Rooftop solar power is becoming so cheap, and will become so abundant, that we will reach the situation where the kilowatt-hours of use (i.e. the production) are effectively free, the head of the Australian Renewable Energy Agency has said.
To illustrate his point, ARENA CEO Ivor Frischknecht gave the example of a home owner in Townsville, north-eastern Queensland, who had installed a very large rooftop solar system, and planned to use it to power an air conditioning unit on the verandah.
“He likes to have cool air on his face while he is sitting outside outside,” Frischknecht said. “And this is fine, because if you are only running it in middle of day, and using the solar, the energy is free.”
Speaking at the recent Emissions Reduction conference in Melbourne, Frischknecht said the cost of rooftop solar would instead come in managing the variability, and integrating it into the grid.
The technologies to do that are available now, he added, in the form of battery storage, demand response, pumped hydro and a “whole bunch of solutions that can ensure that the lights stay on.”
The challenge comes down to rewriting the market rules and regulations, and reframing business models, so that these technologies are rewarded for their services, and not punished.
“If you have a battery today and charge it up – you have to pay transmission costs and distribution costs and a share of RET, and when you discharge it again and sell the output, you pay all those costs again,” Frischknecht said.
“We are going to have to figure out different ways of pricing and dealing with variable output.”
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