To the Editor

Six months after Australia's carbon pricing mechanism came into effect there has been an 8.6% reduction in emissions from the electricity sector1. Not surprisingly, most of this reduction has come from factors not directly related to the introduction of a price on carbon. Scheduled curtailment of coal-fired generators along with the shutdown of much of a major brown-coal generator due to flooding has reduced emissions intensity. Decreased electricity demand from lower manufacturing output and continuing energy efficiency measures have also played a part.

But it has been the contribution from residential photovoltaic (PV) panels that has surprised many. In 2011–2012, solar PV is estimated to have generated 0.9% of energy in Australia, playing an important role in the observed emissions reduction2.

Although this is a small percentage of overall demand, it needs to be considered in terms of Australia's PV capacity five years ago. In 2008, Australia only had 23 MW of installed PV capacity3. Following the introduction of generous subsidies, combined with a substantial drop in the price of equipment, the rate of PV installation increased dramatically. Australia now has more than 2 GW of PV capacity, forecasted to generate 2,473 GW h or 1.3% of national annual electricity in 2012–20132.

As retail electricity prices continue to increase across Australia — and with PV approaching parity with main grid prices in some locations — PV systems can now achieve payback periods within 10 years for residential applications. The commercial uses for PV are largely unrealized, but represent significant opportunities for growth, as larger systems can be deployed more cost effectively, and load during the day can be more closely matched to generation.

Within the next 10 years, it has been estimated by Australia's Energy Market Operator that PV could provide 3.4% of annual electricity in Australia based on medium growth projections2. And this could be a conservative estimate. An analysis by investment bank UBS in early 2013 suggests that electricity demand could be reduced by up to 9% by 2020 in the key solar markets of Germany, Italy and Spain4. PV deployment on this scale will represent a significant drop in emissions, as this demand would no longer need to be met by the centralized energy market.

This is all occurring as new PV technologies are progressing through the pipeline. In Australia, one focus of the national science agency is on cheap modules of printable organic thin-film PV panels. Other technologies enabling widespread uptake, such as battery storage, are on the cusp of a rapidly declining price trajectory. These are just some of the examples of 'game-changers' in making PV generation available on a mass-market scale. And although this may result in cheap, grid-independent electricity for customers, ubiquitous global PV will also be doing so much more for the world's targets for climate change mitigation.