Shared Solar could be the future of distributed PV installations | RenewEconomy

Shared Solar could be the future of distributed PV installations

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Many consumers look to solar only for self-consumption or a means to go off-grid. But new report says “shared solar” will bring solar PV to 100% of homes and businesses, including renters, high rise apartments and offices. It just needs a change of rules.

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It is one of the most common complaints about solar. What if a person cannot afford to install their own solar array. What if their home or building is not suitable for solar panels. How do you get solar to all the tenants of an office block or residents high rise residential building.

It is a question that is often asked in Australia, which has the highest rate of penetration in the domestic market in the world.

In states such as Queensland and South Australia, one quarter of all customers have rooftop solar on their homes, and many are looking at solar for “self consumption” or even as a means to quit the grid. Many others, though, are missing out. Renters can’t get access, inner city and apartment dwellers have nowhere to put them.

The answer, according to the US-based National Renewable Energy Laboratory, is “shared solar”. In a major new report released this week, NREL says that one half of all distributed solar installations in the US could be in the form of “shared solar”. And shared solar could be the key to expanding the potential customer base of solar to 100 per cent  of homes and businesses.

These conclusions pretty much apply to any market, Australia’s particularly. And as this graph below shows, there is a bunch of different ways of doing it – combined purchasing power from a community group, shared solar from an offsite installation, onsite shared solar for multi unit buildings, and community driven financial models.

NREL solar

The concept of community ownership is not new. It has driven the huge investment in renewable energy in Denmark and Germany, in particular. In Australia, there are scattered examples such as the Hepburn Wind Farm, the Albany wind farm, and community owned solar projects such as this one in the Shoalhaven and the planned installation on the new Sydney exhibition centre.

But there is growing interest. Councils are becoming increasingly focused. In Byron Bay, they are testing the idea of “virtual net metering”, where the output of solar electricity from one building is credited to the consumption of another. In other words, the output is shared. A community-owned energy retailer is also being put together.

Other councils, such as Lismore and a group of six in western NSW, are looking at different financing models to build solar installations where the output can be sold to the community. Councils such as Sunshine Coast and Fremantle are looking at large scale projects – in the region of 10MW to 15MW – to do the same.

A number of councils and towns in NSW and Victoria are looking at 100 per cent renewables, which will inevitably include “shared solar”. The Melbourne City Council has tendered for solar suppliers for interested business buyers in the CBD.

It’s a critical issue in Australia, because the move to “self consumption” risks causing major impacts on embedded infrastructure such as networks. There is no doubt that the networks have been over-priced – because of the massive investment in the last 5-10 years – but the grid remains the cheapest “back-up”.

That, in turn, however, means that the grid has to learn how to “share” energy generated on individual properties. Right now, tariff designs and policies make that difficult, pushing more and more consumers and businesses to consider quitting the grid altogether. Up to one third of customers may choose to do that, the CSIRO has said, unless networks, retailers, policy makers and pricing regulators learn how to adapt to the new energy paradigm.

The NREL report underlines the point that shared solar models allow consumers to jointly own or lease systems to offset electricity bills, and allow consumers to share the benefits of a single solar array.

NREL estimates that at least 49 per cent of US households and 48 per cent of businesses are currently unable to host a PV system when excluding residential renters, those without access to roof space and/or those living or working in buildings with insufficient roof space.

If the policy factors can be addressed, shared solar could lead to another 11GW of distributed solar over the next 5 years, an investment of more than $16 billion.

“Options such as shared solar can enable rapid, widespread deployment by increasing access to renewables on readily available land and rooftop sites, lowering costs via economies of scale, and fostering innovation,” the report says.

“Fundamentally, these models remove the need for spatial one-to-one mapping between distributed solar arrays and the energy consumers who receive their electricity benefits. The output of offsite solar arrays can be shared among residential and commercial energy consumers lacking sufficient unshaded roof space to site an array.

“Solar developers can construct arrays in optimal locations on marginal lands or unused rooftops and offer community members the opportunity to participate directly and benefit.

