Australia Solar Power Market

Australia Solar Power Market Size and Share:

The Australia solar power market size reached USD 8.3 Billion in 2024. Looking forward, the market is expected to reach USD 12.9 Billion by 2033, exhibiting a growth rate (CAGR) of 15.87% during 2025-2033. The market is experiencing robust growth driven by supportive policies, increased environmental awareness, and strong adoption across residential, commercial, and utility segments. Technological advancements, falling system costs, and evolving grid infrastructure further accelerate market expansion, positioning solar as a key component of the nation’s clean energy future. This dynamic progress is reflected in the rising Australia solar power market share.

Key Trends of Australia Solar Power Market:

Increase in Solar Installations

Australia is witnessing significant growth in solar installations mainly in the residential and commercial sectors. This surge is largely driven by a combination of government incentives, such as rebates and feed-in tariffs, which make solar power more affordable for consumers. Additionally, the continuous decline in the cost of solar panels and advancements in energy storage technology have further fueled adoption. Homeowners and businesses are increasingly turning to solar energy to reduce electricity bills and minimize their carbon footprints. The ease of access to rooftop solar systems, along with financing options, has accelerated the adoption of solar energy across urban and rural areas. This trend aligns with Australia’s broader goals of transitioning to renewable energy and reducing dependence on fossil fuels. According to industry reports, in 2023, rooftop solar contributed 11.2% to Australia's electricity supply, with 20 GW total capacity of rooftop solar photovoltaic systems. New South Wales set a record with 970 MW of new rooftop solar installations, while Queensland became the first state to exceed one million rooftop solar installations. Additionally, 57,000 behind-the-meter batteries were installed. This growth underscores the increasing popularity of rooftop solar and the potential for a substantial impact on Australia's energy landscape.

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Integration of Energy Storage Systems

As solar power adoption grows, energy storage systems like batteries are becoming essential to address solar energy’s intermittency. Solar panels generate electricity only during daylight, which creates an imbalance between peak production and usage. Batteries store excess electricity produced during the day, allowing it to be used during non-sunlight hours or high-demand periods. This integration ensures a more consistent and reliable power supply, reducing grid dependency. Moreover, advanced energy storage systems enhance energy security, lower electricity costs, and support grid stabilization, particularly in regions with high solar penetration like Australia. This trend drives innovation in battery technology and promotes energy independence. For instance, in July 2024, Green Gold Energy received approval to build a 108MW solar farm with 91.7MWh of battery storage in South Australia. The project, named Morgan Solar and Battery Energy Storage, aims to draw in an investment of over AUS$185 million and create job opportunities during its 18-month construction period. The company also plans to explore green hydrogen production on-site. Additionally, plans for a 200MW solar PV farm with 200MW of battery storage in the Australian Plains region are underway.

Growth Drivers of Australia Solar Power Market:

Abundant Solar Irradiance and Geographic Advantage

Australia has one of the highest levels of solar irradiance in the world, with plenty of sunlit land in the central and coastal areas. The average solar energy that reaches the country daily is 4- 6 kWh/m2, thus making the country one of the best places to install photovoltaic (PV) and concentrated solar power. This is the natural advantage, considering the high efficiency of solar power generation and sustaining residential and utility-scale projects. Other states such as Queensland and Western Australia, together with the Northern Territory, have been transformed into solar hotspots with investors flocking in. Decentralized solar energy is also possible due to the sheer geographic scope, with reduced transmission losses. This climatic and spatial advantage positions Australia as a global leader in solar energy potential, offering sustained long-term growth.

Declining Costs of Photovoltaic Technology

The cost of solar photovoltaic (PV) technology has significantly declined in recent years, largely driven by technological advancements, global manufacturing scale, and increased competition. In Australia, this trend has led to a notable reduction in the levelized cost of electricity (LCOE) from solar, making it increasingly competitive with coal and gas. Lower prices for solar panels, inverters, and balance-of-system components have reduced upfront investment costs, accelerating adoption across both commercial and residential sectors. Innovations such as bifacial modules, tracking systems, and improved panel efficiency continue to enhance return on investment. As affordability improves, more households, businesses, and utilities view solar as an economically viable and sustainable energy solution.

