As many as one-in-two households could be host to solar and storage installations by 2050 in Australia, if it becomes a “clean energy superpower,” according to new modelling produced by consultancy Green Energy Markets.
Green Energy Markets was commissioned by the Australian Energy Market Operator (AEMO) to model potential future adoption of rooftop solar installations and battery storage systems, finding that ongoing cost reductions of both technologies are set to drive continued strong uptake, and a growing share of Australia’s electricity needs being met behind the meter.
The modelling predicts that Australia’s installed capacity of solar PV could grow as much as eight-fold over the next few decades, growing from its current level of 9,900MW at the end of the 2019-20 financial year, to 47,000MW based on its current trajectory, and could grow as high as 82,000MW in an ‘Export Superpower’ scenario.
To reach these levels, the penetration of solar installations would continue to grow strongly out to 2050. Under the current installation trajectory, the number of residential solar installations will grow to around 37 per cent market penetration by 2050, and most households, 52 per cent, will have rooftop solar under the Export Superpower scenario.
Under the ambitious ‘Export Superpower’ scenario that is being considered by AEMO, Australia is assumed to become a leading global exporter of clean energy, with the nation growing its overall energy production significantly beyond its current levels.
The uptake of battery systems is also expected to surge as the economics of residential storage continue to improve.
Green Energy Markets estimates that there is around 667MWh of small-scale battery storage capacity currently installed, but by 2050, the current trajectory will see a total of 42,000MWh of battery systems installed. Again, under the more ambitious export superpower scenario, the adoption of battery systems would be even stronger – more than double the current trajectory – reaching 89,000MWh, according to Green Energy Market’s projections.
To achieve this feat, almost all future solar installations would be paired with a battery storage system.
“As some perspective, under Current Trajectory around 64% of solar systems in the NEM would be coupled with a battery, while almost 24% of residential connections in the NEM would have a battery system. At the very high end represented by Export Superpower, 95% of solar systems are coupled with a battery and 49% of residential connections host a battery system,” the report says.
The Green Energy Market’s modelling gives reason for optimism for battery uptake. The consultancy cautioned that data on the potential uptake of battery systems remains limited but said that while residential battery systems remained a questionable investment based on current prices, falling technology prices would very quickly see batteries become a financially attractive option with similar payback periods to solar installations.
“In the first few years of the 2020’s paybacks for batteries are quite long, in fact they exceed the typical warranted life of a battery of around 10 years until the mid 2020’s under the Current Trajectory scenario. Consequently, they don’t help improve the financial attractiveness of solar. Yet, in spite of long paybacks, there is already a market for residential battery systems,” the report says.
“It is only by around the mid to late 2020’s in the Current Trajectory Scenario that we envisage that batteries act to reduce the payback period for a solar system and it is around that time that we project a large uptick in battery uptake.
“By 2029 the model envisages in the Current Trajectory scenario that almost all new solar system sales will be coupled with a battery,” the report adds.
The findings will be used by AEMO in the development of the next Electricity Statement of Opportunities and Integrated System Plans, which identify the required levels of future investment in large-scale electricity capacity and supporting network infrastructure in Australia’s main grid.
The projected growing role of rooftop solar and storage is likely to further diminish the long-term need for emissions intensive energy sources, like coal and gas generation, that are likely to be further pushed out of the market by lower cost supplies of small and large scale renewables.
