(Bloomberg) -- Australia's love of sunshine has seen the nation become a world leader in installing rooftop solar panels, but the pace of growth is surprising even the biggest electricity market operator.
Rooftop solar may meet as much as 77% of underlying demand in the mainland National Electricity Market by 2026, eclipsing the record of 35% set in October last year, the Australian Energy Market Operator said Tuesday in its annual reliability outlook. That comes as households are set to install an additional 8.9 gigawatts of solar panels by 2025, on top of the current 14 gigawatts.
Australia has solar power installed on 30% of homes and is the world's most decentralized energy market, according to BloombergNEF, making it a test case for how grids around the world transition from traditional electricity generation. The move may be even more profound locally, with South Australia possibly becoming the first major grid in the world to meet 100% of its demand through household solar by end-November, AEMO said.
“The NEM is leading the world in growth of distributed PV,” AEMO said. “While these developments challenge the limits of the current power system, they also provide the opportunity for pioneering market frameworks that provide new consumer benefits and demonstrate world first power system operation.”
Working From Home Bolstered Australia's Love of Solar Panels
Together with coal plant retirements and growing hydrogen development interest, residential solar is accelerating the transition of the NEM, AEMO said, adding that no reliability gaps are forecast for the next five years. The NEM doesn't include Western Australia and the Northern Territory, while the mainland NEM also excludes Tasmania.
“Australia's energy system is transitioning to a decarbonised and decentralised power system,” AEMO Chief Executive Officer Daniel Westerman said in a statement. “By 2025, there will be periods of time when all customer demand could be met by renewable generation.”
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