Corporate Renewable Energy Demand and Green Procurement

Corporate demand for clean energy is rapidly growing in Australia, driven by ESG mandates, carbon-neutral commitments, and investor pressure. To cut energy expenses and lower their carbon emissions, major corporations—ranging from mining enterprises to technology companies—are increasingly securing renewable energy through on-site solar systems and power purchase agreements (PPAs). This strategic shift reflects a broader commitment to sustainability and long-term operational efficiency across various industries. Green credentials are increasingly tied to brand value, prompting businesses to invest in clean energy solutions. Solar power offers predictable long-term energy pricing, making it an attractive hedge against rising electricity prices. Moreover, sustainability reporting standards, such as TCFD and Net Zero targets, are pushing Australian firms toward renewable procurement. This surge in private-sector solar investment supports ongoing market expansion beyond just government and residential participation.

Opportunities of Australia Solar Power Market:

Repurposing Decommissioned Coal Sites for Solar Development

Australia has numerous decommissioned or soon-to-close coal-fired power plants and mining sites, particularly in New South Wales and Queensland. These brownfield locations present an opportunity to convert existing grid infrastructure, land, and workforce for solar energy production. Since grid connectivity and transmission infrastructure are already in place, transitioning such areas to solar reduces the time and cost associated with greenfield development. Additionally, these projects offer a just transition pathway for affected coal communities, creating jobs in solar installation, operations, and maintenance. This approach aligns with national net-zero ambitions while mitigating social resistance to decarbonization. Turning old coal assets into solar farms also ensures efficient land reuse and contributes to cleaner, future-ready regional economies.

Expansion of Solar-Powered Microgrids in Remote and Indigenous Communities

Many parts of regional and remote Australia, including Indigenous communities, still rely on expensive diesel generators for electricity, which is driving the Australia solar power market demand. Solar-powered microgrids present a major opportunity to bring clean, reliable, and affordable energy to these underserved areas. Microgrids—small, independent power systems—allow for localized generation and consumption, reducing dependence on centralized infrastructure. By combining solar PV with smart control systems and minimal battery backup (without full-scale storage integration), communities can achieve significant cost and emissions savings. Moreover, microgrid projects can boost local employment, foster energy sovereignty, and promote environmental sustainability. Government grants and public-private partnerships can accelerate microgrid deployment in off-grid or fringe-of-grid regions, creating inclusive development and broader market penetration for solar technology.

Development of a Domestic Solar Technology Manufacturing Base

Australia has the opportunity to localize parts of the solar value chain—especially in manufacturing components such as mounting systems, inverters, and advanced PV materials. While panel manufacturing is currently dominated by overseas suppliers, growing geopolitical risks and supply chain vulnerabilities have triggered interest in reshoring clean energy production. Government incentives under programs like the Solar Sunshot initiative aim to foster domestic manufacturing capabilities, create jobs, and build national supply chain resilience. Investment in R&D, pilot facilities, and university-industry collaborations can position Australia as a regional innovation hub for solar technologies. Strengthening local production not only reduces import dependency but also aligns with clean energy industrial strategies, offering long-term economic and energy security benefits

Challenges of Australia Solar Power Market:

Limited Transmission Infrastructure and Grid Congestion

Australia’s rapid uptake of solar, especially in regional areas, has outpaced the capacity of its existing transmission infrastructure. Many high-solar-potential zones are located far from demand centers, leading to bottlenecks and curtailment risks. The outdated and centralized grid was not designed to handle two-way electricity flows or the variability of solar energy. As a result, solar farms often face grid connection delays, technical constraints, or limitations in power export. These challenges increase project uncertainty and reduce investment returns. Upgrading transmission lines and building interconnectors is costly, time-consuming, and politically complex, requiring national coordination. Without significant grid modernization, including flexible network planning and congestion management, the full potential of Australia’s solar market cannot be realized.

Regulatory Inconsistencies and Policy Volatility

The solar market in Australia faces uncertainty due to fragmented and frequently shifting regulatory frameworks across federal, state, and territory governments. Differences in grid rules, feed-in tariffs, licensing processes, and permitting timelines hinder efficient market development. Inconsistent support for renewable energy at the federal level, especially in past administrations, has led to investor hesitation and planning difficulties. According to the Australia solar power market analysis, abrupt changes in solar incentives or policy signals, such as reduced subsidies or shifting tax benefits, create unpredictability for project developers and consumers. A lack of long-term, bipartisan energy strategy undermines confidence in large-scale investments. For Australia to unlock its solar potential, regulatory clarity, streamlined approval processes, and coherent national policies are essential to foster a stable and attractive business environment.

