While questions remain about what a post-subsidy photovoltaic market will look like in many countries, in one state of Australia it seems that it will be a case of business-as-usual, or even better.
The latest figures from a local utility are showing that more than 112,000 WA households now have photovoltaic arrays, more that 10% of all households. The rate of installation is also four times higher than the original solar boom that took place in 2010, when a state government FIT and federal government subsidy was in place.
On the flipside of the installation boom in the state, a reduction in electricity demand has been noted by utilities. This could result in a utility "death spiral", as falling demand leads to price increases for remaining customers, more solar and falling demand and so on. Two Australian economists, Paul Simshauser and Tim Nelson from AGL, explored this theme in a working paper of July 2012.
In a statement that seemingly acknowledges this potential trend, Synergy chief executive Trevor James told a local newspaper that residential solar installations were eating into sales. "The surge in demand for photovoltaic cells has contributed to a reduction in the level of energy sales in the (south west electricity grid) over the past couple of years," James said.
Electricity prices are an ongoing subject for debate in WA and other Australian states as utilities raise prices to pay for long-overdue infrastructure spending. In WA recently, the re-elected Premier and new Energy Minister both acknowledged that "cost reflective" pricing still does not occur in the state, with the government subsidizing utilities that still largely rely on fossil-fuel fired generation. Electricity prices have risen 69% in WA since 2009.
Some Australian utilities have been increasingly pointing to high amounts of solar in Australia as driving up electricity costs. Increased fixed costs and even the introduction of "gross tariffs" for households with photovoltaics have also been suggested. The renewable energy industry in the country, however, has disputed that solar is to blame for price increases and infrastructure expenses.
"Adding solar reduces peak load, reduces peak costs to the network, improves local network reliability, eliminates summer brownouts, delays or ends need for additional construction of peaking plant," said Ray Wills, the former head of the Sustainable Energy Association in Australia and consultant, in a statement to pv magazine. "My view is if this was done as a rigorous assessment, would discover the many savings distributed rooftop generation was bringing to the grid." Wills estimates that 5 MW per month of photovoltaics is being added to the grid in WA on residential rooftops.
In terms of demographics, the latest photovoltaic installation figures confirm a previously observed trend that installations are not concentrated around high-income areas. Figures show that outlying suburbs, with lower to middle-income families, are installing the highest number of arrays. These suburbs tend to be expanding with higher levels of new-home builds, indicating that solar arrays are becoming a standard part of home construction in WA.