Analysis Reveals Oil Prices Contribute to PV Systems Deployment in Australia, New Zealand

Volatile oil prices combined with heightening concerns over global warming have paved way to the successful deployment of solar photovoltaic (PV) systems both in urban and remote areas in the Australia and New Zealand (ANZ) region. Solar PV systems provide the ideal environment friendly power generating solution for electrifying remote rural areas as it is neither technically nor economically feasible to extend grid coverage across the vast territories.

Market trends indicate burgeoning demand owing to strong governmental commitment to the promotion of solar energy and creation of sustainable cities. Besides increasing commitment from the local government, solar PV systems for rural electrification projects are likely to be driven by active participation of non-governmental organizations and availability of funds from international financial agencies, and involvement of local communities.

New analysis from Frost & Sullivan, ANZ Solar PV Systems Market Outlook, finds that the market earned revenues of $198.2 million in 2009 and estimates this to reach $827.8 million in 2016.

"Growing environmental consciousness and the urgent need to act against soaring carbon emission levels have forced governments to put forth policies and programs that address this mounting challenge. As a result, introduction of the solar cities program, solar credits program, solar flagships programs and various other renewable energy programs encompassing solar PV technologies have rapidly encouraged adoption as well as attracted new entrants into the lucrative ANZ region," says Frost & Sullivan Program Manager Suchitra Sriram. "The topographical advantage of the region, especially Australia with its very high solar (direct sunlight) radiation, has also led to new growth opportunities in the solar thermal market."

The introduction of feed-in-tariff is expected to be a big stimulant for on-grid solar PV system installations for both distributed and centralized solar power plants. State-wise solar PV targets too have led to increasing demand for solar PV systems. In many remote locations, solar PV systems are largely promoted along with diesel fired generator sets to satisfy on-site power needs of small communities.

However, market penetration of solar PV systems has been challenged by the continued dominance of coal in the overall electricity mix. The ANZ region, especially Australia, is the world's fourth largest producer of coal and has estimated reserves of 76 billion tonnes. In addition, well developed and stable power infrastructure restricts the usage of solar PV systems in urban areas.

In several cases, adoption of expensive solar PV systems becomes only a secondary option as there are several other low-cost distributed power generation technologies that satisfy the on-site power requirements of the end-users. Direct threat arises from the proven, low-cost and easily available diesel fired generator sets and wind power systems.

Solar PV systems market growth will continue to rely on government support until the price reaches grid parity. This includes the government's introduction of a uniform gross feed-in-tariff scheme at a national level.

"Information dissemination from the concerned government agencies about the proposed projects, favorable locations for installation, existing approval processes, and technical guidelines needs to be readily available to prospective project developers and end-users," says Sriram. "In few Australian states and in New Zealand, aggressive measures need to be adopted to increase the overall awareness levels about the long-term benefits of solar PV power systems."

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