Solar Energy in Australia Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Australia Solar Power Market Analysis

The Australia Solar Power Market size in terms of installed capacity is expected to grow from 47.50 gigawatt in 2025 to 91.74 gigawatt by 2030, at a CAGR of 14.07% during the forecast period (2025-2030).

Australia's solar power industry continues to demonstrate remarkable potential, supported by the country's abundant solar resources and strategic geographical positioning. The nation's commitment to renewable energy transformation is evident through its ambitious infrastructure developments, notably exemplified by the landmark Sun Cable project outside Tennant Creek in the Northern Territory. This AUD 20 billion initiative, set to become the world's largest solar farm, will feature a 10 GW solar array spread across 15,000 hectares of central Australian desert, demonstrating Australia's capability to lead large-scale solar implementations.

The rooftop solar installation sector represents a significant opportunity within Australia's solar landscape, with studies by the Clean Energy Finance Corporation and Property Council of Australia indicating a total rooftop solar potential of approximately 179 GW, capable of generating an annual output of 245 TWh. This potential output exceeds Australia's current annual power demand, highlighting the transformative role that distributed solar generation could play in the country's energy future. The sector's growth is particularly pronounced in states with high solar irradiance, such as Queensland, New South Wales, and Western Australia, where commercial and residential installations continue to proliferate.

The utility-scale solar segment is experiencing a significant transformation, with numerous large-scale projects either under construction or in advanced planning stages. The industry is witnessing a shift toward more sophisticated project designs that incorporate solar storage solutions and advanced grid integration technologies. This evolution is particularly evident in emerging hybrid projects that combine solar with other renewable energy sources, enhancing grid stability and power availability.

The Australian solar market is characterized by increasing technological sophistication and efficiency improvements across both utility and non-utility installations. The industry is witnessing a transition toward higher-efficiency solar panels, advanced tracking systems, and innovative mounting solutions that maximize energy yield. This technological advancement is accompanied by the emergence of new business models and financing mechanisms that are making solar power more accessible to diverse consumer segments, from large industrial users to residential customers.

Australia Solar Power Market Trends

Government Renewable Energy Targets and Policy Support

Australia's ambitious renewable energy targets and supportive policy framework have emerged as a primary catalyst for solar power market growth. The country has set an aggressive target of generating 82% of its electricity through renewable energy sources by 2030, with solar power expected to play a pivotal role in achieving this objective. This commitment is reflected in various state-level initiatives, such as Queensland's comprehensive renewable energy strategy, which has already resulted in over 780,000 homes and small businesses installing rooftop solar systems as of April 2023, collectively generating approximately 4,500 MW of clean energy. The government's clear policy direction has created a stable investment environment for both utility-scale and distributed solar installations.

The effectiveness of these policy measures is evident in the rapid expansion of large-scale solar installations across the country. In 2023, twelve new solar projects contributed 860 MW to the national grid, with New South Wales leading the deployment by commissioning 8 of these projects. The policy framework has also catalyzed future growth, with 58 large-scale solar farms currently under construction. These developments demonstrate how government initiatives are successfully driving the transition toward renewable energy, creating a robust pipeline of solar projects that will contribute to meeting the nation's renewable energy targets.

Abundant Solar Resource Potential

Australia's exceptional solar resource potential stands as a fundamental driver of market growth, with the country boasting one of the highest average solar radiation levels per square meter globally. This natural advantage provides an ideal foundation for both utility-scale and distributed solar installations, enabling higher energy yields and improved project economics compared to many other regions. The country's vast open spaces and high solar irradiance levels make it particularly suitable for large-scale solar developments, as evidenced by projects like the planned Loxton Solar PV Park in Southern Australia, which will harness these favorable conditions to generate 270 MW of clean energy when commissioned in 2025.

The abundant solar resources have particularly benefited the residential solar and commercial sectors, contributing to Australia's position as a leader in per capita consumption of residential rooftop solar. Queensland's success in achieving the highest rate of household solar rooftop installations in Australia demonstrates how favorable solar conditions, combined with appropriate market structures, can drive widespread adoption. The state's achievement of having one in three homes equipped with solar power systems showcases how natural solar potential can be effectively leveraged to transform energy consumption patterns at the consumer level.

