Australia’s Transition to Renewable Energy and Electrification Led by Households and Businesses

Australian households and small businesses are at the forefront of the renewable energy movement, with a significant increase in rooftop solar installations. In 2023, they collectively added 3.1GW of rooftop solar capacity, representing 60% of all new renewable capacity in the past year.

The Clean Energy Regulator’s latest Quarterly Carbon Market Report revealed that there were 331,000 new rooftop solar installations in 2023, each with an average capacity of 9kW, setting a new record. This totalled to 3.1GW of new rooftop capacity installed throughout the year, showing a 10% increase from the previous year.

Record-Breaking Trends

This surge in rooftop solar installations marks the second-highest annual capacity installed, falling just short of the 3.2GW installed in 2021. The CER anticipates that 2024 may set a new record for additional rooftop solar capacity as more households and businesses seek to manage their energy costs effectively.

Alongside the rise in rooftop solar, energy-efficient air source heat pumps are also experiencing a surge in installations. In 2023, 135,000 units were installed, reflecting a 55% increase compared to 2022.

Shift in Large-Scale Renewable Installations

While Australia has consistently added over 5GW of renewable capacity annually for the past six years, the amount of large-scale renewables installed in 2023 saw a decline. The installed capacity dropped to 2.2GW from 2.8GW in the previous year.

Despite this decrease, there is optimism for the future, with 6.5GW of capacity under construction by the end of 2023. The slowdown in financing during 2023, with only 1.5GW reaching a final investment decision, is expected to reverse in 2024. This shift is likely to be driven by the federal government’s new Capacity Investment Scheme, encouraging new investment decisions in the renewable energy sector.

Continued Growth and Expectations

Renewables played a significant role in the National Electricity Market in 2023, accounting for an average of 39% of generation. This figure is projected to rise to approximately 42% in 2024, indicating a continued upward trend in renewable energy adoption and usage.

With Australian households and businesses taking proactive steps towards sustainable energy solutions, the country is poised to further enhance its renewable energy capacity and reduce its carbon footprint in the years to come.