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Policy report

The distributed energy resources revolution: a roadmap for Australia's enormous rooftop solar and battery potential

Energy consumption Renewable energy Solar energy Energy storage Electricity grid Electricity distribution networks Electricity demand

Most of Australia is about to reach ‘socket parity’ according to the Australian Energy Market Commission (AEMC) and Bloomberg New Energy Finance. This means that in future, more households and businesses will realise that a grid-connected rooftop solar and battery system produces electricity more cheaply than what they can buy from the grid.

Millions of Australians have already reduced their electricity bills and lessened their dependence on the grid using clean, renewable solar power. We have embraced rooftop solar so enthusiastically that we have the highest penetration of residential rooftop solar in the world. In Queensland, about 33 per cent of all dwellings have solar installed on their roof. South Australia (32 per cent) and Western Australia (28 per cent) are not far behind. There are now more than 2.1 million Australian solar homes2 . By 2050, the AEMC expects more than half of all houses will have solar PV systems and about a third of residential buildings will have energy storage.

It will be challenging to integrate that much solar generation onto the grid. Electricity distribution networks were not originally designed for it.

We need to change the way we manage solar and battery systems and how they interact with the grid. We’ll need new rules to mandate technological capability and new markets to make best use of the capabilities already at our disposal.

The next generation of solar and battery systems will be intelligent, with advanced communications capability, cybersecurity and an interface to markets. This will massively increase the solar hosting capacity of networks.

Policy makers need to establish markets for the grid services that will be required by future energy networks. They include markets for grid support, incentives to avoid unnecessary investment and support for dynamically balancing supply from millions of variable energy systems.

Progress will require a naturally sustaining support base to avoid being derailed as inevitable challenges emerge. It will need the characteristics of a democratised ‘movement’. It is our hope that this document will contribute to building a movement to revolutionise the way we transform and use energy.

This is a societal challenge. The changes will take place over decades. Households, businesses and governments will need to work together to make this a success. No single entity can make this change happen.

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