Game-changing rooftop solar boom is squeezing the profits out of coal power in Australia
Solar power briefly turned electricity prices negative in QueenslandAustralia is known for its coal, which provides over 80% of its electricity and is a big export, but someday soon it might be known for its solar power. Thanks to rapidly falling solar PV prices, there's been a rooftop solar boom in Australia. It's now reaching a point where few coal generators made money last year, and even fewer will make profits this year... Wholesale energy pricing even briefly went negative in the middle of the day (see graph below) recently in the middle of the day in Queensland where there is 1.1 gigawatt of solar spread over more than 350,000 buildings.
Australia as a whole has about 3.4GW on 1.2 million buildings!
Australian Energy Market Operator/Screen capture
Eventually, coal won't be able to compete with solar at any price:
let’s imagine that the wholesale price of electricity fell to zero and stayed there, and that the benefits were passed on to consumers. In effect, that coal-fired energy suddenly became free. Could it then compete with rooftop solar?
The answer is no. Just the network charges and the retailer charges alone add up to more than 19c/kWh, according to estimates by the Australian energy market commissioner. According to industry estimates, solar ranges from 12c/kWh to 18c/kWh, depending on solar resources of the area, Those costs are forecast to come down even further, to around 10c/kWh and lower. (source)
The next step will be for people to get some storage and go off the grid to avoid having to pay these network charges. Australian solar installers are already reporting that "between 15 and 20 per cent of solar customers are asking about storage, and that rate is increasing each month."
With companies like Tesla having ambitious goals to cut battery prices down over the next few years with gigafactories, the combo of cheap solar PV + cheap battery storage will be hard to beat. Dirty power sources will simply stop being competitive.
Australia has lots of sun and high network costs, so it's at the forefront of this movement. But most other countries will follow at their own pace. The best things we can do to accelerate the switch over to clean energy is to stop subsidizing fossil fuels, create regulation that is more friendly to rooftop solar (net-metering, for example), and put a price on carbon emissions.