“Shared solar arrays sited on apartment buildings and shopping malls can provide stable electricity bills to landlords and tenants. Retailers and municipal buildings that host shared solar systems can provide electricity and other benefits to the community and generate goodwill.

“Utility-sponsored shared solar programs can reach large numbers of energy consumers.”

There are other benefits too. In the event a shared solar customer moves, his or her solar share can be transferred separately from his or her residence to a new home within the same utility service territory or sold to another entity.

“Shared solar arrays allow for increased siting flexibility: strategic placement on sites such as commercial rooftops, brownfields, and municipal land can aid local economic development,” the report says.

“With utility input, strategic deployment can also aid grid integration. For utilities, shared solar arrays can function as a more streamlined and visible electricity-generating source than many smaller systems.”

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  1. Rob G 5 years ago

    Giles, I’d love to see you on ‘Q and A’ next Monday to give Greg Hunt a grilling on renewables. Maybe a question along the lines of “Greg, can you tell Australian voters when the coalition plans on taking climate change seriously? Thus far you have looked to destroy climate action on all fronts (e.g. RET, CSIRO sackings, killing the carbon tax…) and promoting coal on all fronts (Abbott’s “coal is good for humanity” at the G20, Lomborg, Gallie Basin green light, Direct action – paying the polluters, continued fossil fuel subsides….).”

    In fact you should be on the panel!

    • phred01 5 years ago

      Problem is dirty coal contributes to lib coffers

      • Rob G 5 years ago

        I’d like to hear Greg admit that. But alas, he will lie his way around… and hence my suggestion that Giles take him head on and refute the endless lies for all to see.

        • Evan A 5 years ago

          +1 on that grilling. I think it was Richard Deniss talking on the coal industry that said real power was being able to say ridiculous, unsubstantiated things and not be held to account. Peter Singer will be on the show too. Should be a good one.

      • Jacob 5 years ago

        Abbott did not need to spruik coal to Narendra Modi. But he did because Abbott genuinely loves coal.

        There are photos of Abbott inside coal mines. He loves it.

  2. Chris Fraser 5 years ago

    Great idea energy sharing. This will suit those PV owners who would like to provide Real competition for take it or leave it retailers. And all the very best to their success.But me, I’d like to store Everything from the PV in a large battery, use it for home and transport, and for a reasonable price I’ll snap up your export too.

  3. david_fta 5 years ago

    Another model might be that companies that own coal-fired generators use profits from power sales to install solar PV on your house? That way, they still get to sell power to you after their coal-fired generator is shut down.

    • nakedChimp 5 years ago

      The gentailers are doing this afaik already. Don’t know if the coal generators have enough money to go into this biz? It’s also a complete different set of business.. don’t think they’ll make it.
      Chances are that the investors of those coal plants are reshuffling their investments as good as possible and write off the remainder.. but no idea at which stage of ‘Journey to Jerusalem’ they are with this 😉

      • Jim Young 5 years ago

        I’m reminded of our old Railroad Express Company, tied to one mode, instead of considering advances in similar or better services as the potential grew.

  4. Jouni Valkonen 5 years ago

    similarly, ground sourced heating could be used as shared installation. The COP of ground sourced heat-pumps depends on the depth of hole, but drilling hole is rather expensive capital investment. Therefore Drilling deeper holes could make sense for providing heating (and cooling) for entire block of residents.

    Of course ground sourced heating is not very relevant in Australia, but here in Finland it is very relevant.

    • nakedChimp 5 years ago

      how deep do they go in Finnland for this?

      • Jouni Valkonen 5 years ago

        It depends on what is the rated power of heat pump. For 10 kW heat pump 200 meter deep bore hole is ideal. In that depth rocks are in about 10 degrees of celsius that gives very good COP for heat pump.

        And on summer, this can be used for cooling. I wonder if there is in Australia ground sourced cooling used?

