The global market for rooftop solar energy remains untapped yet is crucial for the world to achieve 2050 net-zero targets, according to a new report released by BloombergNEF and Schneider Electric.
The report, Realising the Potential of Customer-Sited Solar, states that there is a need for careful policy design to unlock the full potential of the market.
With the right regulation and tariff design in place, the rooftop solar market has the ability to exceed 2,000GW and enable the deployment of 1,000 GWh of energy storage by 2050.
The market has the ability to power 167 million households and 23 million businesses across the globe if fully optimised, according to the study.
In addition to ensuring consumers play their part in the decarbonisation of the economy, the rooftop solar market provides economical returns for hosting sites, creates employment and reduces peak demand.
According to the report, Australia is an example of where the market has returned favorable benefits to prosumers in less than 10 years since 2013 when rollout began.
Australia has managed to add 2.3GW of rooftop solar capacity for residential customers in 2020, a move taking the country closer to decarbonisation goals, says the report.
Vincent Petit, Head of the Schneider Electric TM Sustainability Research Institute, said: “Customer-sited solar is a huge opportunity that’s often completely overlooked. Thanks to falling costs and policy measures, it’s already being rapidly deployed in some markets. Its massive scale-up is very likely.”
Recommendations to expand the market include:
- Governments and project developers to ensure programmes create economic cases for households and businesses investing in the technology. Incentives is one way to encourage adoption. France which has introduced incentives has recorded a 500MW increase in installations in 2020, according to the study.
- A key consideration at the early stage of market development is to avoid an unsustainable boom. Policy designs should account for the fact that solar costs will continue to fall over time, and moderate support to reflect these changing dynamics.
- Add solar during construction of new buildings to reduce so-called ‘soft costs’, such as marketing and sales costs, as well as labor and construction costs.
- Combine solar with energy storage to expand flexible energy capacity. Coupling solar with energy storage enables solar energy plants to be optimised in performance. Energy storage allows electricity generated during times when generation is high to be used when generation is low and demand high.
Yayoi Sekine, BNEF’s Head of Decentralized Energy, adds: “The evolution of customer-sited solar is to add some form of flexibility, which has the ability to unlock a much higher penetration of solar.
“The most obvious form of flexibility is batteries, but energy storage will come in many forms, including shifting demand and using electric vehicles.”
To encourage the development of solar-plus-storage projects, the report calls for the introduction of favorable export rates, time-of-use retail electricity rates, payments for storage to provide grid services and the implementation of demand charges.
Find out more about the report.