The capacity of rooftop solar on Australian homes and businesses is expected to overtake that of coal fired generation within the next decade – underlying the dramatic change of power in the energy sector, and the massive investment by consumers in their own electricity needs.

The forecast comes from the Australian Energy market Operator, which predicts that rooftop solar – currently standing at around 4.2GW – will continue to grow to as much as 25GW by 2034.

At some point in the next decade, this means, the installed capacity of rooftop solar will overtake that of coal-fired generation, which is currently at around 27GW but will decrease dramatically in coming years as plants such as Playford, Northern, Liddell and others are closed down and phased out.

The change in the electricity mix is so dramatic that AEMO now has separate categories for electricity demand – from centralised sources such as coal and gas fired generators, and decentralised sources such as rooftop solar.

Its forecasts for grid consumption are now guided by various scenarios in the take-up of rooftop solar, from low to near near saturation coverage of rooftop solar for homes and businesses by 2035. In South Australia, it predicts that within a decade, there will be zero demand from the grid at certain times due to the proliferation of rooftop solar.

This conforms to the growing view, in research (CSIRO) and industry circles (Engie, the owner of Hazelwood power plant), that at least half of all demand in Australia will be sourced locally – via rooftop solar and battery storage – relegating the role of centralised generators such as coal-fired power stations.

It also suggests that while investments in large scale renewables could become hostage to policy uncertainty at the federal level, homes and businesses are willing to invest tens of billions into rooftop solar to transform their own consumption profiles.

AEMO’s medium scenario forecasts are included in the table above. It suggests that the extraordinary growth in rooftop solar of the last few years will continue, despite the reduction in subsidies and the growing saturation of the market, and blips in the market identified by industry analysts SunWiz.

AEMO sees the household market growing at rate of around 600-700MW a year, with the commercial market also growing strongly – and accounting for one quarter of all installations, up from around one tenth now – as businesses look to source much of their own generation.

But it’s high scenario suggest installations could grow much quicker, with a 20 per cent higher total between 2024 and 2034, or around 25GW. This is nearly double its forecast for solar of just three years ago.



The forecasts are included in the National Electricity Forecasting Report released on Thursday. In it, solar PV and the LNG export boom figure as the major influencers on electricity demand in future years.

Demand has fallen on average by 1.5 per cent in the last five years, but is forecast to grow by 2.1 per cent in the coming three years, largely as a result of the energy needs of the massive LNG plants being brought into operation in Queensland.