Declining Technology Costs

The dramatic reduction in solar technology costs has emerged as a crucial driver for market expansion in Australia. Large-scale solar PV costs have experienced a remarkable decline, dropping from AUD 135 per megawatt-hour in 2015 to an expected range of AUD 44.50 – 61.50 per megawatt-hour in recent years. This significant cost reduction has improved the competitive position of solar power against traditional energy sources, making it an increasingly attractive option for both utility-scale developers and private investors. The continuing technological improvements and economies of scale in manufacturing have contributed to this sustained cost reduction trend.

The impact of falling technology costs is particularly evident in the commercial and industrial sectors, where improved project economics have led to numerous large-scale rooftop installations. Notable examples include the Brisbane Airport's 5,725 KW installation utilizing 20,937 solar panels and the University of Queensland's 1,220 KW system with 5,004 solar panels. These installations demonstrate how reduced technology costs have made large-scale solar installations financially viable for commercial entities, driving increased adoption across various sectors of the economy. The combination of lower equipment costs and improved efficiency has created a compelling business case for solar adoption, particularly for energy-intensive commercial operations.

Segment Analysis: Type

Solar PV Segment in Australia Solar Power Market

Solar photovoltaic (PV) dominates the Australian solar power market, accounting for approximately 99.99% of the total installed capacity in 2024, with an installed capacity of over 35,070 MW. The segment's dominance is driven by significant cost reductions in large-scale solar PV technology, which has fallen dramatically from AUD 135 per megawatt-hour (MWh) in 2015 to an expected AUD 44.50 – AUD 61.50 per MWh in 2024. The strong growth in this segment is further supported by increasing residential and commercial rooftop solar installations, with Australia having one of the highest per capita consumption of residential rooftop solar globally. The segment's expansion is also bolstered by numerous utility-scale projects under development, with around 6.07 GW of solar power capacity worth AUD 9.53 billion in various stages of construction or planning across the country.

CSP Segment in Australia Solar Power Market

The concentrated solar power (CSP) segment maintains a minimal presence in the Australian solar power market, with only 2 MW of installed capacity. Despite Australia's ideal conditions for CSP technology, including abundant sunshine and plenty of open space, the segment's growth has been limited primarily due to its higher implementation costs compared to conventional solar PV technology. The Commonwealth Scientific and Industrial Research Organization (CSIRO) continues to lead research and development initiatives to enhance CSP technology's viability, focusing on reducing operational costs and improving efficiency. The segment's future potential lies in its ability to provide dispatchable energy supply, allowing power output adjustments based on grid demand, making it more flexible than traditional solar PV plants.

Segment Analysis: PV Deployment

Non-Utility Segment in Australia Solar Power Market

The non-utility segment dominates the Australia solar power market, holding approximately 63% market share in 2024, driven by robust residential and commercial installations. This dominance is attributed to the increasing demand for behind-the-meter solar power solutions, particularly in residential and commercial sectors. The segment's strength is further evidenced by the significant rooftop solar potential in Australia, estimated at around 179 GW with an annual output capability of 245 TWh, exceeding the country's annual power demand. The segment's leadership is reinforced by strong government support through various incentive programs and the growing number of Clean Energy Council accredited installers. Additionally, the medium-scale solar installations (100 kW to 5 MW) within this segment have shown remarkable growth, particularly in business enterprises and government agencies, contributing significantly to the overall market dominance.

Utility-Scale Segment in Australia Solar Power Market

The utility-scale segment is experiencing rapid growth in the Australia solar power market, driven by significant capacity additions and ambitious project pipelines. As of 2024, approximately 6.07 GW of solar power capacity worth AUD 9.53 billion is under construction or scheduled to begin, indicating substantial growth potential. The segment's expansion is supported by declining costs of large-scale solar PV installations, with costs dropping significantly to an expected range of AUD 44.50 – AUD 61.50 per MWh. Major projects like the Sun Cable project, with its planned 10 GW solar array, demonstrate the segment's growth trajectory. The segment's development is further bolstered by increasing corporate power purchase agreements and government renewable energy targets, despite facing some challenges in grid connection and transmission infrastructure.