Harnessing solar energy on utility-scale is setting back the former popularity of fossil fuels for power generation in Australia. Solar energy offers a distinct pricing advantage when compared to fossil fuels and other sources of power generation. Researchers have observed that utility-scale harnessed solar electricity prices have fallen drastically between 2010 and 2020 and evidently so because technologies become cheaper as they scale. As an example, the cost of electricity produced from Solar Energy declines as the production increases.
The Solar Perspective: Australia
Australia is the undisputed world-leader when it comes to harnessing renewable energy. According to a research study published in 2020, 21 percent of Australia’s electricity came from renewable energy in 2019, which increased from 19 percent in 2018. The study also highlighted that the most significant increase in renewable electricity generation was in large-scale solar (135 percent), followed by small-scale solar, which was up 25 percent.
The impressive upsurge in electricity generation from renewables was due to record levels of new investment in the sector. The Ministry of Energy and Emission reduction states that 6.3 gigawatts of new renewable energy capacity were delivered in 2019, which included 3.9 GW of utility-scale solar power plants capacity and 2.4 GW of residential as well as commercial rooftop solar installations. It is expected that a similar trend will follow suit in 2020. Capacity additions in 2020 are expected to range between 6 GW and 6.5 GW.
Solar Power Generation is Cheap: How and Why?
Before 2010, Solar prices ranged between $5 to $10 per watt. This limited their adoption to only the early adopters with more significant financial means. However, decreasing costs, attractive governmental STC schemes, and incentives have brought down solar power prices dramatically over the past five years.
Solar power generation in Australia is getting cheaper by the day because of the economies of scale that product manufacturers are achieving with magnified demand and streamlined installations. Plummeting prices for harnessing solar power are inversely proportional to how much the sector is putting towards deployment of the solar installations. According to Swanson’s Law, the cost per watt of solar electricity has been dropping exponentially with each passing year.
Developments and improvements in cell efficiency and panel designs continue to benefit the nation in novel ways. Resultantly, even the costly production processes have been revamped, with its benefits passed through to consumers.
The demand for solar will continue to rise, given the increasing incomes and fast-paced consumption in developed and developing countries. The widespread popularity of electrical transport, flexible grids and industrial decarbonisation are the main components that contribute towards its reputation as a source of energy.
Australia’s Future under the Sun
The trend of dramatically decreasing solar electricity prices as projected in the future will likely cause the more expensive fossil-fuel electricity generation to become less and less popular. Despite challenges like finding cheaper solar electricity storage, grid integration, and complimentary solar power generation, solar power presents an excellent alternative for decarbonising the country’s electrical grid.