Introduction: A Maturing Market in Flux
Australia’s solar sector is evolving rapidly, and Q2 2025 has made that clearer than ever. While small-scale rooftop solar once represented the country’s most consistent renewable success story, this quarter revealed deepening regional differences, slowing growth, and a major structural shift on the horizon: the rise of solar battery storage.
At Solar Rains, we believe understanding these changes is critical not just for industry insiders, but for every household and business investing in clean energy. Here’s our take on the latest data and what it means for the future.
NSW’s Solar Contraction: Market Saturation or Temporary Setback?
New South Wales has long led the national rooftop solar market—but Q2 saw a sharp 30.9% year-over-year decline in installations. This wasn’t just the worst drop among all states, it marked a psychological shift.
Three potential factors stand out:
- Market saturation: Many early adopters have already installed systems.
- Grid constraints: Export limits and delays in approvals may be slowing uptake.
- Reduced consumer confidence: Media attention on feed-in tariff cuts and rising complexity may be impacting decision-making.
For solar retailers in NSW, these headwinds highlight the need to pivot—from volume-based strategies to value-added services like solar battery upgrades, hybrid inverter integration, and long-term energy savings plans.
Tasmania’s Steady Hand: Lessons in Regional Resilience
Tasmania bucked the trend, with only a modest 3.64% decline in installations. Why does this matter?
- Smaller market, but steady demand: Tassie shows that consistent consumer trust and local support programs can sustain demand even in turbulent periods.
- Favourable financing: Platforms like Solaris Finance and local community energy schemes have kept upfront costs manageable.
- Weather & climate advantage: Mild temperatures reduce degradation and increase returns on solar & battery systems.
Tasmania’s model may offer clues for maintaining momentum as other states approach residential saturation.
Queensland’s Rise: A New Leader in Rooftop Solar?
For the first time in years, Queensland essentially tied NSW in total kW installed in Q2, 181,761 kW vs. 180,154 kW. That’s more than a statistical curiosity. It marks a new battleground for solar growth.
Queensland’s drivers include:
- Sunshine advantage: High solar yield makes rooftop systems extremely cost-effective.
- Supportive state policies: Targeted rebates and zero-interest loans have spurred adoption.
- Battery adoption readiness: With high daytime production, QLD is well-positioned to lead the shift to solar + storage.
The Commercial Sector: Australia’s Untapped Solar Frontier
Residential systems (0–15 kW) still dominate, 74% of all installations nationally. But the Northern Territory is pointing to what’s next.
There, 62% of systems exceed 15 kW, signaling strong commercial & industrial uptake. By contrast:
- Queensland: 78% residential
- Tasmania: 86% residential
- NSW, SA, VIC, ACT: More balanced, but still residential-heavy
This signals a missed opportunity. As small businesses face rising energy costs, tailored commercial solar solutions—particularly those bundled with backup batteries and peak demand-shaving technologies—could represent the next big boom.
At Solar Rains, we’re working on B2B packages that address this exact gap. Stay tuned.
Behind the Scenes: Market Structure & Installer Fragmentation
Q2 data also reveals a striking divergence:
| Market Segment | Concentration Level |
| Installers | Highly fragmented (top installer has only 3.54% market share) |
| STC Traders | Highly concentrated (top 5 manage over 50% of all trades) |
This mismatch creates risk:
- Installers depend on timely STC payments, delays or bottlenecks can impact cashflow.
- Consumers face uneven quality & pricing due to lack of standardisation.
- Consolidation (e.g., Origin Energy acquiring SolarQuotes) could reshape how customers discover & trust solar providers.
This is why Solar Rains invests in both technical education and transparent quoting tools—to help cut through the noise.
The Platform Paradox: Innovation or Homogenisation?
Installers now rely heavily on just two proposal platforms—Pylon and OpenSolar. While this improves efficiency, it also makes customer experiences almost identical. From system sizing to layout to financial modelling, everything looks… the same.
This trend raises two challenges:
- Harder to differentiate: Good installers can’t easily show why they’re better.
- Customer confusion: Proposals look slick but may hide critical differences in product quality, after-sales support, or upgrade pathways.
Solar Rains’ approach: we personalise each proposal with clear, branded options, including hybrid inverters, battery compatibility checks, and long-term ROI projections, so customers know they’re not just buying a box of panels.
Batteries Are Coming: Q3 Will Be a Turning Point
Starting from Q3 2025, Australia’s solar statistics will include battery installations for the first time.
This change reflects a profound industry shift:
- The Cheaper Home Batteries Program is already making waves—with over 50,000 systems installed in 2 months (per CER).
- Battery size is rising: Q2 average was 18–19kWh per install, showing strong consumer demand for meaningful backup.
- STC-based data will help track attachment rates & battery–solar combos, reshaping how we define solar success.
For Solar Rains, this data is gold. We’ll finally see which products (like our Sofar PowerAll All-in-One ESS) are gaining traction, and where to scale marketing and support.
Strategic Takeaways: What It Means for Solar Rains & Our Customers
- For residential clients: Expect more bundled offers with solar + storage, especially in NSW and VIC where grid support is increasingly limited.
- For commercial clients: Look beyond 15 kW. With rising electricity prices, now is the time to invest in self-generation and peak demand reduction.
- For the industry: Balance innovation with consumer transparency. Batteries add complexity, clear education is key.
- For Solar Rains: We’re doubling down on smart battery solutions, certified installer training, and localised data-driven support across regions.
Looking Ahead: Solar Rains Is Here to Help
Whether you’re a homeowner curious about backup power, a business seeking to cut energy costs, or an installer needing a reliable product partner—Solar Rains is your energy ally.
We offer:
- GCR-certified battery storage options
- All-in-one hybrid inverter + battery systems
- Transparent, flexible solar solutions tailored to your postcode
FAQs
NSW is experiencing reduced consumer confidence, possible market saturation, and policy-related delays. It’s a signal for consumers to pivot to storage-based upgrades.
With federal subsidies in place now, it’s the best time to install. Waiting may cost you missed savings.
The average size now sits around 18–20kWh. It depends on your usage, blackout risk, and solar system size.
Yes, but in a different shape. Expect more bundled solar + battery packages and commercial system growth.
We provide expert guidance, GCR-backed products, and full support whether you’re upgrading or starting fresh.
