Labor to connect 4,000 schools into VPPs in $1 billion solar program

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Federal Labor has promised to make available up to $1 billion in finance from the Clean Energy Finance Corporation (CEFC) for the rollout of solar PV and batteries – benefitting up to 4,000 schools across Australia. The distributed energy systems are planned to be linked into virtual power plants (VPPs) to deliver energy back to the grid – driving down electricity bills for households and businesses.

The Solar Schools program, announced on Tuesday, would provide concessional loans for the purchase of both solar panels and battery systems, either by schools or VPP project developers. The full rollout would support up to 364 MW of VPP capacity, and cut over 390,000 tonnes of emissions a year.

“Schools are an excellent location for solar investment and the creation of virtual power plants, because they often don’t use energy at times of peak demand and through a large portion of summer,” Labor leader Bill Shorten said in a statement.“Schools are largely vacant for more than 150 days per year. Often demand for energy is highest when kids are not at school. This makes schools perfect locations for solar and battery powered VPPs, to support grid reliability and lower power prices for Australian families and business.”

Major savings and benefits for the grid

Clean Energy Council (CEC) analysis suggests that the program would translate into major savings for Australian schools. A typical smaller schools could save between $7000 – $15,000 per year through the program, depending on their location, electricity use and the terms of their contract with their power company. A larger school could save between $89,000 – $120,000  per year, CEC calculates. These estimates do not include potential additional revenue from the sale of power and other services to the grid.

The program would not only benefit individual schools, but also improve the reliability of the energy grid. “There will be particularly big benefits in December and January when system reliability is under pressure due to demand spikes and unscheduled unit outages at ageing plants,” Shorten said.

It would first be rolled out in trial form, with two to three VPPs across different regions. Different VPP models would be welcomed under the program with the goal to foster innovation and competition in VPP design and delivery. This means that VPP developers would have the flexibility to choose their equipment suppliers, aggregation services providers, retail partnership and customer offerings.

The program would be also open for schools with existing solar panels and batteries, which would be able to upgrade to a newer or larger system that would be better for self-consumption and participation in a VPP.

Strict requirements about product, installer and maintenance standards would be in place. All installations would be undertaken by certified installers, in compliance with the National Construction Code and the CEC installation guide. All batteries installed would have to meet both the Australian Standard and the CEC’s best practice guide, which requires certification against a range of international product standards.

Solar school initiatives

The program is part of Labor’s nationwide Energy Plan to deliver 50% renewable energy by 2050. The announcement follows the party’s pledge to encourage the uptake of household solar and battery systems by setting a target of one million household battery systems by 2025 and providing a $2,000 rebate for 100,000 households on incomes of less than $180,000 per year to purchase and install battery systems, as well as low-cost loans for households. On top of that, Labor has promised to double the original investment in CEFC by $10 billion to support new generation and storage, concessional loans for household purchases of solar and battery systems, commercial community renewables projects and the transformation and growth of new and existing industries.  

“The $1 billion loan program announced by the ALP today would lead to a big increase in energy storage across the country, helping to improve the reliability of the energy system,” Chief Executive Kane Thornton said welcoming the announcement of the Solar Schools program. “These systems are also a fantastic educational resource to give students a first-hand glimpse at Australia’s move to renewable energy.”

Similar initiatives have been seen on the state level. In the recent New South Wales (NSW) election, Labor came up with a $100 million solar school program to help power around 350 schools in the state, if elected. This followed the NSW government’s plans to spend $20 million to install up to 900 batteries on hospital and schools that already have rooftop solar systems and create a 13 MW VPP.

Meanwhile, in the Northern Territory, the Labor Government launched its $5 million Rooftop Solar in Schools program, which aims to roll out solar PV on up to 25 schools across the state over the next three years. In Queensland, the Palaszczuk government unveiled $40 million solar program and $57 million energy efficiency measures across around 800 state schools through a program called Advancing Clean Energy Schools, or ACES.