ARENA’s investment focus is on supporting high merit solar photovoltaic (PV) activities that demonstrate benefits beyond those identified through ARENA’s current portfolio of solar PV projects.
- high merit demonstration and pilot-scale activities in innovative applications of solar PV, for example in concentrating or multi-junction applications with the potential to significantly reduce the cost of renewable energy deployment in Australia
- studies, innovative pilots or demonstration activities to reduce balance-of-plant costs
- studies, innovative pilots or demonstration activities that integrate solar PV into buildings.
Later in 2015 ARENA intends to run a competitive process for up to 200MW of large-scale solar PV. Activities would be expected to be between 10MW and 50MW (DC) and have an LCOE $130/MWh or less. The goal of this funding support would be to substantially reduce the current gap in commercial competitiveness between large-scale solar PV and wind generation.
Support for other activities that use solar PV is also available and is addressed in investment focus areas overing integrating renewables and grids, off-grid, fringe- of-grid, and renewable energy in residential and commercial buildings.
This assessment is informed by staff analysis and prior expert reviews. ARENA intends to review and update this analysis in the next six to twelve months, including in light of progress with the agency’s substantial existing portfolio of solar PV projects.
ARENA supports many projects in other investment focus areas that also include solar PV, such as off-grid areas. Such projects are considered briefly in the later section that covers the gap in ARENA’s portfolio.
Likely scale and potential for growth by 2030-40
In 2014, global solar PV module production capacity was forecast to be 62.7 GW, made up of 90 per cent (56.6 GW) crystalline silicon (PV Gen 1) and 10 per cent (6.1 GW) thin-film (PV Gen 2).
In Australia, solar PV installation has grown to over 4 GW installed capacity in 2014. The vast majority of this capacity is made up of residential rooftop systems of less than 10kW capacity.
Deployment of rooftop solar PV is expected to continue strongly under both flat demand and high renewable growth scenarios that ARENA has used in its technology assessments, with an increasing proportion of the rooftop solar PV market being for larger systems (10-100 kW) on commercial premises.
From the 2020s onwards, increasing areas of the key market to date – freestanding residential properties – will have reached saturation penetration.
Deployment rates will be influenced by electricity tariff structures, the availability and commercial attractiveness of household-scale storage and incentives for upgrading existing 1.0-1.5 kW systems to those that use more of the available roof surface.
The scale and potential for growth of ground-mounted utility-scale solar PV is considered in the section on utility-scale renewables.
Australia has the ability to influence global solar PV technology development to improve cell efficiency and lower costs, as indicated by Australia’s concentrated and highly-cited research effort. Australian researchers have very good connections with Chinese crystalline silicon PV manufacturers, for example the University of NSW alumni who hold key positions (CEO, CTO) in many of the solar PV companies. For further information see Forty Years of Photovoltaic Research at UNSW by Martin A. Green.
ARENA could also influence the next stage of the technology development scale by supporting demonstration and pilot-scale alternative photovoltaic technology types, such as some built in photovoltaic systems, including dye based photovoltaics, and concentrating photovoltaics.
ARENA funding at utility scale cannot influence manufacturing costs for PV modules and inverters but there is potential for ARENA funding to help reduce balance of system and other project costs. Any future funding round for utility-scale solar would be focused on the reduction of such costs.
Gap in ARENA portfolio
As at June 2015, ARENA has invested over $500 million across more than one hundred projects using solar PV.
In 2014 ARENA added a new round of solar PV research and development projects to those it had inherited from the Australian Solar Institute. Consequently, ARENA has a large number of solar PV R&D projects underway and will review the need to further invest in such research in a later investment plan.
ARENA is funding a small number of demonstration and pilot solar PV plants. ARENA could support additional demonstration and pilot projects that showed a commercialisation pathway for niche photovoltaic technologies that are not ready for utility scale deployment, for example in concentrating or multi-junction applications that have the potential to significantly reduce the cost of renewable energy deployment in Australia or be deployed globally.
Innovative pilot or demonstration projects involving residential and commercial buildings (such as built-in photovoltaics, or focused on balance-of-plant costs) that could reduce the cost of deployment in Australia are also of interest.
Many of the demonstration projects currently funded by ARENA include solar PV as a key component but are supported primarily because they demonstrate application to identified market opportunities (eg off-grid or fringe-of-grid). Refer to the relevant investment focus areas for further information.
ARENA supports a small number of utility-scale solar PV projects, which are currently under construction, and aims to increase this number through its large-scale solar competitive funding round. More information is provided in the section on large-scale solar photovoltaics.