VEPC pushes for new policy to support C&I rooftop solar sector

The Victoria Energy Policy Centre has issued a call for new policy to drive the deployment of large-scale rooftop solar backed by batteries on Australia’s commercial and industrial properties not just for self-consumption but also so power can be exported to the grid at times of peak demand.

August 20, 2024 David Carroll

Image: Sunlock

In a new discussion paper, the Victoria Energy Policy Centre (VEPC) argues for policy support to encourage the uptake of battery-backed rooftop solar that would transform Australia’s commercial and industrial (C&I) premises into major sources of electricity generation and storage for supply to the grid.

The Business Power policy outlined in the discussion paper explores the merit of encouraging the development of large-scale rooftop PV that is capable of behind-the-meter trading in the electricity wholesale market.

The VEPC said its calculations show Australia has enough unused C&I rooftop space to supply at least 25% of the nation’s annual electricity use.

The push comes after a recent report published by Victoria-based research firm Nexa Advisory highlighted the potential of the sector in Australia, suggesting another 28 GW of rooftop PV could be installed across C&I rooftops in the National Electricity Market.

“If our commercial and industrial areas took up solar and storage, it would be revolutionary,” VEPC Director Bruce Mountain said. “Electricity could be produced in cities and used in cities, reducing transmission losses. Commercial businesses could generate solar power during the day, store it in batteries on site and sell it back to the grid during the evening peak.”

While the Business Power blueprint offers a potentially large new source of cheap, reliable, clean electricity with little downside risk, the VEPC said such a scheme would need policy support to get it started.

The continued rise of rooftop solar across has been a remarkable success story in Australia, with the country a clear global leader in the adoption of the technology, but the commercial and industrial (C&I) sector has yet to see the growth. The EPC said in the four years to 2023, residential rooftop solar capacity grew by about 2.5 GW annually, compared to C&I which only added about 500 MW a year.

“To make it attractive to businesses, we propose the incentive of new floor prices for electricity sold to the grid by businesses,” Mountain said, noting that it’s much less profitable to sell to the grid than it is to avoid buying from the grid.

“It would cover electricity injected into the grid outside solar peak periods, before 11am or after 2pm, and from behind-the-meter batteries discharging to the grid during the evening peak, from 6pm to 9pm.”

The VEPC analysis concludes that a solar feed-in floor price of $100 (USD 67.2) per MWh and battery discharge floor price of $200 per MWh is likely to deliver financially viable battery-backed solar.

Mountain the Business Power proposal is motivated by the urgent need to expand emission-free electricity to replace coal generation that is scheduled to close over the coming decade, and in a way that presents little or no social and local environmental costs that are evident in some large -scale solar and wind proposals and with their attendant transmission expansion requirement.

“Solar and wind farms in rural areas have to send power to cities, necessitating expensive new transmission lines,” he said. “Locally produced battery-backed solar can also make better use of our distribution networks – the urban poles and wires.”

“In short, there seems to be little to be lost and a potentially large benefit to society.”

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