Rooftop solar panels used to be an unusual sight in Australia - but we’re now being forced to switch them off.
There’s a power shift underway, and understanding what’s happening is critical for businesses.
Over the last two decades, there has been an explosion in rooftop solar panels across Australia, with approximately 3.5 million installations today generating 20,000 gigawatt-hours of electricity annually.
That’s enough energy to power almost 2 million homes, continuously, for an entire year.
But there's a catch: when it’s too sunny, there can be too much energy for the grid to handle.
Power grids are designed to operate within a certain range of demand. If the demand drops too low, operational challenges and safety concerns arise. If it's too high, power grids can become overloaded, risking widespread blackouts.
Maintaining this delicate balance is a challenge for the Australian Energy Market Operator (AEMO).
In the past, relying solely on coal for energy allowed AEMO to precisely determine the required energy at a given time, balancing supply and demand to perfection.
However, with rooftop solar, the AEMO has minimal control.
If businesses consume all their solar-generated electricity and don't draw power from the grid, the overall demand decreases. But if they feed excess electricity back into the grid, there's a risk of overwhelming the system.
It's a catch-22.
The long-term solution to balance our energy needs is to build more battery storage to absorb excess power during peak times, but that's still a work in progress.
As an interim measure, AEMO has introduced emergency solar switch-off mechanisms when there's excessive power. In other words, to avoid overpowering the grid, solar systems are forcibly switched off.
Naturally, businesses are frustrated.
On one hand, they're encouraged to reduce their carbon footprint and save money; on the other, they're told they may not be able to fully operate their solar systems.
Switching off rooftop solar should only ever be a temporary measure, yet we're witnessing more states adopting this mechanism.
With the sector lacking certainty, businesses find themselves compelled to proactively manage their energy affairs.
This isn't an easy task.
In some jurisdictions, there are over 40 different tariff codes, more than 20 energy retailers supplying the area, contestable meters, demand charges, usage charges, and various technologies like solar, battery, LED lighting, power factor corrections—the list goes on.
Critical to this is monitoring your organisation's energy usage. With smart meters, most of this can be done online. From a solar perspective, monitoring software is often available from the solar operator.
Fortunately, there are professional energy management companies that can handle this on your behalf, allowing you to focus on running your business.
Just as businesses engage accountants to monitor their taxes, it’s worth investing in an energy management company that knows the tricks of the trade and can proactively monitor your energy usage and expenditure.
As the energy landscape continues to undergo transformation, it's crucial for businesses to stay informed and adaptable.
And to seize the power they have.
