Australia is an ideal location to develop solar PV systems due to the abundance of sunshine hours. Since 2008, various states in Australia have been providing high feed-in-tariff (FIT) rates as subsidies, and a rebate program provided by the central government has been promoting the development of the country's small-size solar PV installation market. Currently, 96% of solar PV installations in Australia are less than 10kW.

In 2011, total solar PV system installations grew significantly to 837MW, an annual growth rate of 119% making Australia one of the most promising emerging solar markets. In July 2012, the country's carbon tax policy went into effect and has set the target to lower carbon emissions by 159 million tons in 2020. The government also plans to use carbon tax collected to invest into developments of renewable energy sources. This means Australia's solar market is expected to expand. The carbon tax system is likely to stimulate installations of high power-generation solar PV systems to grow significantly in Australia.

In 2011, 90% of energy generated was from fossil fuel while energy generated from renewable energy sources accounted for 9.4%. The government has set targets that by 2020, the figure will increase to 20%. Currently, the country's main renewable energy is hydroelectricity, accounting for 67% of all renewable energy sources used while windpower accounts for 22%. Solar power accounts for 2.3%.