Australian Businesses Missing Major Rooftop Solar Opportunity Due to Structural Barriers, Report Finds

Australian commercial and industrial (C&I) buildings represent one of the country’s largest untapped clean energy resources, but a series of structural barriers continue to limit the adoption of rooftop solar and battery storage systems, according to a new report released by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report, Unlocking the Clean Energy Potential of Australian Business Rooftops, highlights a significant gap between the rapid uptake of rooftop solar by households and the comparatively slow adoption by businesses, despite commercial and industrial facilities consuming substantially more electricity.

Australia’s household rooftop solar installations have reached approximately 22 GW of capacity, a figure comparable to the generation capacity of the nation’s coal-fired power fleet. In contrast, only 5.6 GW of rooftop solar capacity has been deployed across commercial and industrial sites, including factories, retail outlets, supermarkets, farms, schools, and hospitals.

According to the report, business rooftop solar capacity could expand to between 17 GW and 32 GW by 2050, with the technical potential estimated to be even higher. While interest in commercial battery storage is growing, deployment levels remain significantly below those seen in the residential sector.

The study identifies four major barriers restricting investment in business solar and storage projects. These include challenges associated with business ownership and leasing arrangements, limited access to suitable incentive programs, complex and inconsistent network tariff structures, lengthy grid connection processes, and regulatory frameworks that hinder competition between distributed energy providers and network operators.

Johanna Bowyer, Lead Analyst for Australian Electricity at IEEFA and co-author of the report, said these barriers continue to constrain investment and slow the deployment of clean energy technologies across the commercial sector.

The report notes that many businesses face competing capital investment priorities, while solar and storage projects often fall between residential and utility-scale incentive schemes. In addition, complex network tariffs and prolonged grid connection procedures increase project uncertainty and development costs.

To accelerate adoption, IEEFA recommends the introduction of a comprehensive policy framework aimed at supporting commercial and industrial decarbonisation. Proposed measures include targeted incentives for business solar and storage projects, standardisation of network tariffs, streamlined grid connection processes, and reforms to electricity network regulations to better accommodate non-network energy solutions such as battery storage and demand management.

The report argues that addressing these challenges could unlock substantial new clean energy capacity, support Australia’s transition away from coal-fired generation, reduce electricity costs for businesses, and contribute to the country’s long-term emissions reduction objectives.

As Australia advances its energy transition, the report identifies the commercial and industrial sector as a critical yet underutilised component in meeting future electricity demand through distributed renewable energy and storage technologies.