Two-thirds of new-build homes don’t have solar: Report calls to plug holes, double rooftop PV capacity

Despite leading the world in rooftop solar installations, with panels on more than half of all owner-occupied houses, two-thirds of new houses in Australia are being built without a solar system.

This somewhat horrifying statistic, detailed in a new report from the Climate Council, highlights one of a number of major holes in Australia’s rooftop solar market that could – and should – be filled to meet national climate and renewable energy targets.

The Seize the Sun report, published on Thursday, argues Australia could roughly double its small-scale solar capacity and install two million household batteries by the end of the decade, adding another 26.4 gigawatts (GW) of generating capacity on residential and business rooftops by 2030.

“Rolling out more rooftop solar is the biggest opportunity we have right now to keep building on Australia’s clean energy momentum,” says Climate Councillor and leading Australian energy economist Tim Nelson.

“It should be at the top of the agenda for all parties during the next term of parliament, and we can get the ball rolling with clear commitments today.” 

But this will mean putting it at the top of the agenda of the home building industry, too. The report notes that, despite the significant cost and design advantages of installing solar during construction, this just isn’t happening at anywhere near the rate it should be.

And that’s a big oversight, not just because it means people are missing out on solar savings, but because according to Climate Council modelling, making rooftop solar standard for all new and substantially rebuilt homes – both houses and apartments – could see panels added to an additional 537,000 homes by 2030.

This would unlock a further 2.7 gigawatts (GW) of clean electricity generation capacity, the report says, equivalent to more than half of of Victoria’s coal-fired power plants.

“There is a significant opportunity to bring the benefits of solar to more people simply by ensuring panels are added as a standard feature to all new and substantially rebuilt properties,” the report says.

“This core energy infrastructure can be delivered along with space to install a battery and charge an electric vehicle – making it as easy as possible for households to take up one or both of these technologies if it suits their needs.”

The findings come off the back of a poll the Climate Council ran in August which found 73 per cent of Australians support making solar a standard feature of all new and renovated homes, apartments and commercial buildings.

There are already hints that bureaucrats are getting frustrated that the most visible way of dealing with power prices – mandating rooftop solar on new commercial and residential buildings through the National Construction Code – hasn’t happened yet.

Government negotiations with industry led to new standards for home efficiency standards in 2022, but the Building Codes Board wants to go further: it wants solar to be mandatory for new commercial buildings from 2025. 

And in 2022 the Shellharbour City Council on the South Coast of New South Wales (NSW) agreed to investigate making rooftop solar PV on new homes compulsory. 

But making solar standard on new rooftops is tricky, not least because it would need to account for questions around size and efficiency minimums, says Grattan Institute director of energy Tony Wood.

“Renewables are growing anyway, what’s not growing is the capacity to manage them,” he told Renew Economy.

“The momentum we have with rooftop solar is such that I’d be putting more effort into other things because I think we’re going to get [that huge volume of rooftop-generated electricity] anyway.”

Indeed, AE​​MO predicts a four-fold increase in rooftop solar across Australia’s main grid over the next two decades, to a phenomenal 86 gigawatts (GW).

But Nelson says it’s also about allowing more Australians to “turn sunshine into savings” and driving down power bills for all.

“With Climate Council’s bright ideas … we can extend the bill savings to millions more homes and businesses now, backed by household and community batteries and other technology like smart hot water systems that stabilise our grid and cut climate pollution,” he says.

How to manage the extra load?

The solution to managing an extra 26.5 GW of rooftop solar in the grid is via a combination of batteries and behaviour change, says the Seize the Sun report. The latter means using more electricity during the day.

For households that means switching hot water heaters to midday charging, along with electric vehicles and any other devices, and pre-heating or cooling homes before 5pm.

For companies it often means business as usual, given most are operational during the day. It suggests using time-of-use energy tariffs as the stick to encourage behaviour change – although retailer conduct in setting these tariffs means they already have to win back trust with annoyed consumers. 

But batteries are likely to be the most useful piece of equipment to manage Australia’s rooftop solar abundance, with two million batteries delivering 25 GW of storage capacity required to handle the surfeit of rooftop solar, the report says.

Just this week, New South Wales (NSW) unveiled its new Consumer Energy Strategy, which wants solar battery systems on 1 million homes in the state by 2030. 

Adding batteries is not just about storage. Along with smart inverters and clever software systems, they can help solve a number of problems that can come with trying to manage and coordinate millions of mini power generators.

“‘Dynamic operating envelopes’ allow flexible, real-time adjustment to the amount of energy rooftop solar owners can export to the grid when it is necessary to maintain grid security, without shutting systems down altogether,” the report said.

“This can also avoid the need to restrict the size of new solar installations, so that homeowners and businesses can install larger systems that maximise their investment in rooftop solar. Installing batteries alongside implementing dynamic operating envelopes can ensure household and business rooftop solar systems can generate to their full capacity.”

Installing 5000 community batteries to soak up rooftop solar from households that can’t install batteries is another way to share cheaper rooftop solar power in local areas.

Where else to put an extra 26.4 GW of rooftop solar

Australians love their rooftop solar: already some 3.6 million households have solar panels on their roofs, saving on average $1500 a year, with a capacity of about 23 GW. 

The Climate Council’s survey found 81 per cent of people who already have home solar would recommend it to their friends and family, and 73 per cent of people without panels want to get them in the future, figures that point to the still-untapped demand for more rooftop solar in Australia.

But the Seize the Sun report envisions filling the gaps of Australia’s rooftop solar market to take total capacity to almost 50 GW with an extra 4 million systems by 2030. 

About 2.8 million existing owner-occupied homes could add a solar system, the report estimates. Of the 170,000 new homes built a year, new standards could see changes for the 112,000 that don’t come fitted with a PV system.

But a large proportion would come from businesses and rented and social housing, areas where the tenants are unable to push forward change but may benefit the most. 

“People living in social housing could benefit the most from solar, with tenants saving up to $270 million a year in power bills and governments saving up to $84 million in annual bill relief,” the report said. 

“Nine in 10 small businesses are missing out on the benefits of rooftop solar. An office with 40 workers could halve its electricity bill by installing 24 kilowatts of rooftop solar (equivalent to about four household solar systems).”

Encouraging businesses to invest in those larger scale, more expensive systems could be done through the small scale renewable energy scheme. That scheme supported rooftop solar by creating small scale certificates and requiring energy retailers to buy them, effectively adding a market rebate system to household solar installations.

Refocusing the scheme so large companies generally must buy certificates from small-medium businesses would deliver a similar rebate and likely similar uptake as happened with residential rooftop PV, the report says.

But to achieve the dream, governments need to put rooftop solar and storage at the heart of state and national energy plans, as NSW has moved towards doing. 

“By the end of 2024, Australia’s rooftop solar capacity is set to overtake coal – meaning that at the sunniest times of day, rooftop solar can feed more electricity into our main national grid than coal,” the report says.