A new policy proposal has been unveiled that aims to transform Australia’s commercial and industrial rooftops into a vast network of mini solar farms.
A new policy proposal has been unveiled that aims to transform Australia’s commercial and industrial rooftops into a vast network of mini solar farms. These solar systems, paired with battery storage, would capture electricity during the day and send it to the grid during times of peak demand, offering a significant boost to Australia’s clean energy transition.
The concept, titled the "Business Power", is detailed in a discussion paper published by the Victoria Energy Policy Centre (VEPC). The paper advocates for a nationwide network of large-scale rooftop solar systems capable of behind-the-meter trading in the electricity wholesale market.
According to the VEPC, this move could supply one-quarter of Australia’s electricity needs and help phase out coal generation—all without the need for major new transmission infrastructure.
Professor Bruce Mountain, Director of the Victoria Energy Policy Centre and lead author of the policy blueprint, highlights the enormous untapped potential of commercial rooftops. He believes that properly calibrating the framework—and keeping it out of the control of existing energy regulators—could unleash vast amounts of solar power into the grid.
Mountain, who has previously voiced opposition to some major transmission projects proposed to accommodate Australia’s renewable energy shift, says the Business Power proposal is driven by an urgent need to replace coal-fired generation while avoiding high social and environmental costs.
He explains that using existing commercial and industrial rooftops sidesteps many of the hurdles that accompany large-scale land use changes, such as securing social licenses, building new transmission lines, and undergoing lengthy state and federal approval processes.
Crucially, this approach would also utilise up to 10 gigawatts (GW) of underused distribution networks, a figure identified in a study by software company Neara earlier this year.
The Business Power report suggests that, if developed correctly, this network of commercial and industrial solar rooftops could supply at least 25% of Australia’s annual electricity consumption—including much of it at times when the sun is not shining.
As Professor Mountain notes, “Rooftop solar is our second-biggest clean energy resource and will probably soon be our biggest. I think [the premises of Australia’s commercial and industrial properties] has scope to be twice as big as that.”
He further explains that the policy is designed to turn business rooftops into mini power stations, where businesses can self-supply and export energy to the grid, especially during periods outside the solar peak.
The blueprint proposes a straightforward pricing structure to incentivise battery-backed solar energy:
This structure would encourage businesses to export solar power to the grid during non-peak solar periods, store excess energy in batteries during the middle of the day, and discharge that energy during evening peaks.
Mountain acknowledges that, like any new framework, there are uncertainties. The pricing structure may need adjustments, and there could be challenges in getting businesses and network providers on board. Additionally, opposition from energy network operators, concerned about potential competition, could arise. However, Mountain believes these concerns could be addressed through government intervention.
He draws a comparison to South Australia, which quickly transitioned to renewables due to the retirement of coal generators and a heavy reliance on gas. As a result, the state has benefitted from a significant share of Renewable Energy Target (RET) payments.
Mountain argues that some network operators will recognise the strategic advantages of this new approach. Instead of passively transmitting power from a handful of large generators, distributors could become key players, transporting power to and from a wide range of customers.
According to the report, this model of battery-backed rooftop solar is likely to be cost-effective compared to alternative energy solutions. It also has the potential to lower wholesale and retail electricity prices while covering policy costs.
In comparison to the federal Small-scale Renewable Energy Scheme, which has supported solar installations of up to 100kW and is now being phased out, the Business Power approach could more effectively incentivise solar uptake in the commercial and industrial sectors.
Over the last four years, residential solar installations have grown by approximately 2.5 GW annually, while the commercial and industrial sector has only added 500 MW per year. Business Power could accelerate adoption in the commercial space and create additional incentives for behind-the-meter storage.
Despite potential challenges, the VEPC report expresses optimism about the future of the Business Power proposal. As the report puts it:
“Few energy policies offer this combination of potentially huge upside and easily managed downside risk. Policy makers, market participants, and interest groups are encouraged to lose no time in their detailed consideration of this.”
The Business Power proposal represents a potentially transformative step forward in Australia’s transition to renewable energy. By leveraging the untapped potential of commercial rooftops, this initiative could provide significant economic, environmental, and social benefits—without the need for major new infrastructure projects.