Despite the challenges of 2020, the solar market has continued to grow and has posted record high installation figures for the year. Across Australia just under 3GW of solar capacity was added from homeowners and small businesses (projects under 100kW in capacity) installing solar panels to tackle their rising energy costs, up 43% from 2.1GW in 2019 (Sunwiz Annual Report).
Three drivers of growth in the Australian rooftop solar industry
- Greater time to focus on home improvements
As the working population shifted to less hours and flexible working situations, many homeowners took the opportunity to tackle home improvements.
Evidence of this can be seen as Australia’s largest retailer of home improvement products and building supplies announce a 14% increase revenue during 2020 to $15b.
The rooftop solar industry realised similar growth, with consumers finding time to progress solar projects that had previously been too time-consuming.
- Flexible working means larger home energy bills
The rise in flexible workers energy bills presented another key driver for the uptake of residential solar systems. Research from Roy Morgan showed that over 4.3million people (or almost a third of working Australians) were working from home by mid-2020.
Working from home often means greater daytime electrical usage with greater use of air conditioning to keep workspaces comfortable to power lights and kitchen appliances.
For houses that were left empty during the day under usual working circumstances, this meant a significant increase in electrical usage. Solar is one of the most cost-effective ways of tackling home energy prices.
- Solar prices continue to fall to record lows
The cost to install solar has continued to fall through-out the year with residential solar prices dropping 13.2% in 2020 following a decade long trend. This is despite the number of certificates in Australia’s federal solar rebate declining each year, effectively applying around a 5% increase in the net price paid by customers.
At current prices a most homeowners can expect an appropriately sized solar system to pay for itself in two to four years. Small businesses with most of their electrical usage during the day can typically expect a system to cover its cost in less than three years and in some cases less than 12 months.
With zero daily community transmitted COVID-19 cases across most Australian states and economic activity rapidly returning to normal in the early parts of 2021, it appears these trends will continue to drive growth in the solar industry.
Jeff Sykes is the CEO of Solar Choice