Solar Power in Australia: 2025 Update

Solar power in Australia is a cornerstone of the country’s renewable energy transition, providing a reliable and cost-effective solution for reducing reliance on fossil fuels. Driven by changing market conditions, government incentives, and a growing emphasis on long-term sustainability, both households and businesses are expected to continue adopting solar in significant numbers throughout 2025.

With new technologies and financial models making solar more accessible than ever, its role in Australia's energy future is only set to grow.

The Current State of Solar Power in Australia 

As of early 2025, over 4.1 million homes and small businesses across Australia are generating their own renewable energy through solar power (Solar Panel Install Statistics and Facts in Australia, n.d.). That’s 32.3% of households (more than 3.2 million) and 13% of small businesses now using solar electricity, with plenty more planning to jump on board soon (Henderson, 2025).

Australia’s impressive 40.6 gigawatts (GW) of installed solar capacity comes from over 4.09 million photovoltaic (PV) installations, including everything from home rooftops to massive solar farms. This makes us a world leader in solar uptake - and at Smart Commercial Solar, we’re proud to be driving that momentum by helping businesses cut costs, reduce emissions, boost energy independence, hit ESG targets, and transition to a smarter and more sustainable future.

Residential vs Commercial Solar Growth in 2025

Compared to 2024, there were 1.48% fewer new rooftop solar systems installed on residential buildings in the first quarter of 2025. That dip is mainly due to higher borrowing costs, lower feed-in tariffs, and a market that’s starting to reach saturation. While things have slowed down a bit, residential installers still make up around 75% of all systems (0-15kW), so the demand is definitely still there.

That being said, the commercial solar market is picking up, even if it’s not quite at the pace the industry would love. In 2024, commercial installations cracked 1GW for the first time in a single year, and that upward trend is expected to keep going strong in 2025. More and more businesses are jumping on board to strengthen energy resilience, cut operating costs, and show real leadership when it comes to sustainability. And thanks to that momentum, Australia’s total solar capacity is still climbing, with strong commercial growth helping to balance out the slowdown on the residential side.

Government Incentives and Rebates Fuelling Solar Adoption

Numerous federal and state incentives that lower upfront costs and increase financial returns are advantageous to Australia's solar market:

• Small-scale Technology Certificates (STCs) offer up-front savings on solar and battery systems for homes and small businesses. 
• Launched in July 2025, the Cheaper Home Batteries Program provides a 30% discount on qualified home battery installations.
• States such as New South Wales encourage participation in Virtual Power Plants (VPPs) and offer rebates for solar and batteries.
• Depending on the size of the system, businesses can receive commercial solar rebates of up to $50,000 and tax incentives of up to $20,000 for energy-efficient upgrades. 
  
  
  

How Australian Businesses are Using Solar to Cut Costs and Boost Sustainability

Businesses throughout Australia are rapidly increasing their solar investments in 2025 due to a combination of rising electricity costs, strong government incentives, and growing ESG responsibilities. Rather than a future objective, solar energy is now a key strategy for operational efficiency and competitive positioning.

Here’s what’s happening in different industries right now:

• Woolworths is getting closer to its goal of getting all of its electricity from renewable sources by the end of 2025 by putting rooftop solar at more than 150 of its locations nationwide. Peak energy prices and emissions are significantly reduced by these technologies.
• IKEA has partnered with Smart Commercial Solar to extend their rooftop solar system at their Marsden Park Distribution Centre. With their system now totalling 2MW (with an additional 1.1MWh battery storage) IKEA has significantly increased on-site clean energy generation and reduced costs, setting a new standard for sustainability in retail operations. 

• Large-scale adoption is being led by the food and beverage manufacturing sector: At its new $400 million factory in Queensland, Suntory Oceania installed a 3.2MW rooftop system. Coca-Cola Europacific Partners intends to run entirely on renewable energy by the end of 2025.
• Mining and resource companies are installing 10–50MW solar-battery microgrids in off-grid and fringe-grid locations to reduce their diesel dependency and comply with stringent ESG reporting requirements.
• Storage and logistics facilities are using solar and batteries to power automated systems and AGVs to boost resilience and lower peak demand fees.

The Growing Role of Battery Storage

Battery Storage is becoming a bigger piece of the solar puzzle, and fast. In the second half of 2024, 28.4% of new rooftop solar systems included a battery, showing just how much demand for energy independence is on the rise.

In a major milestone, battery sales actually outpaced rooftop solar PV sales for the first time in Q2 2025, according to Sunwiz (Vorrath, 2025). It’s a clear sign that households and businesses alike are looking for smarter ways to store and manage their energy.

More than 74,500 home batteries were installed across Australia in 2024, which is a huge 58% jump compared to the year before (Thornton, 2025). While much of that growth has been driven by state-level incentives like NSW’s Peak Demand Reduction Scheme, it’s also highlighting the need for a coordinated national rebate to make batteries more accessible across the board. 

At Smart Commercial Solar, we’re seeing firsthand how battery integration is helping businesses improve energy resilience and maximise solar savings. Through programs like the government’s battery rebate for businesses, we help clients access support that covers up to 50% of installation costs, making it easier than ever to add a battery, reduce peak demand charges, and stay ahead of rising energy prices. It’s all about future-proofing your energy setup while keeping costs in check. 

Solar Powers Impact on Australia’s Net-Zero Goals

Solar energy is a big part of Australia's goal of reaching net-zero emissions by 2050. The National Electricity Market's emissions have dropped by nearly 40% since 2015, primarily due to the use of solar and other renewable energy sources.

Along with policies that reduce emissions and boost renewable capacity nationwide, the government also provides funding for massive solar and battery projects in high-priority regions like Central Queensland and the Hunter Valley.