Australia has built one of the world’s most successful distributed energy markets, off the back of residential rooftop solar. However, Commercial and Industrial (C&I) customers have not been enabled in the same way. This stems largely from the fact that C&I installations are too big for ‘small-scale’ support, but too small to access and participate in mechanisms designed for utility-scale generation.
C&I consumer energy resources (CER) – including rooftop solar, batteries, and controllable load – can lower energy costs and improve reliability for businesses, while helping to reduce wholesale prices, ease network peaks, defer network investment and cutting emissions. Therefore, they are currently a major untapped opportunity in the energy transition.
Key findings
- Australia has substantial untapped C&I CER potential. Existing C&I capacity is only around 4 GW of rooftop PV and 0.3 GW of BESS. Based on useable roof area, up to 63.3 GW of rooftop photovoltaic (PV) could be physically accommodated, with a corresponding BESS technical potential of 28.7 GW / 78.7 GWh. (This is a technical ceiling, not a forecast or guarantee of commercial viability.)
- A targeted incentive could establish a viable business case – but a subsidy alone would not be enough. Under the report’s central assumptions, a 30 per cent subsidy on customers’ upfront BESS costs, combined with wholesale-linked import and export pricing, supported a modelled uptake of 29.0 GW of PV and 3.16 GW / 8.67 GWh of BESS. This remains below the Australia-wide installation potential, indicating that a substantial opportunity would remain even after support.
- C&I CER could deliver up to $39.7 billion in annual gross system benefit (before PV and BESS installation costs are deducted) comprising of $39.2 billion in wholesale market benefits and $0.5 billion in network peak reduction value. The network estimate is conservative because it excludes improved utilisation, hosting capacity and local constraint management value and uses high-level long-run marginal cost estimates. This is equivalent to $454.8 billion in gross total benefits, on the modelling assumption of 6 per cent discount rate over 20 years. After accounting for $42.9 billion in total installation costs, including $2.0 billion funded through the subsidy, the resulting net benefit is $411.9 billion.
- C&I CER uptake could reduce national emissions equivalent to shutting a coal-fired power station. Under the central assumptions, net grid-supplied electricity falls by 35.31 TWh annually, reducing emissions by an estimated 21.88 MtCO₂-e each year, with an indicative value of approximately $831 million annually.
- Access to stronger price signals is the biggest driver of modelled uptake. Under the same subsidy assumption, adopted PV increases from 10.0 GW under conventional retail pricing with a fixed export value, to 29.0 GW when C&I customers can access wholesale-linked import and export prices. The incentive must therefore be accompanied by tariffs and market products that reward flexible consumption, storage, and efficient exports.
Key recommendations
- Establish a dedicated C&I CER support scheme via SRES
The federal or state governments should act now. Announce a dedicated C&I CER scheme with a clear commencement pathway so businesses, financiers, installers, retailers and aggregators can build a delivery pipeline. The mechanism would explicitly support C&I batteries, building on the successful use of the SRES architecture to deliver the recent Cheaper Home Batteries Program and could include an extension of that program with a clear set of criteria.
- Establish a reform package in parallel to address the regulatory barriers
In parallel, government and market bodies should establish a reform agenda for C&I tariffs and market access, streamline connections, and enable workable landlord–tenant and energy-as-a-service models so that the party investing can share in the savings and system value.
Read our full report here: Nexa Advisory – Unlocking the Benefits of C&I Rooftop Solar and Batteries