Rooftop Solar: A Missed Opportunity for Australia’s Businesses
Australia has made impressive strides in rooftop solar energy, especially in residential areas, but many commercial and industrial buildings have not benefited as much. A recent study reveals that while residential solar power installations have reached 22 gigawatts (GW) by the end of last year, businesses have only managed to install about 5.6 GW. This is particularly surprising since commercial and industrial buildings consume more electricity than homes.
The report, prepared by the Institute for Energy Economics and Financial Analysis (IEEFA), highlights several challenges that businesses face in adopting solar energy. One significant barrier is that many businesses rent their spaces, complicating decisions about investments in long-term energy solutions. Additionally, the inconsistent structure of network tariffs and slow grid connection processes make it harder for businesses to go solar.
The authors of the report emphasize that filling rooftops with solar panels at commercial sites could be vital for increasing power generation as coal plants begin to shut down. They argue that commercial solar projects can be realized more swiftly than utility-scale installations, which often require lengthy planning and environmental assessments.
Johanna Bowyer, a lead analyst at IEEFA, pointed out that the solar capacity on residential roofs is comparable to that of coal plants in Australia. Yet, the commercial sector hasn’t seen the same level of activity despite its higher energy consumption. Future projections suggest the commercial and industrial solar sector could grow to between 17 and 31 GW by 2050, although growth in battery storage solutions is lagging behind.
Bowyer also mentioned that if agricultural rooftops are considered, the technical potential for solar energy could exceed 80 GW. This is particularly significant as commercial energy usage peaks during the day, which aligns perfectly with solar energy production.
She noted that while tenants may seek solar upgrades to reduce energy costs, they face challenges since landlords ultimately make the decisions. Many business owners worry about the length of their leases and whether they would see a return on their solar investments before moving out.
The report characterizes commercial rooftops as a “missing middle.” These systems are often too large to qualify for residential incentives but not large enough for utility-scale programs. To remedy this, the report suggests that governments should consider new incentive schemes tailored for businesses. For instance, they could increase the instant asset write-off for larger solar systems and batteries.
The report also recommends reviewing and standardizing network tariffs and improving the economic regulations governing distribution services. In Victoria, the opposition has proposed developing “urban solar parks” to promote solar and battery installations on commercial rooftops. This plan aims to minimize the need for additional transmission lines by utilizing local rooftop space for energy generation.
Despite these plans, experts caution that while increasing rooftop solar is beneficial, it shouldn’t replace the need for building new transmission infrastructure. According to Bowyer, Victoria already offers good incentives for solar energy in commercial settings, suggesting that the foundation for solar growth is already in place.
