There’s a sunny future ahead for rooftop solar power: here’s why


Curtin University Study Bernhard Mitchell, UNSW Australia

Over the past five years the world has seen a dramatic fall in the cost of solar energy, particularly rooftop solar panels or solar photovoltaic power. It is now a real alternative and considerable player in the power markets.

In Australia more than 4 gigawatts (peak generation capacity) of solar panels are mounted on more than a million Australian roofs to date, adding up to about 7% of Australia’s electricity generation capacity.

As solar panels do not always produce all the electricity they possibly can, rooftop solar today contributes around 2% of Australia’s total electricity generation. But in some states during the day, solar’s contribution already reaches double digits. You can watch solar generation live here.

But what’s next for rooftop solar? It’s likely that costs will continue to fall, eventually making solar the dominant source of electricity in many parts of the world including Australia. Here’s the evidence.

Falling costs

The following 2014 graph from investment bank Bernstein Research shows just how fast the cost of solar has fallen compared to other energy sources.

Bernstein Research
Bernstein Research comparing the cost for a million British thermal unit (mmbtu) of various liquid fossil fuels and solar EIA, CIA, World Bank, Author provided

The graph plots the price for one million British thermal units of various fossil fuels and solar power. It shows that the price for solar energy came down dramatically in comparison to fossil fuels and has just started to undercut the price for some of these such as petroleum and liquefied natural gas (LNG).

Currently, solar panels in Australia produce energy at a cost of A10c per kilowatt hour or less, and it is likely that by 2020 this will fall to A6-7c per kilowatt hour or less. This puts solar power into a very competitive spot within the next five years.

Solar panels a cheap commodity

We can also look at the representative German spot-market price of solar panels, as in the following graph sourced from the Fraunhofer Institute for Solar Energy Systems ISE.

Solar Inflation Chart
The more solar panels are made, the cheaper they become. Fraunhofer ISE, Germany, Author provided

This shows that as the cumulative production of solar panels doubles, the price is reduced by about 20% – prices are now 40 times lower than they were 30 years ago.

This is known as the “learning curve”, and can be used to predict the future cost of solar panels, although it can’t predict the exact year when a certain price will happen as the production volume is correlated to market and policy forces.

Fundamentally, falling manufacturing costs are driving this trend, in turn driven by improving manufacturing techniques. By 2019 it’s likely that manufacturing costs for solar panels will reduce by 30-50% again.

Already today solar panels only cost around A60c per kilowatt peak capacity in Australia, and the cost of the panels no longer dominates the cost of installing a solar system on a roof or the ground. Other installation costs – such as mounting and labour – are more difficult to reduce, such that further installation reductions may be more challenging and slower.

To enable further cuts to the price of solar energy, we need to foremost look at improving the efficiency of solar panels, which will most directly lower the total cost for solar power.

Cut costs by increasing efficiency

Solar panels don’t convert all the sun’s energy into electricity. What proportion they convert is known as efficiency.

Efficiency is the most important factor in reducing the costs of solar – because the greater the efficiency of your panels, the fewer materials you need per amount of generated energy (that is, per kilowatt hour).

Solar Efficiency Chart
Efficiency is increasing across all solar panel technologies. Author provided

This graph above (from the US National Renewable Energy Laboratory) shows that all solar panel technologies have been getting more efficient. Currently commercial solar panel efficiencies are from 16% to 21%, but recently a new record of 46% was set in Germany. University of New South Wales has achieved efficiencies of 40%. So there is a lot of room for improvements generally, but also for current commercial solar flat panels.

Solar panel technology may be the technology with the greatest potential to improve efficiency compared with other renewable technologies.

What does the future hold?

We can sum all of this up by looking at how much energy goes into producing solar panels versus how much they produce.

A recent study has shown that in five years a solar panel will produce enough energy in six months to pay back all the energy used in manufacturing it. That means after six months the panels will be a net source of energy.

This is known as energy return on energy invested – and we can compare it across a variety of energy sources. The energy return of oil and gas is declining, and solar is catching up. By 2030 solar will likely surpass oil and gas.

So from whatever angle you look at it, it seems clear that current and future developments will leave solar power from rooftops and grount-mounted plants as likely the most cost competitive primary source of energy in Australia. This competitiveness shall allow economically for a variety of solutions (e.g. storage, demand management, solar fuels) to address the variability of supply and thus extend the use of solar power from offsetting daytime peaks today to supplying 40, 50 or even 60% of the total energy needs.

The Conversation

Bernhard Mitchell, Research fellow in Photovoltaics, UNSW Australia

This article was originally published on The Conversation. Read the original article.


Take our Solar Quiz Compare Energy Providers and Save

Download Your FREE Ultimate Guide to Solar Power in Australia - 2021 Edition

Beginners Guide to Solar Power

If you’re considering solar for your property or just looking to maximise the savings for your solar system, download a FREE copy of our "Ultimate Guide to Solar Power in Australia - 2021 Edition".

Become an expert and better understand the ins and outs of solar power and solar PV systems for your property.

Includes detailed explanations and diagrams of the various types of solar systems and their parts, solar battery storage systems, Government incentives, expected ROI periods, finance, energy-saving tips and more!

Download Your Free Copy Now!

Latest blog & information


Please provide your email address so that we can send your free copy of "The Ultimate Guide to Solar Power in Australia - 2021 Edition".

* By clicking "Send me a copy" I agree to the terms in TQC’s privacy policy.

Thank you

A link to download your copy of "The Ultimate Guide to Solar Power in Australia - 2021 Edition" has been emailed to the address you provided.

If this message does not appear in your inbox, ensure that you have provided the correct email address or check your junk/spam folder.

This message will close in 10 seconds or

Close and back to page

Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.

[gravityform id="4"]
<p class="gform_not_found">Oops! We could not locate your form.</p>