Australia is a world leader in solar generation, with unmatched access to sunlight and a significant pipeline of renewable energy projects. But the pace of technological advancement is now outstripping the capacity of Australia’s energy system to accommodate it. Curtailment is rising, transmission is delayed, and grid constraints are dampening the return on new investment. As new solar technologies like perovskites promise step-change efficiency gains, the risk is that Australia will not be ready to capture their value. The promise of next-generation solar depends on fixing the physical and commercial limits of the National Electricity Market (NEM) that governs how solar is used.
The curtailment problem
Curtailment occurs when network capacity is insufficient to transport electricity from generation sites to demand centres, particularly in areas not originally designed to host large-scale renewable projects. According to the Australian Energy Market Operator (AEMO), new solar farms in Victoria and South Australia could be forced to curtail up to 65 percent of their generation by 2027 due to delays in transmission infrastructure[1]. AEMO’s forecasts apply to hypothetical 300 megawatt solar projects and reflect growing grid congestion across the NEM.
This mismatch between generation and transmission capacity arises from the way the NEM’s transmission framework operates. Under the current open access regime, generators have the right to connect to the grid but no guaranteed right to export electricity. Transmission network service providers (TNSPs) are primarily obligated to invest to meet reliability standards for consumers and not to provide firm access for generators. As a result, the cost of expanding shared transmission infrastructure is recovered from consumers, and there is no commercial incentive for TNSPs to build capacity solely to accommodate additional generation. While generator-funded augmentations are permitted, they do not confer guaranteed access or dispatch rights, which limits their commercial appeal.
In practice, this means that generation is being added in locations with strong solar or wind resources, but the supporting transmission infrastructure often lags. Until transmission is built out and storage scaled, building more solar adds limited value if the grid cannot absorb the additional output. In many cases, additional generation will face the same bottlenecks, delivering diminishing returns and delaying the decarbonisation objectives these projects are intended to support.
Why silicon dominated solar for decades
For over 40 years, silicon photovoltaic technology has been the backbone of global solar deployment. Silicon is abundant, stable, and benefits from decades of sustained investment in research, manufacturing, and supply chain development. It also aligns with the expectations of conservative project finance. Silicon panels are bankable and backed by long-term warranties.
Silicon performs well in high-irradiance conditions and maintains reasonable stability over 25 to 30 years[2]. It has benefited from scale as production volumes increased, costs dropped dramatically and making silicon panels more affordable than ever.
However, silicon has several limitations. Its theoretical efficiency limit is approximately 29%, and most commercial panels operate below 24%[3]. Improvements are becoming marginal and expensive. The panels are also rigid, heavy, and require high-temperature manufacturing, which contributes to higher embodied carbon. Silicon’s dominance came from technical maturity and commercial certainty, but new technologies like perovskites may overcome these limits.
The promise of perovskite technology
Perovskites offer a fundamentally different pathway. Perovskites are a family of crystalline compounds. It can absorb light across a broader range of the solar spectrum than silicon. When paired with silicon in tandem cells, perovskites boost overall efficiency by capturing energy that would otherwise be lost.
Beyond efficiency, perovskite layers can be manufactured at low temperatures by using potentially cheaper, solution-based processes. Their lightweight and flexible nature opens new opportunities in niche situations such as on curved surfaces, floating solar, portable systems, and even integration with windows or building materials.
Pilot projects, like MicroQuanta’s 8.6 MW perovskite PV farm in China, are demonstrating the commercial viability of the technology[4]. It features over 95,000 perovskite modules specifically designed for humid, low-light conditions. This demonstrates one of the key advantages of perovskite technology over traditional silicon, particularly in regions with less favourable sunlight. However, while perovskites are advancing rapidly, they still face major challenges that need to be addressed before they can be adopted at utility scale.
The hurdles of perovskite
Despite these developments, perovskites are not yet ready for widespread commercial use. The technology faces several key challenges:
- Durability: A recent four-year outdoor study in Germany showed that perovskite cells experienced significant seasonal performance variation, with up to 30% efficiency loss in winter[5]. This raises concerns about how well the technology will perform over the 20 to 30-year lifespan typically expected of utility-scale solar assets.
- Toxicity: Most high-efficiency perovskites contain lead, raising issues for recycling, regulatory approval, and ESG compliance[6]. While research into lead-free alternatives is ongoing, commercially viable substitutes have not yet matched the performance of lead-based cells.
- Scalability: While several companies, particularly in China are beginning to scale up perovskite production, no manufacturer has yet achieved the multi gigawatt-scale output seen with silicon[7]. Transitioning from pilot lines to reliable, high-volume manufacturing still faces challenges in cost, yield, and long-term performance.
