Following years of limited domestic investment in large-scale solar, recent government subsidy programs and the falling cost of solar globally have sparked interest in the large-scale solar industry in Australia. Bloomberg New Energy Finance predicts that by 2019 the utility-scale solar market in Australia will reach 4 GW; more than 10x the size of the market as at the end of 20161. This rapid transition to renewable energy is unlocking new social investment opportunities as the list of investible solar projects expands.
World-leading PV installations per capita
Due to its high solar irradiation and suitable, owner-occupied housing stock, Australia boasts the largest number of household solar photovoltaic (PV) installations per capita of any country in the world. In fact, 16.5 percent of Australian households have rooftop PV systems installed2.
Despite the popularity of small-scale solar projects, however, Australia has lagged behind solar powerhouses like Germany, China and the U.S. in utility-scale installations. For example, at the end of 2016, Australia logged roughly 240 megawatts (MW) of installed large-scale solar capacity, compared to the United States' 46,000 MW3.
But thanks to improved economic factors and pervasive market interest, Australia is now in the midst of a solar construction boom. Current data shows that there are more than 17,500 MW of large-scale solar projects either under construction or in the development pipeline4.
Domestic large scale projects on the rise
One such project, by Reach Solar in South Australia, will soon proceed with its second stage, making it the largest under-construction solar farm in the country. Situated in Bungala near Port Augusta, the project’s two phases will clock in at 220 MW of capacity. That figure puts it ahead of a number of 100 MW projects in the Queensland region, with the ‘Sunshine State’ dominating large solar construction in the Australia5.
In north Queensland, Korean zinc refiner Sun Metals began building a 116 MW solar farm that is intended to stem the tide of skyrocketing wholesale energy costs for the company's refinery. Construction of the project, located south of Townsville and headed by First Solar, got underway in May 2017. The 142 MW Ross River solar farm, also near Townsville, is currently in development, and in February of this year, EnergyAustralia announced it had signed a power purchase agreement for 80 percent of the electricity generated by the project.
And don't expect the Reach Solar project to hold the mantle of largest for very long. Just last month, a 1,000 MW solar farm by Equis Energy received approval. Upon completion, the $1.5 billion project planned for Wandoan in Queensland, would rank among the largest solar farms in the world. Construction is expected to begin within 12 months.
Projects like these indicate a real tipping point in Australia's march toward parity in the utility-scale marketplace and demonstrate the exciting renewable energy investment opportunities currently developing in Australia.
John Martin is the Managing Director and CEO of New Energy Solar, a sustainable investment business initially focused on investing large-scale, cash-flow producing solar power stations that generate emissions-free power. New Energy Solar Manager Pty Limited is the Investment Manager of New Energy Solar and a wholly owned subsidiary of Dixon Advisory Group.