        • lin 5 years ago

          Re cooling in Aust. I have not heard of ground sourced cooling, apart from the natural cooling in underground houses in some of the more inhospitable outback areas. When the temp gets over 45, we just sweat a lot (or go to the beach, river, lake, or pub). Sounds like a good idea though, with temperatures increasing.

    • JonathanMaddox 5 years ago

      Air-source heat pumps are more than adequate for heating in most of Australia and are already widely installed because, of course, they double as coolers in summer.

    • Jim Young 5 years ago

      Friends report a 75% reduction in energy costs from geothermal installations, with one friend’s son having done his own installation and another planning on having a home built using geothermal.

      Other installations, though, have varied horrendously, depending on the management and contracted maintenance costs, with one college that tried one new building using geothermal, swearing they would never again attempt it.

      Reminds me of the (excellent product with an extreme premium price, though) Kirby Vacuum cleaner salesmen that sold units to social security dependent customers for $2,300 (about $400 more than my 1972 Datsun cost new). My mother (once a maid for Clara Endicott Sears at her summer home site of the present day “Fruitlands Museum”, where Bronson Alcott and his daughter Louisa May Alcott once lived) bought one when they sold for $400, considering it well worth that price back when she bought it.

  5. Alen T 5 years ago

    Does this ‘shared solar’ include one array at one particular site, or is there an option where you could have two or more arrays in different locations feeding energy to the one destination? If the latter is an option, I see a big commercial scale PV market developing. This scenario would enable a large-market consumer to offset a chunk of their network peak demand charges, which can be around 1/3 of the bill, because of one short (<15min) spike in demand throughout the entire billing period. Spreading the PV out would increase your chances of not having a cloud/shade affect the panel at the time of the spike. This in turn, due to high cost of peak demand network charges on a bill, would allow you to more confidently include these as potential saving and avoided cost, thus making a much stronger business case -yielding lower payback periods.

    • nakedChimp 5 years ago

      network peak demand charge is essentially billing you for the size of your connection to the network and how you use it. To save on ‘going over the limit’ you have to get on-site means to reduce your demand for short timeframes. Battery storage comes to mind instead of PV all over the place..
      You trickle charge them and once your peak demand hits they keep you from going over the ‘limit’.

      • Alen T 5 years ago

        Peak demand for many sites occurs during midday, thus the PV should contribute to lowering that amount. However, the demand needs to only spike once during the billing period to accrue these related network charges. The chances of the system never being affected by shade during these hours is very low, thus a proper payback analysis should not include saving from peak demand (/kW) network charges, i.e. only consumption (/kWh) based network charges are included. Battery system is a good way to lower these prices, but if you are able to use ‘shared solar’ and thus guarantee to some extent that the /kW demand network charge will be reduced, you’re eliminating the cost of an entire battery pack and still getting the benefits of factoring in the network charges.

        Even a small battery system will still add 1000s, including an extra inverter that is separate to the grid-tied one, the ongoing maintenance cost and anything else needed to configure the battery to the equipment to only kick in during high demand periods. The battery itself should have a low payback, but it can be totally avoided if shared solar can applied from a number of locations.

        • nakedChimp 5 years ago

          I don’t think any network operator will follow your logic there.. you’re using ‘over the limit’ on a single site connection point and want to offset that by delivering power into the grid in various other locations, might even have to be tuned down there if the supply in those locations is ‘over supplying’.. in both cases the grid would need upgrades, but you think they should drop the peak charges as overall you didn’t exceed any limits?!
          I thought that peak demand charges are there to get money off those who are straining the local grid and make them bear the cost for the needed upgrades?

          I think you’re missing that the cost for electricity to your wall-socket is just a small part of the bill and will get smaller in coming years. You argue about the energy delivered, but totally miss that the infrastructure and any bling around this is the bigger part and this needs to be paid.
          If you book a 32A line locally and exceed the limits of that by 10A and want it to be offset by feeding 10A into the grid three substations down the road you’re logic is flawed.

  6. Jacob 5 years ago

    You can also get 2 houses to share a fibre optic NBN connection. Houses are so close together now, it makes perfect sense.

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