Industry News

Decreasing construction costs leads to Australian solar boom

As momentum builds in the solar sector there has been a noticeable decrease in the cost of building large-scale solar farms. This has led to a boom of new projects in Australia with bigger projects now able to get off the ground.

The decreasing costs of solar farm construction can be attributed to a number of factors, including international and local improvements, technology becoming more competitive, cheaper construction costs, and a more competitive solar construction sector.

In the report State of solar 2016: Globally and in Australia by the Australian Climate Council, it was found that costs for new large-scale solar projects have become cheaper than for new coal and nuclear projects.

Costs have been falling so fast that as-built costs for solar have been consistently cheaper than projections, with solar PV costs decreasing 58 per cent in the past five years.

According to statistics from the Australian Renewable Energy Agency (ARENA), in 2014 the grant funding needed was $1.60 per watt and by September 2016, the average requirement was 0.19 cents per watt. Additionally, it found that construction costs have reduced by around 40 per cent in this time.

With costs decreasing rapidly, more and larger solar farms are being built in Australia, and within the next 20 years the Australian Energy Market Operator (AEMO) predicts that over 20GW of capacity will be reached, which is about a third of Australia’s current total power generation capacity of 63GW.


Before ARENA announced $92 million in grant funding for large-scale solar projects in early 2016, Australia only had four commissioned solar farms. However, the funding has led to an increase in projects, with the competition helping to drive down the costs of construction.

The decreasing costs of solar construction has prompted companies to move forward with construction of large-scale solar farms, allowing them to begin with or without government funding. One such project is a $1 billion battery and solar farm planned for construction at Morgan in South Australia. Once completed, it will be one of Australia’s largest solar farms, with 3.4 million solar panels and a capacity of 330MW solar generation. This is 228MW more than the 102MW Nyngan facility in New South Wales, which is currently Australia’s largest constructed solar farm.

Read the rest of this article from the June 2017 edition of Infrastructure Magazine here (PDF, 1.5mb)