- Bankability: Project financiers and insurers require performance guarantees, robust warranties, and a clear supply chain. All these factors are missing from perovskite currently. Until these elements are in place, the technology will struggle to compete with mature and de-risked crystalline silicon.
Solar efficiency vs Australia’s grid bottleneck
Even if durability, scalability and bankability hurdles are resolved, perovskite technology won’t solve the structural limitations facing solar deployment in Australia. Higher-efficiency panels may generate more electricity from the same land area, but they do not address the core issue, in that much of this additional energy still cannot be exported to the grid.
Until transmission is delivered, storage is better integrated, and curtailment risks are priced or mitigated, the benefits of deploying perovskites at scale may be muted. Simply put, adding more efficient panels won’t add value if the energy still has nowhere to go. Until then, Australia’s solar ceiling will be defined by policy and infrastructure reform rather than the science.
The path forward: reform first and technology second
Perovskite solar cells represent a major advance in photovoltaic science. With further development, they could significantly improve Australia’s solar output per hectare, per dollar, and per tonne of embedded carbon. Realising that potential will depend on the policy and infrastructure decisions made today.
Unlocking their potential will require:
- Faster delivery of delayed transmission projects. Unlocking high-efficiency solar technologies depends on resolving the infrastructure bottlenecks that are currently limiting output from existing projects. Without transmission, new generation adds to congestion.
- Scaling of storage, including behind-the-meter and utility-scale batteries. Storage can absorb excess solar output during peak generation and release it when demand or transmission capacity allows, reducing curtailment and increasing the system value of every megawatt generated.
- Clear end-of-life and product stewardship pathways, particularly for lead-based modules. Regulatory certainty around recycling and disposal is essential to ensure ESG compliance and to support widespread adoption, especially where toxic materials are involved.
- Emerging technologies like perovskites often require initial backing, whether through government procurement, underwriting schemes or demonstration grants to overcome early-stage risk and build the track record needed to attract broader market adoption.
The market is not yet large enough to support full commercial rollout, but they offer a proving ground for the technology while system-wide constraints are addressed. Meanwhile, domestic R&D efforts are helping to lay the groundwork for future adoption. A $10.7 million ARENA-backed program led by the University of Sydney and SunDrive is focused on developing high-efficiency tandem perovskite-silicon cells using scalable, low-temperature manufacturing[8].
Conclusion
Perovskites represent one of the most exciting frontiers in solar innovation. It has the potential to boost energy yield, reduce manufacturing emissions, and unlock new applications. But their success in Australia will hinge on factors beyond material science. Without the grid capacity, market design, and investment frameworks to support their deployment, higher-efficiency panels may simply face the same roadblocks as existing technologies. If we build a system that can absorb the energy we generate, perovskites and other clean tech innovations will have a clearer path to support the energy transition.
[1] Australian Energy Market Operator, 2025 Enhanced Locational Information (ELI) Report (Report, July 2025).
[2] Advancements in photovoltaic technology: A comprehensive review of recent advances and future prospects, (Web Page, 2025) https://www.sciencedirect.com/science/article/pii/S2590174525000844
[3] Solar Calculator, ‘Solar panel efficiency’ (Web Page, 2025) <https://solarcalculator.com.au/solar-panel-efficiency/>.
[4] Vincent Shaw, ‘Chinese developer switches on world’s largest perovskite-based PV plant’ (Web Page, 9 December 2024) https://www.pv-magazine.com/2024/12/09/chinese-developer-switches-on-worlds-largest-perovskite-based-pv-plant/.
[5] Emiliano Bellini, ‘Four-year outdoor testing shows perovskite cells suffer from high seasonality’ (Web Page, 11 July 2025) https://www.pv-magazine-australia.com/2025/07/11/four-year-outdoor-testing-shows-perovskite-cells-suffer-from-high-seasonality/.
[6] Christa E. Torrence et al., Environmental and health risks of perovskite solar modules: Case for better test standards and risk mitigation solutions (Report, 20 January 2023).
[7] Vincent Shaw, ‘Chinese PV Industry Brief: UtmoLight starts perovskite module production’ (Web Page, 7 February 2025) https://www.pv-magazine.com/2025/02/07/chinese-pv-industry-brief-utmolight-begins-perosvkite-solar-module-production-at-gw-scale-facility/.
[8] Australian Renewable Energy Agency, ‘Commercialising Si Perovskite Tandem in Australia’ (Web Page, 16 March 2023) https://arena.gov.au/projects/commercialising-si-perovskite-tandem-in-australia/.
