In September 2021, Australians in certain states were spending more on solar power systems, but they were still receiving a good deal given the benefits of solar energy.

Here’s how September compares to August, as well as September last year. After all discounts and credits, the average cost per watt is for fully installed installations (all system capacity).

 

State	Cost per watt (September 2021)	Cost per watt (August 2021)	Cost per watt (September 2020)
QLD	$0.89	$0.89	$0.90
NSW	$1.02	$1.02	$0.99
ACT	NA	NA	$1.15
VIC	$0.91	$0.88	$0.81
TAS	$1.14	$1.09	$1.21
SA	$0.95	$0.90	$0.90
WA	$0.81	$0.74	$0.73
NT	NA	NA	NA
AU	$0.95	$0.91	$0.91

 

And here’s a graph showing the nationwide cost-per-watt scenario since October 2019:

Prices for 6.6kW Solar Power systems, which are now considered starting grade, are as follows:

This data comes from the Australian Solar Price Index. It’s an engaging tool that displays typical pricing for rooftop solar power system installations in each Australian state/territory and nationwide over time, dating back a few years.

One of the tool’s most intriguing features is the ability to dig down and check prices on multiple system sizes, as well as systems with particular brands of solar panels and inverters.

Why Are Solar Power Prices Rising in Some States?

Prices appeared to remain fairly steady in QLD and NSW in September, but in the other states, they began to rise — and QLD and NSW are expected to follow suit. The Australian solar sector is now in a difficult situation due to a variety of difficulties that are producing a solar panel supply constraint.

Prices for silicon and other materials have risen dramatically, as have transportation expenses. Panel supply from China is tighter owing to local demand taking precedence and several areas encountering issues with electricity supply, creating production interruption.

We’ve heard that in China, panel price is now determined by the ‘spot rate’ which is when panels are picked up from the factory rather than when they are ordered. This may make pricing systems problematic, especially because many installers don’t have large margins, to begin with.

Not only is there increased pressure on panel prices, but there has also been some murmuring of price rises for solar inverters. And in both situations, it’s not only Chinese-made components.

Price rises are expected to persist while the supply chain is sorted out. High Solar Power prices won’t last forever, but how long is anyone’s guess given the numerous estimates.

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The world’s largest solar energy PV and storage project has hit a snag after a Singapore electricity retailer that had agreed to be a fellowship client for the renewable energy generated by Australia’s $26 billion Sun Cable project revealed it would shut down operations amid a career-high spike in electricity prices.

Singapore’s largest independent power supplier, iSwitch Energy, has stated it will depart the market next month, as the global energy crisis has taken a major toll on electricity costs in the city-state, which imports virtually all of its energy needs.

iSwitch, which had committed its support as a foundation customer for Sun Cable’s proposed $26 billion Australia-ASEAN Power Link (AAPL) in northern Australia, said on November 11 that it will stop retail operations due to “current electrical market circumstances.”

“Approximately the past six years, iSwitch Energy has had the honour of servicing the Singapore Electricity Market and together saving consumers over $150 million on their energy bills when compared to the SP Tariff,” iSwitch stated in a letter to its clients.

“We’ve also assisted in keeping the focus on sustainability and the green aims that we know are so important to all of you.”

The bankruptcy of iSwitch might have repercussions for the planned AAPL project, which would use an undersea transmission link to transport solar energy from Australia’s Outback to Singapore.

Solar Energy Turmoil Downunder

In 2019, the independent retailer promised to assist the project as a foundation off-taker for the solar energy generated by the projected 14 GW solar farm, which would be paired with an estimated 33 GWh of battery storage.

• The solar energy project is being built on a 12,000-hectare site in the Northern Territory’s Barkly Region
• It will supply power to Darwin and Singapore via a 4,500-kilometer high-voltage direct-current (HVDC) transmission network
• It includes a 750-kilometre overhead transmission line from the solar farm to Darwin and a 3,800-kilometer HVDC submarine cable from Darwin to Singapore.

According to Sun Cable, the AAPL is projected to create enough renewable electricity to power more than 3 million households every year and to be capable of supplying up to 20% of Singapore’s entire electricity demand, with supply beginning in 2027.

In its release, iSwitch made no mention of Sun Cable but stated that customers’ electricity accounts will continue with iSwitch Energy until November 11, when they will be handed to SP Group, Singapore’s state-owned power supplier.

Singapore is the unfortunate example of increasing worldwide gas prices, which have reached all-time highs in Europe and Asia this month. The rising rates have also impacted energy suppliers in the United Kingdom, where several energy businesses have gone bankrupt, while China and India are experiencing power shortages and outages.

Singapore’s Trade and Industry Minister Gan Kim Yong recommended families earlier this month to save power as fossil fuel costs continue to rise.

According to Gan, fuel costs have more than quadrupled in the last 18 months, with power prices increasing 54 per cent in the first half of this year compared to the same period last year in key advanced nations.

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Due to challenges occurring beyond our borders, the availability of high-quality solar panels in Australia may become more restricted and expensive shortly.

PV-Tech reported late last week that top producers Longi, JinkoSolar, Trina Solar, JA Solar, and Risen Energy were warning that rising material and transportation prices were endangering the sector. Polysilicon, for example, remains expensive, and the cost of solar glass and adhesive films has also risen.

These cautions aren’t recent; JinkoSolar has been discussing the concerns for quite some time. However, with China being in the middle of what has been dubbed an energy crisis, the five major players have asked the enterprises they supply to postpone projects, which are presumed to be solar farm projects.

