Renewables in Australia had a record year in 2024. As we inch closer to 2050, there are a range of exciting possibilities for households, businesses and industry alike.
The energy transition is amongst Australia’s most important challenges. The technological, environmental, societal, economic and political issues associated with decarbonising our economy are well understood and extensively documented. However, the transition of our energy systems presents equally significant opportunities, including for energy consumers, power producers, infrastructure owners, project developers and private capital investors.
The National Energy Market reached an average of 40 per cent renewable energy generation last year. Progress made and the necessity to enhance efforts further were highlighted in the Climate Change Authority’s recent Sectoral Pathways Review and its Annual Progress Report to Parliament.
A key opportunity exists for more households and businesses to become renewable energy producers by installing rooftop solar and battery systems. With over four million already participating, there is still potential to increase, particularly through the use of business rooftops and by enhancing battery storage uptake to manage peak generation and demand.
The market for industrial power demand is also evolving as many companies seek to obtain and cancel large scale renewable energy certificates (LGCs) to prove the use of renewable energy, which then supports investment in new large-scale wind and solar projects. Over 10 million LGCs were voluntarily surrendered in 2024 by companies seeking to meet publicly declared climate targets. This trend will continue as companies electrify production processes in response to the Safeguard Mechanism and the new mandatory climate-related financial disclosures.
Record year
A total of 7.4GW of new wind and solar capacity, both small and large-scale, was added under the Renewable Energy Target (RET) in 2024, surpassing the 2020 record of 7.16GW.
There was a notable increase in approved capacity for large-scale renewable energy power stations generating. This is partly due to the approval of Australia’s two largest wind farms, MacIntyre (923MW) and Golden Plains Stage 1 (756MW), under the RET. The new generation capacity is primarily wind-based (70 per cent) and is anticipated to significantly boost the share of renewables as these power stations reach full generation capacity in the latter part of this year.
In the small-scale sector, the installation of four million rooftop solar systems across Australia contributes approximately 12 per cent of the country’s electricity generation. Consumers benefit from the Small-scale Renewable Energy Scheme (SRES), which can lower system purchase costs by about 30 per cent for rooftop solar, solar water heaters, and air-sourced heat pumps. On average, it takes around four years for households and businesses to recoup their investment in these systems.
Lessons learnt
The Clean Energy Regulator (CER) has worked to consistently improve the integrity of the SRES including through product standards, accreditation of installers and a rigorous compliance system that includes an independent inspection program.
However, it was concerning in 2024 to see a small number of operators within the SRES exploiting the system. Of particular concern was reporting of system retailers not being paid by a small number of agents following their creation and sale of certificates under the scheme.
In response, we executed a monitoring warrant at the offices of a business we believe to be part of a network of companies. Other companies within this network have been deemed no longer fit and proper by our assessment and have had their registration permanently suspended under the Renewable Energy (Electricity) Act 2000.
We are very concerned about the impact on small business retailers and we’re working with other authorities to support them.
It is crucial to learn from such instances to protect installers and retailers and maintain consumer confidence in the scheme. It cannot be overstated how essential it is for installers and retailers to conduct thorough due diligence in all contractual matters with agents. There are many quality agents in the scheme with strong track records of working with retailers.
At the CER, we’ll continue to show zero tolerance for those who show willful non-compliance in our schemes.
What to expect in 2025
This year we expect an average of 45 per cent renewable energy in the grid, well past the halfway mark of the targeted 82 per cent by 2030. Rooftop solar will play a significant role in meeting targets while reducing energy costs for consumers. Costs for panels have decreased significantly, now below pre-pandemic levels. Housing constructions are increasingly incorporating solar panels into their comprehensive packages, with solar roofing becoming standard for new builds.
Replacement systems are eligible under the SRES and constitute a significant portion of installed capacity – approximately 300MW (10 per cent) last year. Replacement rooftop PV systems are increasing overall rooftop capacity, with systems in 2024 averaging 5.4kW larger than those they replace. This development aligns with the objectives of the Renewable Energy Electricity Act.
Another aspect is the expanding workforce in the sector, with the Federal Government aiming to create over 60,000 clean energy jobs in Australia by the end of 2025.
The next five years
Australia has a strong foundation for renewables, and this momentum needs to increase.
New generation will be advanced through the Guarantee of Origin (GO) scheme, which will certify renewable electricity and low-emission products. Digital certificates will track production and ensure integrity through validation by the CER.
Renewable energy power stations have five more years to generate large-scale generation certificates under the RET but can start getting ready to participate in the Renewable Energy Guarantee of Origin (REGO), expected later this year.
In addition, the Australian Government’s expanded Capacity Investment Scheme – now extended to 2027 to accelerate investment in renewable generation and battery storage as demand grows and ageing coal power stations retire – aims to add 32GW of capacity by 2030.
It is an exciting time for the renewables industry leading on practical action to address climate change. There’s an almighty push for Australia to reach its climate targets and the next five years will see big changes across the renewable energy landscape.
For more information, visit cer.gov.au
