Rooftop solar on homes and businesses across New South Wales likely reduced the market price of wholesale electricity by nearly $1 billion during a February heatwave, a new analysis has found.
The analysis by Marija Petkovic, of consulting firm Energy Synapse, says that without rooftop solar the total cost of market prices would have been $888 million higher, because peak demand during the heatwave, when temperatures soared to 45°C, would have been higher and longer.
Rooftop solar PV supplied only about 2 per cent of the state’s total power needs over that time – or about 17GWh – but its impact on the market was to cut the price of electricity by 60 per cent, delivering savings of $888 million.
Rooftop solar also likely delivered considerable savings in markets in Queensland and South Australia over the same period, although Petkovic says she has not crunched the numbers on those states, and there are many other factors to consider.
The Petkovic analysis also highlights another issue with rooftop solar and the way it is compensated.
Despite saving $888 million, the actual “market value” of the rooftop solar put into the grid was only around $9.6 million, or $550/MWh. Householders would have been lucky to receive 8c/kWh, or $80/MWh, for their output. Many would have received less.
“Over the three-day period, small solar reduced the cost to the market by roughly $888 million,” Petkovic writes.
“Even though small solar only covered 2 per cent of electricity demand, it cut the price of electricity by 60 per cent from an estimated volume weighted average price of $1920/MWh to $780/MWh,” she said.