australia. Of this, about 11GW will be in the form of large-scale solar parks.

In 2022, the report forecasts that the demand for large-scale solar parks will increase to 27GW. This will be followed by a decline in demand to 21GW in 2025. However, the report suggests that the total demand for solar power may increase by 50% in 2030.

Gas market

The demand for natural gas will increase due to its increasing importance as a fuel for electricity generation. New pipelines will need to be built to bring gas from the mainland to the island states, which currently have to purchase large amounts of LNG from overseas. This will add to the cost of living for residents of the island states.

The report indicates that, in 2021, around 19.5GW of new capacity will be installed across Australia. Of this, over 10GW will be in Queensland, where the construction of new power stations is already well underway.

The Australian government is committed to reducing the country’s greenhouse gas emissions, which are currently at a record level. In 2021, it legislated that all new buildings must be zero-emission by 2032. This presents a significant barrier to the conventional building industry, which had been relying on the use of fossil fuels in their products. This and the subsequent phase-ins will effectively force all new buildings to be zero-emission buildings. It also mandates that existing buildings are retrofitted with solar panels or powered by renewable energy sources.

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