Solar prices increase amidst China's energy crisis.
Q3 2022 - Solar Price Update
Solar prices hold steady while electricity rates continue to rise.
Q3 was exceptionally busy in the solar industry. A combination of increased renewable certificate prices and increased electricity prices made the already appealing solar business case a no-brainer for many businesses. Despite the increase in demand for solar systems and an influx of system offerings, the solar price index for the last quarter was relatively stable.
This past quarter was a crazy one. We, along with many of the solar retailers I have spoken with, have been flat out. Old leads were calling up with renewed interest in solar, current projects had an increased sense of urgency with progress on client side moving much quicker, and many new projects were cropping up weekly. This is a great problem to have and is exactly what we strive off at Beam Solar. Our platform relies on a high volume of projects going to market to allow competitive pricing from our solar retailers and that is exactly what we saw.
Based on systems offered through the Beam Solar platform in Q3 2022, we saw a 4.5% decrease in price for 99kW rooftop systems, and a 2.3% increase in price for rooftop systems sized greater than 100kW when compared with the previous quarter.
Given the challenges posed on global supply, shipping, and inflation as a result of China's energy supply, Corona Virus, and the Ukrainian war, this is an incredible result and a testament to the resilience of the Australian solar industry.
Another topic that has been hot on everyones mind, is the rise in electricity prices. For a multitude of reasons (which you can read about in our previous market insight here), electricity prices have sky-rocketed since the start of 2022. For companies looking to re-contract their electricity rates this year, they will be confronted with significantly higher site costs moving forward.
Image Source: ASX Energy
With higher electricity costs, comes higher savings from solar and a shorter payback, which partly explains the increased activity in the market this past quarter.
The other contributing factor has been an increase in Large Generation Certificates (LGCs) which rose to record highs this past month. The LGC market value even surpassed the value of Victorian Energy Efficiency Certificates (VEECs) temporarily, which reached record highs earlier this year.
Image Source: Demand Manager
The combination of stable solar system costs, higher electricity rates and increased renewable energy certificate prices has resulted in some of the best paybacks on solar that we have seen. Many behind-the-meter commercial solar projects are showing paybacks of as low as 2.5 yrs. For an asset that is warranted to at least 10yrs and guaranteed to reduce your onsite emissions, there really is no reason to put it off.
If you are interested to know what a solar and battery solution would look like for your business, feel free to reach out to anyone on the Beam Solar Team, or click below to start your own Solar Assessment.