For years, rooftop solar has been a major success in Australia, offering households significant savings and helping reshape the energy grid. This growth is now slowing. In 2025, the number of new rooftop systems installed has dropped compared to the previous year, suggesting the once-thriving market may be reaching its peak. More homes are installing batteries to store power, while fewer are adding new solar panels, raising questions about the future of household renewable energy.
Several factors have long supported rooftop solar, including falling panel prices, government incentives and high electricity costs. Since the early 2000s, these elements have encouraged millions of households to adopt solar as a way to reduce energy bills and carbon emissions. Currently, around four million homes across Australia have solar systems. However, with most suitable detached homes already equipped, the market is maturing and the pace of new installations is starting to reflect that reality.
Regulatory data shows that rooftop solar installations between January and September 2025 are at their lowest level in three years, with no month showing growth compared to 2024. Although average system sizes are increasing, the total amount of new rooftop capacity is declining. This trend is not only driven by reduced demand but also by shifting industry focus. Retailers are working to keep up with record demand for home battery systems, supported by recent federal and state rebates. Since July, around 135,000 households have taken up battery installation subsidies.
Other contributing factors include reduced feed-in tariffs, which are payments households receive for exporting solar power to the grid. These have fallen due to lower daytime electricity prices, making it more cost-effective to store or use solar energy at home rather than selling it back to the grid. Also, most owner-occupied homes already have solar, while uptake among renters and landlords remains limited, slowing further expansion.
This shift highlights broader challenges for Australia's energy transition. Small-scale rooftop solar has played a key role in emissions reduction, but further gains depend on scaling up larger renewable projects such as wind and solar farms. These projects are facing delays, rising costs and local opposition. Not a single major wind or solar farm reached financial close during the third quarter of 2025, casting doubt on whether national energy targets for 2030 will be met. One positive development is the rapid rollout of large-scale batteries, which have progressed at record speed and are helping offset some of the slowdown in other areas.
