Realising the Potential of Customer-Sited Solar

Customer-sited Solar is a Significant Opportunity in Australia

According to an analysis done by BloombergNEF and Schneider Electric, Customer-sited Solar is an opportunity which will show countless benefits in the coming decades and bring change to energy markets and power network operations. Customer-sited Solar, including Onsite Solar and Behind-the-Meter Solar, has been the topic of significant debate about how best to structure its incentives and regulations, especially and more recently surrounding solar combined with batteries/energy storage.

A huge potential exists for more distributed generation on vast buildings and facility rooftops. Studies vary in assumptions and scope, but all confirm the potential is considerable. More than 50% of rooftops in the U.S. or Germany could host solar, and this ratio goes up to to 80% in Australia.

Accelerating the Transition to a Renewable Energy Economy

With the majority of greenhouse gas emissions now covered by some form of government net-zero target, there is unprecedented urgency to accelerate the transition to a renewable energy economy. Central to these efforts is the power system, which is simultaneously the sector most responsible for carbon emissions, and the one most likely to decarbonize first. But as we now know, the decarbonized power system of the future will look fundamentally different from the power systems of the past.

Due to the rapidly decreasing costs of solar technology, consumers in various parts of the world can now economically generate some of their own power. This has mobilized new sources of capital to invest in the customer side of the energy transition, while delivering economic benefits to customers and grid operators.

As energy storage costs fall, a second transition is beginning, where Customer-sited Solar combined with energy storage can begin to provide greater benefits to the power system, in terms of energy balancing, grid services and increased resilience. And, as net-zero emissions targets drive greater electricity demand in transport and buildings, customer-sited energy resources could play an even more important role in optimizing local energy supply and demand.

What does this mean for Customer-sited Solar?

The potential for Customer-sited Solar is likely to materialise soon and fast. Organisations are looking to reach net-zero emissions and improve their sustainability ratings, and they are also trying to increase their operations resilience. These customer objectives will lead to a quicker uptake in Customer-sited Solar. In addition to this, continuous improvement of technology and value chains, will further improve the economics.

While this convergence has already happened and is already driving growth in specific regions, especially Australia, the analysis by Schneider Electric and BloombergNEF predicts it will be a common pattern globally within the next decade.

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