For more than a decade, Australia has led the world in uptake of residential PV.
The industry-reshaping impacts of that world-leadership are now emerging as a daily experience.
22% of the time a PV system is installed without a battery, the solar retailer will encounter a pre-existing PV system.
That figure is higher when it comes to installing a battery. 35% of the time a battery is installed concurrently with PV, an existing PV system comes into play. That’s in addition to the 50% of batteries installed in 2023 that were retrofit to an existing, unchanged PV system.
The DER industry is no longer a greenfield industry. Increasingly its brownfield. PV penetration has reached the point that wherever you turn, you’ll encounter an existing PV system.
PV systems are being repowered because old systems are commonly too small for today’s household electricity requirements. Many customers have churned off premium feed-in tariffs, only to see their bills hike. Old PV systems were smaller because they were dearer, and the value of the solar exports was much higher than today. Nowadays PV systems are more efficient, cheaper, and slashing an electricity bill demands a larger system due to lower feed-in tariff. Hence, people are re-powering older PV systems.
What happens with the existing PV when it is encountered? Two-thirds of the time, the system is scrapped and fully replaced (unless a battery is installed at the same time). The continual improvement of installation requirements, standards and technology mean that its difficult, impractical, or impossible to bring yesteryear’s solar system up to today’s requirements. Only 1% of PV-only installations involve just adding extra panels to an existing inverter.
Amending an existing system means taking responsibility for the full system, and a new solar installer will be wary about having their neck on the line for someone else’s handiwork. 7% of PV-only installations add a second PV system (with its own new inverter) alongside the pre-existing one.
All of these factors vary considerably by state (in Queensland 29% of 2023’s PV-only installations encounter a pre-existing PV and 75% of those are fully replaced; in Victoria 12% of PV-only installations encounter pre-existing PV and 59% of those are fully replaced).
But the deciding factor about what happens to pre-existing PV when new PV is installed is whether a battery is added at the same time. 35% of PV+ESS installations encounter pre-existing PV, twice as common as for PV-only installations. When that occurs, 48% of the time the pre-existing PV system is replaced (compared to 68% for PV-only); its twice as likely that the pre-existing PV system will be extended just by adding new panels. Inclusion of ESS also doubles the chances the pre-existing system will be left in place and a separate system be installed alongside it.
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Source: SunWiz analysis of QCMR data produced by the CER.
Addition of a battery therefore enhances environmental outcomes. It also facilitates greater uptake of solar power across the neighbourhood and nation.
These sub-segments of the PV market point to an even more complex composition of ESS installations, with major implications for product designers.
- Retrofitting an ESS to an existing PV system could mean leaving the existing PV system unchanged (for which an AC-coupled battery is an ideal solution, though we see hybrid solutions also being implemented).
- But retrofitting an ESS may result in a second inverter being installed alongside the existing PV system, often resulting in complex power flows and constraints on the inverter’s AC power output.
- Or it could result in the pre-existing PV system being replaced entirely, which looks to the product manufacturer just like a greenfield installation, but the solar installer has more work to do.
- Then there’s greenfield PV+ESS installations, which are more straightforward.
There’s also a growing trend towards battery repowering – adding an extra battery to a pre-existing battery system. (ESS without solar also exist but are currently immaterial).
As you can see, this is not a homogenous market. Depicted below, in rough proportion (though greenfield PV is not shown to scale)
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For product designers and retailers, it’s essential to understand the size of battery and PV varies considerably within each of the above segments. Each state has its own blend of the above segments, with considerable differences in the portion of the market that is retrofit AND whether that results in larger or smaller installations.
For policy makers, it’s essential to understand that batteries drive favourable environmental outcomes by increasing reuse of existing PV and by facilitating more solar uptake in the neighbourhood and the nation.
Much more information on ESS market segmentation and trends is contained in the 2024 SunWiz Annual Battery Market Report. See https://www.sunwiz.com.au/battery-market-report-australia-2024/ to download a sample.