The crisis is now affecting both small-scale and commercial solar in Australia. We learned yesterday that a major Australian solar distributor had been informed during the previous few days that many of its scheduled shipments had been delayed or cancelled. This wasn’t occurring with just one or two of its main solar panel suppliers, but with all of them.

Intermediate Report on Solar Panel Prices in Australia

So, what’s been going on with solar system prices in Australia recently?

As we indicated in our September Australian Solar Prices analysis, while system costs have usually held up well over the prior 12 months considering the conditions, this wasn’t guaranteed to continue.

As the month progressed into October and the Index was updated to cover September, the following is what we’re seeing right now. After any discounts and grants, this is the mean installed cost per watt for all solar power system sizes in all states.

• The cost per watt increased somewhat in August and has since proceeded to grow sharply for systems acquired in September, returning to levels observed in August 2020.
• However, because the Index is updated in real-time and it is still early in the month, the situation may alter when more information regarding September purchases becomes available.

It will also differ from state to state; for example, current NSW numbers indicate a modest drop in cost per watt. But, at this point, what the Index’s national number indicates, together with what is being reported elsewhere, indicates that it’s a situation worth keeping an eye on.

Even if the price of solar panels continues to grow, they will remain an excellent investment. However, for Australians contemplating solar power, this may be a good time to investigate the concept and take advantage of any stock installers that may have to remain at lower pricing.

Pay close attention to the solar panels mentioned in a system quotation and do your homework, since some installers may use lower-quality panels owing to cost and supply difficulties.

It’s also worth noting that the national subsidy (also known as the “solar panel rebate”) will be reduced again at the start of next year.

As they say, a bad wind blows no good, and if the situation in China persists, it might give a tremendous chance for Tindo Solar – the only Australian producer of solar panels.

Tindo said around this time last month that decommissioning of its present production site in Adelaide had begun, and that the business was awaiting the arrival of equipment for the new facility, which would be located close to the old factory. At the time of publication, it was unclear how this was proceeding. Without a doubt, the corporation is eager to have it up and running as quickly as possible, if it is not already.

Solaring urges everyone to get in touch and set up a discussion of sorts. If not for today, later on, we will have to move to Solar Energy. We strive to make things easier for you.

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As a result of China’s energy crisis, Australia’s leading wholesale solar distributor anticipates supply shortages and pricing rises of 20% to 30%. According to PV magazine Australia, the situation in Australia is particularly precarious, with our cheap price and equivalent market size not working in our favour in the worldwide competition for solar supply.

 

One-Stop Warehouse, Australia’s largest wholesale solar distributor, expects supply shortages and price hikes of up to 30% to shock the market for at least the next three to six months. 

 

While solar module prices have been projected to rise for some time due to increases in raw material and transportation costs, China’s prolonged energy crisis has created huge manufacturing disruptions, exacerbating the issue.

 

Andy Cheng, Head of Product Procurement and Marketing at One-Stop Warehouse, told PV magazine that Australia is in a uniquely precarious situation, contending for stocks against Europe and the United States – both of which are considerably larger markets and better equipped to tolerate pricing volatility.

 

Cheng anticipates that Western Australia and South Australia would be the worst hit because of their tight Covid-19 border rules, which make it impossible to supply supplies on time.

 

Why is Australia’s position precarious?

 

China is the world’s largest provider of solar energy, controlling not only panel production but also the whole upstream supply chain. As a result, the effects of the country’s energy crisis, as well as polysilicon shortages and price increases for solar glass, aluminium, and other materials, will be felt across the world.

 

Furthermore, Cheng believes that transportation prices have quadrupled in the previous year, rising from about US$3,500 per shipping container to US$11,500 currently.

 

While Australia is a significant solar market for China, it is small in contrast to Europe and the United States, and pays less for supplies on a constant schedule, putting us in an especially susceptible situation in the global competition to obtain solar stock.

 

Cheng stated that to acquire goods for One-Stop Warehouse, the business has offered manufacturers more money than was originally agreed.

 

Despite raising its prices on October 1, the firm has had several of its anticipated shipments delayed or cancelled in the previous month.

 

 

What’s available?

 

Cheng believes that 80 to 90 per cent of One-Stop Warehouse’s inventory is sourced from China. While the firm is and has been attempting to diversify its stockists since the epidemic, Cheng stated that it has encountered challenges since there aren’t many completely vertically integrated solar brands outside of China.

 

Solaring has been constantly monitoring module pricing in Australia, finding that it has not been severely influenced as of August of this year. Cheng explained that while Australia had a good first quarter this year, frequent lockdowns disrupted our second quarter, leaving the country with an overstock.

 

Australia’s industry is anticipated to perk up again when the country’s two most populous states, New South Wales and Victoria, emerge from lockdown and relax border restrictions.

 

The fourth quarter of the year is normally the busiest for the Australian solar industry, and Cheng expected supply shortages during that traditionally busy season. He stated that it is now too late to get more supply for the quarter.

 

Damage Control

 

Cheng believes that the impending volatility would persuade solar firms to raise their prices more in the future. “In the past, there was a race to the bottom [in Australia], with everyone striving to have cheaper pricing than the competitors, which is not healthy,” he added.

 

He believes the market will be able to withstand the shock and that end customers would be unaffected. “In Australia, we have high power prices, and the STC subsidies allow us to bear it… It’s not a significant increase when compared to the savings from getting solar.”