Energy storage will accelerate the solar revolution by Nigel Morris

There are two great things that come from taking a long break each year.

First, you get to connect back with life a bit; family, friends and just doing stuff you want to do. Secondly, it gives you a chance to extricate yourself from the grind of getting work done to philosophising about what you are doing and how to do it better.

For me at least, this is when the issues around solar and energy start to crystallise and arrange themselves better. Stimulated by a number of conversations and new data, I can now see through my PV coloured glasses that a revolution is underway.

I think this year is going to be incredibly fascinating for solar and energy and here’s why.

Forecasts and penetration

Each year I start out with a little geek-fest with my old friend Warwick Johnston from Sunwiz. This year will be the third consecutive year that we have sat down and analysed where we think the local solar market will go; and based on last year’s results, we are producing ever more accurate forecasts.

We start out by analysing detailed data on component and system costs across a variety of sizes and markets and calculate a complex set of financial outcomes for each State. With this fundamental economic proposition, we then take into account electricity prices, inflation, exchange rates,  incentives (if any) and so on. Then we look back at historical uptake, compare market reactions under different circumstances, take into account the market stimulants and produce a business as usual forecast. By progressively taking into account a wide variety of factors that could positively influence take up rates, we then produce accelerated forecasts.

The most exciting part of the exercise this year was when we took something new into account which had previously not had such a strong influence; the effect of changing household penetration rates and the increasing interrelationship between them and technological evolution. Penetration rates and their impacts can be assessed in many ways (e.g. available rooftops, grid penetration levels, general consumer penetration etc.) and whether the generic guides to flattening demand apply in the Australian PV market remains to be seen. However, the following graph describes the conventional wisdom about how markets react to technology uptake. Clearly, we are well and truly in the early majority phase of penetration.