The solar and battery industry in Australia has been on a wild ride, with demand swinging like a pendulum, riding the waves of government incentives. The latest twist in this tale is the sudden drop in battery installation rates, a phenomenon that has been dubbed the 'solar-coaster'. This rollercoaster of demand is not just a local phenomenon but a global trend, with governments around the world offering subsidies to encourage the adoption of renewable energy. However, the Australian government's recent changes to the battery subsidy scheme have thrown the industry into a tailspin, with installation rates plummeting by over 70%.
The 'solar-coaster' is a result of the government's decision to tighten the subsidy rules, which had previously allowed for large batteries to be over-sold. The new rules, which came into effect in May, mean that the subsidy is now tapered for systems over 50kWh, with the full subsidy only available for the first 14kWh. This has led to a sharp decline in installations, with just over 20,000 batteries installed in May and June, compared to over 80,000 in April.
The industry is not panicking, however, with experts predicting that demand will remain steady in the coming months and years. The reason for this is twofold. Firstly, the industry has been preparing for this change, with many customers bringing forward their purchases to avoid the deadline. Secondly, the government's investment of an additional $5 billion into the scheme has helped to sustain the industry, with the overall cost now sitting at $7.2 billion.
The 'solar-coaster' is not just a problem for the industry, but also for the environment. The Australian government has set a target of two million battery installations by 2030, and the current drop in installations could slow down this progress. However, the industry is confident that it can overcome this challenge, with many customers now looking to upgrade their existing systems to increase their size and make better use of their storage.
The 'solar-coaster' is a reminder that the renewable energy industry is still in its infancy, and that the market is highly volatile. However, the long-term trend is clear: the cost of batteries is falling, and the cost of buying power from the grid is rising. This means that batteries will continue to be attractive to consumers, and that the industry will continue to grow, helping to reshape Australia's electricity system and reduce its carbon footprint.
