Mr Grimes cited a range of policies during the past three years, such as the failed bids by the Abbott government to eliminate the Australian Renewable Energy Agency (ARENA), and the broken promise to support 1 million additional solar-powered homes, that amounted to a "ideological war on solar". In sunnier Australia, the signs are that things are beginning to change Credit:Justin McManus Even after September's change in prime minister to Malcolm Turnbull, the Coalition still had no solar target, no target for renewable energy beyond 2020, and had "not provided one supportive policy" for the industry, Mr Grimes said. (See chart below of new installations according to the Clean Energy Regulator, including figures for the first four months of 2016.)

Darren Gladman, solar policy manager at the Clean Energy Council, attributed the drop of solar installations in part to the winding back of generous state schemes. He noted, though, that unease among investors over the Abbott government's handling of the review of the 2020 Renewable Energy Target had also dented demand for small-scale solar. While solar panel penetration had reached saturation point in some parts of the country, Labor and the Greens were both offering policies worth about $100 million to open up new areas of demand such as among renters and low-income houses, Mr Gladman said. "If you're not able to access solar, you're paying more for electricity than you otherwise could," he said. According to the Clean Energy Council's Annual Report, the drop in installations has occurred in most states and territories since the peak year of 2011. (See chart below.)

Kobad Bhavnagri, head of Bloomberg New Energy Finance in Australia, said "the government has basically not touched the rooftop sector". While ditching the pre-2013 election pledge of 1 million additional solar homes amounted to a broken promise by the Coalition, "it was pretty rational to not introduce further subsidies to a well-supported sector which is already economical", Mr Bhavnagri said. Under the existing renewable energy target, households get a reduction in the up-front capital costs of a new system of about 30 per cent. According to Bloomberg NEF data, last year a typical household could expect savings on their electricity bills to pay off the cost of their systems in six years. By 2030, further advances in technology should lower that to five years.

The cost of batteries, which have the potential to bolster solar panels' appeal, now have a payoff period of about 19 years but that should drop to eight years by 2030, Bloomberg predicts. (See Bloomberg chart below showing solar module costs in US dollars diving 80 per cent since 2008.) While the residential market is struggling, the industry is increasingly turning to commercial customers, Mr Gladwell said. These now account for about 30 per cent of sales by capacity. The industry is also looking to large-scale solar farms as a growth area as uncertainty over the 2020 Renewable Energy Target recedes. Earlier this month, the NSW government gave planning approval for four new plants that would double the state's existing solar farm capacity.