The invisible divide in Australia’s solar landscape
While national headlines focus on a modest 2.47 per cent year-over-year decline in Australia’s solar installations for Q1 2025, this broad figure masks a fascinating story of regional contrasts and emerging trends that are reshaping the future of solar energy across the country.
The Solar Nerds’ latest data reveals that Australia installed 763,320kW of solar capacity across 73,606 systems during the first quarter of 2025. However, analysing the data at a deeper level exposes significant variations that industry stakeholders should be monitoring.
Per capita champions: Small states punching above their weight
When viewed through the lens of per capita installations rather than raw numbers, the solar landscape takes on a dramatically different appearance. South Australia emerges as the clear leader with an impressive 38.58 kW installed per thousand residents in Q1 2025, followed closely by Queensland with 36.97 kW per thousand.
This per capita perspective reveals that some of Australia’s smallest states and territories are embracing solar at rates that outpace their larger counterparts:
| State/Territory | kW per 1000 residents | Systems per 1000 residents |
| South Australia | 38.58 | 3.57 |
| Queensland | 36.97 | 3.82 |
| ACT | 27.36 | 2.45 |
| New South Wales | 27.10 | 2.49 |
| Western Australia | 26.35 | 3.13 |
| Victoria | 24.76 | 2.47 |
| Tasmania | 20.87 | 2.15 |
| Northern Territory | 13.28 | 0.66 |
Particularly notable is Queensland’s performance, which installed the second-highest capacity per capita despite having over three times South Australia’s population. This suggests that solar adoption is becoming deeply embedded in Queensland’s energy culture, transcending the initial adoption phase seen in other regions.
Market concentration vs market growth: An unexpected correlation
Our analysis reveals a surprising relationship between market concentration (measured by the top five retailers’ combined market share) and market growth rates. The data suggests a possible correlation between more competitive markets and stronger growth:
- South Australia: 17.04 per cent market concentration, 20.41 per cent YoY growth
- Western Australia: 19.69 per cent market concentration, 7.83 per cent YoY growth
- Queensland: 17.94 per cent market concentration, 2.29 per cent YoY growth
- Victoria: 14.10 per cent market concentration, 0.60 per cent YoY growth
- New South Wales: 13.73 per cent market concentration, -14.95 per cent YoY growth
While this correlation isn’t perfect (NSW has the lowest concentration but also negative growth), it raises intriguing questions about whether moderately concentrated markets might foster more effective consumer education and market development than either highly fragmented or monopolistic environments.
System size profiles: The Northern Territory anomaly
Perhaps the most striking finding from our analysis is the Northern Territory’s dramatically different system size profile compared to the rest of Australia. While the national market averages 75 per cent small systems (0-15kW), 15 per cent medium systems (15-40kW), and 10 per cent large systems (40kW+), the Northern Territory stands apart with a distribution of 38 per cent small, 34 per cent medium, and 28 per cent large systems.
This unique profile has resulted in NT having an average system size of 20.24 kW—nearly double the national average and more than twice Western Australia’s 8.41 kW average. This suggests fundamentally different market drivers in the Territory, likely reflecting its remote communities, commercial focus, and distinct climate conditions.
At the opposite end of the spectrum, Western Australia’s installations are dominated by small systems (81 per cent), resulting in the nation’s lowest average system size at 8.41 kW.
Behind the scenes: The invisible STC market concentration
While much attention focuses on solar retailers, the Q1 2025 data reveals an astonishing level of concentration in the Small-scale Technology Certificate (STC) trading market—the financial backbone of Australia’s solar incentive system.
The top five STC traders command a remarkable 51.22 per cent of the national market, with market leader Formbay Trading alone controlling 27.21 per cent. This level of concentration vastly exceeds the retail market, where the top five companies collectively hold just 12.20 per cent market share.
This concentration is even more pronounced in certain states:
- Queensland: Formbay Trading controls 30.39 per cent of STC trading
- New South Wales: Formbay Trading holds 28.85 per cent market share
- Western Australia: One Stop Warehouse Finance dominates with 24.27 per cent
This hidden aspect of market concentration raises important questions about pricing power, market efficiency, and the distribution of financial benefits from Australia’s renewable energy incentive system.
Retailer strategies: Size efficiency reveals business models
Analysing the average system size by retailer provides fascinating insights into different business strategies. Among national leaders:
- Sun Retail stands out with the largest average system size (10.99 kW)
- Hello Solar and Sunboost follow with 9.71 kW and 9.56 kW respectively
- Origin, despite being the market leader by volume, installs relatively smaller systems (9.08 kW)
- Energy Build has the smallest average system size among major retailers at just 5.94 kW
These differences reflect distinct business models and target markets, from premium residential installers focusing on larger, higher-margin systems to volume-oriented businesses targeting the entry-level market segment.
Looking forward: Implications for industry stakeholders
For installers, manufacturers, and service providers, these nuanced trends offer valuable guidance beyond the headline numbers, pointing toward a market that is evolving from broad adoption to specialized market segments with distinct characteristics and needs.
As Australia’s solar market continues to mature, success will increasingly depend on understanding these regional variations and tailoring approaches accordingly, rather than pursuing a one-size-fits-all strategy in what has become a diverse and sophisticated energy landscape.
Data source: Solar Nerds. Analysis based on STC registration data for systems 100kW and less. Population figures based on 2025 projections.
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