Skill Shortages and Workforce Gaps in Solar Deployment

Despite booming demand, the Australian solar industry faces a shortage of skilled labor across key segments—including installers, electricians, system designers, and maintenance technicians. The rapid pace of solar deployment has outstripped the availability of trained professionals, leading to project delays, quality concerns, and rising labor costs. The skills gap is particularly acute in regional areas, where many solar projects are located. Additionally, there’s a need for upskilling in advanced technologies like smart inverters, solar software integration, and compliance with evolving grid standards. Without a coordinated approach to workforce development—through vocational training, certification programs, and career pathways—Australia risks falling short of its solar ambitions. Addressing this challenge is crucial to ensure safe, timely, and cost-effective solar expansion.

Government Support of Australia Solar Power Market:

Small-scale Renewable Energy Scheme (SRES) and STCs

The federal government’s Small-scale Renewable Energy Scheme (SRES) plays a crucial role in boosting household and small business solar adoption. Under this scheme, eligible solar PV systems generate Small-scale Technology Certificates (STCs), which are tradable and act as an upfront discount on installation costs. Retailers buy these certificates, effectively passing savings on to consumers. This reduces the payback period and makes solar systems more accessible, especially in suburban and rural communities. The SRES has significantly contributed to Australia's high residential rooftop solar penetration. Although scheduled to phase out gradually by 2030, its success in driving grassroots adoption illustrates how financial incentives, when tied to measurable clean energy outputs, can catalyze widespread market participation and stimulate local installation industries.

Australian Renewable Energy Agency (ARENA) Funding Initiatives

The Australian Renewable Energy Agency (ARENA) provides targeted funding and grants to support innovation and commercialization in solar technologies. ARENA has backed a wide range of projects—from solar thermal pilots and ultra-low-cost PV research to large-scale demonstration projects and remote microgrids. Its funding bridges the gap between early-stage R&D and commercial viability, helping startups and research institutions advance next-generation solar solutions. Importantly, ARENA fosters industry collaboration and knowledge-sharing through its open data and project evaluation practices. By de-risking investments and supporting cutting-edge technology, ARENA has positioned itself as a central driver of solar sector innovation. These initiatives ensure Australia remains competitive in global solar advancements while stimulating private sector participation and long-term capacity building.

Clean Energy Finance Corporation (CEFC) Investment Programs

The Clean Energy Finance Corporation (CEFC) operates as a government-owned green bank that leverages public capital to unlock private sector investment in renewable energy, including solar. CEFC provides concessional loans, co-investment strategies, and structured finance solutions for residential, commercial, and utility-scale solar projects. Its strategic partnerships with banks and clean-tech firms have helped scale up solar deployment, especially where traditional lenders are hesitant. The CEFC also supports solar integration into the built environment, such as through green buildings, solar for agribusiness, and innovative solar-plus-tech solutions. This model of public-private financing has proven effective in accelerating solar adoption while ensuring financial discipline. The CEFC’s mission aligns with Australia's broader decarbonization goals, making it a cornerstone of solar market development.

Australia Solar Power Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2025-2033. Our report has categorized the market based on type and deployment.

Type Insights:

• Solar Photovoltaic (PV)
• Concentrated Solar Power (CSP)

The report has provided a detailed breakup and analysis of the market based on the type. This includes solar photovoltaic (PV), and concentrated solar power (CSP).

Deployment Insights:

• Utlility
• Non-utility

A detailed breakup and analysis of the market based on the deployment have also been provided in the report. This includes utlility, and non-utility.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Australia Solar Power Market News:

• In August 2024, the Australian government announced the approval of a $19bn solar project to export electricity to Singapore. The Australia-Asia Power Link will provide 6GW of renewable energy, with one-third transmitted to Singapore. SunCable, owned by entrepreneur Mike Cannon-Brookes, expects to supply 15 percent of Singapore’s energy needs by the early 2030s. The 12,000-hectare solar farm in Northern Territory aims to create 14,300 jobs and position Australia as a renewable energy leader with strict environmental protections.
• In August 2024, Capral Aluminum and Tindo Solar announced their partnership to boost Australia's renewable energy sector. Capral will supply extruded aluminum for Tindo's Australian-made solar panels and potentially support Tindo's planned Gigafactory. The facility, anticipated to create 250 jobs and produce up to 7,000 solar panels daily, is part of the push for increased domestic renewable energy production. The collaboration emphasizes the power of local manufacturing in advancing Australia's sustainable energy solutions and strengthening the nation's industrial practices.

Australia Solar Power Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia solar power market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia solar power market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia solar power industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.