Strategic Planning Model for the Australian PV Sector

ITP were engaged to develop a techno-economic simulation model that allow the impacts of changes to the characteristics of PV technology, deployment, financing and incentive policies to be assessed. This enabled the Australian Photovoltaic Institute to review proposals for likely cost impacts and macroeconomic benefits.


In order to support the development of an innovative and globally competitive PV sector in Australia, industry and policy makers need to be able to test the impact of technical, financial, commercial and policy changes on the operation of the PV industry, as well as on system cost, design and performance. These tools can highlight opportunities to improve efficiency or reduce costs, design appropriate incentives to accelerate commercial deployment, and maximise economic benefits to Australia. The work included:

  • developing a model structure which allows calculation of the levelised cost of electricity (LCOE) using a range of inputs from sub-models of the PV and balance of system (BOS) technologies, the site, the system, the cost of finance and the return on investment required by the project developers
  • collecting a range of data to test the model sensitivities and ensure reasonable outputs
  • for the three different markets (wholesale, commercial, and residential), using the LCOE to identify the feasibility gap between the current LCOE and either grid parity for end-user applications, or an acceptable internal rate of return (IRR) for a wholesale system
  • once the feasibility gap was known, identification of the areas which would reduce that gap in the quickest manner with the maximum degree of benefit to Australia through a sensitivity analysis.