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Solar energy on the rise

The global electricity industry is moving towards a model that is more diverse in generation and ownership, with the increasing integration of renewable energy into the energy mix.

According to Navigant Research, the electric power industry is developing so that it will no longer rely on the older model of large centralised power plants which are owned by utilities.

Distributed solar photovoltaic systems are making more sense as they can produce power onsite - so there's no need from electricity suppliers to build costly new transmission capacity, something that can often drive up electricity prices.

Australia has the perfect conditions for renewable energy such as solar power. The vastness of the continent paired with its hot and sunny weather makes the country a solar energy hotspot.

Australia has the highest solar radiation per square metre of any continent, receiving 58 million PJ of solar radiation per year - that's 10,000 times more than the nation's total energy consumption.

Yet currently, according to Geoscience Australia, solar energy only accounts for providing approximately 0.1 per cent of Australia's total energy consumption despite its immense potential.

However with the model of energy generation changing, this percentage may increase.

Navigant Research has predicted that 220 GW of distributed solar PV capacity will be installed between 2013 and 2018, which will amount to $540 billion in revenue throughout that period.

"Used in applications ranging from residential to small commercial to industrial settings, distributed solar generation offers significant benefits to consumers while adding resiliency to an electric grid evolving beyond the traditional centralized model," said Dexter Gauntlett, research analyst with Navigant Research.

"Though this market is still primarily driven by government incentives, distributed solar PV will continue its steady march toward grid parity in major markets over the next few years."

Navigant Research also comments on how while solar technologies are becoming cheaper and more cost-effective, governments are reining in their feed-in tariffs, creating a certain level of instability in the industry.

An Australian example of this is Queensland's recent downsizing of its solar feed-in scheme.

In 2012, solar markets in Italy and Germany contracted while growth continued in the US, China and Japan, amongst other countries.

The Asia-Pacific region is a promising one for increased solar energy as emerging nations look for ways to address increasing electricity demands and the desire for a greater level of energy independence.

Posted by Charlie Moore