Australia is currently leading the world in rooftop solar specifically in households and in response, the Australian government has announced that it wants to accelerate the deployment of battery storage in residential areas.
The growth in rooftop solar is phenomenal considering that the country has historically had a relatively emissions-intensive electricity generation industry because of the abundance of its coal and gas resources.
Australia leads the world in household scale distributed solar PV
By country, Australia ranks 6th in the world for total solar – photovoltaic (PV) and solar thermal – installed capacity per capita, behind Germany, Italy, Belgium, Greece and Argentina. Australia currently has around 4,500MW of installed solar capacity.
What is significant about Australia’s solar capacity is that it is almost entirely located on Australian rooftops. By 2015, more than one in seven Australian households had installed solar PV. This is a 15% penetration rate across all Australian households. In South Australia and Queensland the household penetration rate is 25% and 24% respectively. Some suburbs in greater Brisbane and Adelaide have recorded household solar PV penetration rates above 50%.
Data from the Clean Energy Regulator, the US Energy Information Administration and other sources, shows that Australia leads the world in household scale distributed solar PV installations. Australia has double the residential solar PV penetration rates of Belgium and more than three times the penetration of Germany and the UK.
The three leading jurisdictions in the world for rooftop solar PV are South Australia, Queensland and Western Australia ahead of Hawaii.
The US-based Solar Energy Industries Association recently highlighted that America could have 3.3 million households with solar installed by 2020. In contrast, Australia already has 1.4 million small-scale installations with less than one-tenth the population of the US.
Australia’s energy storage push
Based on this growth, it’s no surprise that the home battery storage market in Australia is expected to literally explode.
The residential market for battery storage is predicted to jump 1.9MW in 2015 to 44MW in 2016, as the overall market jumps from 6.6MW to 75MW. By 2020, Australia is expected to have installed more than 800MW of battery storage, valued at over $2.5 billion. The Australian Energy Market Operator prepared a scenario that suggested 40% of homes would have battery storage within the next two decades. By 2035, figures are expected to stand at 11,200MW.
The Australian government has announced that it wants to accelerate the deployment of battery storage in Australian households, ensuring that this natural source of power does not go to waste when the sun goes down. This will obviously go a long way to reducing huge peaks in demand and reduce costs for consumers, thereby reducing the country’s environmental footprint.
Environment minister Greg Hunt says he wants the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) to bring forward the widespread deployment of battery storage.
One of the triggers will be the arrival of the first Tesla Powerwall products in Australia in the next two months, although other international manufacturers such as Panasonic, LG and Kokam already have products in the market. Enphase will also be launching its “plug and play” battery storage product into Australia. Like Tesla, Enphase is targeting Australia because of the unique nature of its markets – high electricity prices driven by escalating grid costs, particularly to meet “peak” demand, the high penetration of rooftop solar and lots of sun.
Added to this, tariffs are also being changed in New South Wales, Victoria and South Australia, which will mean that some 230,000 households used to receiving premium tariffs will get little or no payments for excess energy exports to the grid. Those who produce more electricity than they need will then have an incentive to store it for use when the sun sets.
Both Tesla and Enphase believe that parts of the market are already at grid parity.
Supporting energy storage development
It’s staggering to think that households could well be leading the energy revolution in Australia. The combination of battery and storage will reduce costs for individual consumers, and for the system as a whole.
While utilities may view this as a threat to their revenue, there are a number of revenue streams that can be tapped into. Electricity retailers should look to New Zealand’s energy network and service supplier, Vector, which has put together a Solar system and web monitoring system called HomeSense, which helps consumers understand their consumption patterns so that they can manage these more effectively.
In addition to this, grids and networks will benefit from energy storage as it can smooth out energy supply, reduce peak loads, mitigate the need for network upgrades and allow utilities to better manage power supply and demand.
ARENA Board and CEO Ivor Frischknecht says that he expects a fall in battery costs of between 40% and 60% by 2020. He adds that one million homes are calling for battery storage.
ARENA is a strong supporter of energy storage development. It has funded battery storage developers such as Ecoult, and SinoEv, as well as storage integrator Sunverge. It has also funded research by AECOM and has backed the development of a national energy storage “knowledge bank” at the University of Adelaide.
ARENA is also supporting trials being run by Ergon Energy and Sunverge that will see how battery storage can help households trade their output of solar, and even combine to act as a “virtual power station” to respond to grid demands. Ergon has already installed battery storage at grid level, saying it is cutting costs by around 30%.
Another trial based on a similar concept of using solar and storage to trade power is being run by Reposit Power in Canberra, also funded by ARENA. The agency is also funding trials in Canberra by IT Power that compare the performance of lithium-ion and lead battery.
The agency is also funding large scale battery storage installations at Coober Pedy, Rio Tinto’s Weipa mine, Sandfire Resource’s Degrussa copper mine in Western Australia, and a large scale storage project in South Australia, which already sources 40% of its electricity demand from variable wind and solar.
The Clean Energy Finance Corporation (CEFC) says it is also supporting battery storage through its provision of low cost finance via banking groups Commonwealth Bank (CBA) and National Australia Bank (NAB), as well as Australian Energy Company, Origin Energy. It is also financing the Degrussa solar plus storage installation.
Since Australia has a relatively high consumption of electricity per capita, with around one-third of all electricity in Australia used for large, energy-intense industrial processes, it would be great to see industries turning to solar and energy storage solutions for their power too. A space to watch as investors pour in.