IEEFA Report Highlights Australian Business Rooftops As Major Untapped Source Of Clean Energy In Solar Transition Gap

A new report highlights that business rooftops represent one of the largest untapped sources of clean energy, yet their adoption of solar power remains significantly behind expectations, particularly in Australia.The report, titled “Unlocking the clean energy potential of Australian business rooftops,” notes that while Australia is a global leader in household rooftop solar, the commercial and industrial (C&I) sector is lagging behind.

This gap has created what experts describe as the “missing middle” in the country’s renewable energy transition, sitting between small residential systems and large utility-scale solar farms.According to the report, households in Australia have installed around 22 gigawatts (GW) of rooftop solar capacity, roughly equivalent to the capacity of the country’s coal-fired power plants.

In contrast, businesses across sectors such as manufacturing, retail, agriculture, education, healthcare, and logistics have only installed about 5.6 GW across major electricity grids. This shows a significant imbalance in adoption, despite businesses consuming much larger volumes of electricity overall.Looking ahead, projections suggest that business rooftop solar could grow to between 17 GW and 32 GW by 2050.

However, the report argues that the technical potential is likely even higher if key barriers are addressed and deployment accelerates.The report also points out that commercial and industrial storage systems are similarly underdeveloped, although demand for battery integration is increasing as businesses look for ways to manage energy costs and improve reliability.Several structural barriers are identified as the main reasons for slow uptake in the business sector.

One major challenge is investment complexity. Many businesses operate from rented premises, making long-term infrastructure investment more difficult. In addition, solar and storage projects often fall into a gap where they are too large for residential incentives but too small to attract utility-scale project benefits, creating a financial “middle zone” that is difficult to finance.Another barrier is the complexity of network tariffs.

Electricity pricing structures vary widely across regions and often depend on peak demand timing and usage patterns. This makes it difficult for businesses and developers to accurately predict returns on investment or design effective battery management systems.Grid connection delays also pose a major issue. The process of connecting commercial solar systems to the grid can be slow, inconsistent, and costly, often requiring multiple technical studies and revisions.

In some cases, approvals and installations can take several months to more than a year.The report also highlights an uneven regulatory environment where business-scale solar and storage providers face limitations in competing with traditional network solutions that provide similar grid services.Experts argue that if these challenges are not addressed, investment in business solar and storage will continue to fall short of its potential, slowing down the broader energy transition and leaving significant clean energy resources unused.

To address these issues, the report recommends a stronger and more coordinated policy framework focused on long-term decarbonisation of the electricity system. In the absence of immediate reforms, targeted incentives for businesses could help bridge the investment gap and encourage greater adoption of rooftop solar and storage.It also calls for reform of demand charges, which can make up to 40% of business electricity bills and vary significantly depending on peak usage definitions and timing.

Standardising and simplifying these charges would make it easier for businesses to evaluate and optimise energy investments.Improving the grid connection process is another key recommendation. This includes harmonising technical requirements across regions and introducing faster approval pathways for standardised commercial solar and storage systems.

Finally, the report suggests a broader review of electricity network regulation, designed to better recognise the role of batteries, demand response, and other non-network solutions in supporting grid stability and reducing costs.

Overall, the findings underline a significant opportunity: unlocking rooftop solar potential in the business sector could accelerate Australia’s clean energy transition, reduce emissions, lower operating costs for companies, and help replace retiring coal capacity with distributed renewable generation.