“Solar Spill” in Australia as Rooftop Solar Energy keeps surging with the Entry of New Players

Solar Spill in Australia 

Australia has the highest penetration of solar rooftop energy in the world with almost 20% of Australian households sporting solar systems. But now the success of solar energy is starting to bite, as too much solar energy being generated in the day is causing issues in demand absorption. As solar energy is intermittent generating power between around 8 am to 5 pm, it creates issues in the smoothening of supply as there is too much supply during daytime and too little in the evening and night. There is not enough demand in the daytime when solar peaks. This means you need to either lower the supply from other sources (coal, gas etc.) or shut down the power from rooftop solar energy systems. This has economic implications for either of the generators.

The strong competitiveness of solar energy in Australia is leading to huge capacity additions almost every month. April was the seventh month of 100 MW plus of rooftop solar energy capacity addition. While players like Tesla have made a major mark in the Australian market with their virtual power plants (rooftop solar plus storage), others are still entering the market. Lightsource BP which is a major UK based utility solar developer is bringing rooftop solar PPAs to the Australian energy market. The company plans to offer no-cost down 20 solar PPAs to Australian homeowners through rooftop solar systems.

A solar spill is already causing issues for the Australian power systems and given the 30% decline in solar panels expected in 2018, due to huge Chinese overcapacity, this problem is only going to get acuter in the coming years. The Australian system operators need to urgently make a plan to absorb the power into the system, like other high solar penetration countries such as Germany. They need to strengthen their systems of forecasting, grid balancing, increasing storage capacity and network planning. There are tools and systems that have been developed in other countries to manage high RE generation already. While Australia suffers from the fact that it cannot trade power with other countries (given it is just a big island), the country needs to invest in large-scale storage capacities which can store the “solar spill” during the day to provide power at night. Tesla has already made a great start with its utility-scale and behind the meter storage offerings.