Rooftop Solar threat to Australian Utilities

The electricity market globally is undergoing a major paradigm change which is perhaps the biggest since Thomas Edison invented the electric bulb. The advent of cheap renewable energy, distributed generation, EVs and storage are leading to huge changes which most of the large electricity utilities are finding difficult to adjust to. Those utilities which have adapted rapidly are seeing growth, while others are facing the fate of dinosaurs. In Germany where energy transformation has seen the most progress, their utilities have become shadows of their former selves.

Australian electricity retailers are also facing a huge threat from rooftop solar which continues to grow endemically in residences, commercial and industrial sectors. Given the low prices of rooftop solar in Australia (one of the cheapest in the world) and high electricity grid prices, people are starting to install rooftop solar systems in droves. Electricity distributors are now trying to limit the growth saying that excess injection of rooftop solar into the power grid could lead to grid instability and want to limit sizes of rooftop solar systems.

Solar Vs Fossil Fuel generation

Retailers face a huge economic threat from rooftop solar as not only the demand for their only product, “power” reduces (as people generate their own electricity), but they also have to absorb excess power through net metering. Energy Networks Australia is now threatening that they will have to make expensive upgrades to the distribution system if more rooftop solar is installed so it would be better to limit the rooftop solar capacity.

There are easy ways to absorb rooftop solar as has been shown by many countries already. There are technical means to easily limit the rooftop solar electricity and ensure the safety of the grid but electricity retailers are reluctant to do so. As it is, rooftop solar is increasing by more than 100 MW a month and if this trend continues, retailers will soon face going concerns.