Australian households and businesses are set to speed up the transition to renewables as energy prices soar and payback periods for solar and batteries shorten.
Solar companies have reported a spike in inquiries, some by as much as 750 per cent, since the October 25 federal budget revealed electricity would jump 56 per cent and gas by 44 per cent over the next couple of years.
Nigel Morris from Solar Analytics said higher energy prices reduced the payback time of solar and batteries, because of increased savings on bills.
"The economics are getting better over time, and the more electricity prices go up, the better the payback is," Mr Morris said.
He said a solar system typically took around five years to payback, compared to 10 years if you add a battery.
The difference that higher energy prices make to the time it takes to repay a solar and battery system is more dramatic than solar on its own.
Mr Morris said using a conservative estimate of a 10 per cent annual increase in energy bills, the payback time for a solar and battery system would be two years shorter than when compared to a 3 per cent increase.
Natural Solar chief executive Christopher Williams said interest in batteries was growing, adding that every order the company had received since the federal budget included one.
"Consumers are losing trust or confidence in the grid, and the grid stability to provide power at a price that's remotely affordable," he said.
"And naturally, that's seeing a very strong transition towards solar and batteries."
There are some government incentives to home owners to reduce the cost of a solar system, like rebates and low-interest loans.
However, Mr Williams said the price of installing a battery remained too costly for many people and more subsidies were needed to get consumers over the line.
"I think a battery subsidy would make absolute sense, and really reduce electricity bills for thousands of Australians around the country," he said.
"Tens of thousands of batteries installed across the grid, will help to stabilise the grid and will actually bring down prices for everyone."
High electricity bills were the biggest driver for Simon McCredie to install solar at his home.
"Now is the time, there's rising mortgage costs," he said.
"Everything is going up … So I wanted to bring my power bills down.
"And I felt that this was a really good way to do it. As well as being good for the environment as well."
However, Mr McCredie has held off on purchasing a battery for now because of the cost.
"If the price of them [batteries] was down a bit more, it would really help out, or if there was some real government rebates and I wouldn't think about that shorter warranty."
Solar uptake grows
There is now 18,200MW (or 18.2GW) of rooftop solar in Australia, which will generate about 24,000 gigawatt hours (GWh) of electricity this year, according to the Clean Energy Regulator (CER).
The CER found Australia had the highest coverage of solar in the world with 3.3 million systems installed.
That meant roughly one in three suitable households had solar PV panels, according to the regulator.
This year CER expects an additional 2,700 megawatts (MW) of rooftop solar capacity, or between 300,000 to 330,000 systems, will be installed.
A rush of home improvements during COVID and cheap money fuelled a record solar boom of 3,200MW in 2021.
However, because installations had increased since August this year as energy prices rose, the regulator was expecting solar take-up to accelerate.
There has also been an increase in existing homes and small businesses replacing gas and older less efficient electric hot water systems with solar water heaters and air source heat pumps.
A scheme run by the CER that covers one third of the cost of installing solar hot water systems and heat pumps, has resulted in the installation of 1.47 million systems with about 100,000 set to be installed this year.
Businesses going green
Brick Lane Brewing installed a 375MW solar system this year, which head brewer Jon Seltin said was the largest at any independent brewer in Australia.
"It supplies around about 30 per cent of our total electrical requirements, that's offset quite a large fraction of our total CO2 emissions," Mr Seltin said.
The energy-intensive business is currently protected from soaring gas prices that are pegged to the international market because of its supply contract.
However, it has moved to get ahead of the looming bill shock and has so far reduced the brewery's gas use by 38 per cent.
"In brewing, we've got quite a favourable energy and heat sort of spread," Mr Seltin said.
"So it allows us to use things like heat pumps, solar thermal and photovoltaics to really reduce our reliance on fossil fuels.
"Simple and relatively inexpensive measures like insulating valves, filters and steam traps have cut gas use by 5.2 per cent," he said.
Research from the Climate Council shows there are also benefits for households switching off gas.
Households in capital cities that go fully electric could save between $500 and $1,900 a year, depending on which state they live in.
Mr Seltin said the next goal for Brick Lane was to decarbonise by 2025, something he wanted to do through technology instead of relying on offset schemes and offset certificates.
"Which does keep me up a little bit at night, but we are well started on it," he said.
"We've tackled all the low-lying fruit … Our next big challenge is to try and transition away from fossil fuels as our primary source of thermal energy."
Are we ready for a solar boom?
Energy experts say big changes are needed to stabilise electricity grids to cope with the influx of solar.
"The network in Australia, the poles and wires, if you like, they're really designed for one-way energy flow to come from traditional coal-fired generators and go down the lines to houses," Mr Morris said.
"Currently, in most parts of Australia, your solar system will actually be constrained from generating as much as it possibly can because of those technical limitations," he said.
"So as a consequence, some of the rules and regulations actually restrict the amount of solar that you can push into the cables and wires."
Mr Morris said there was no time to waste in getting on with upgrading the grid to allow "two-way flow" as outlined in the Australian Energy Market Operator's plan.
"What we really need to see now is all the good thinking that's been done to be translated into on-the-ground technology."
Pete Leeson, director of Leeson Group and Volt Tiles — a company that's making solar roof tiles installed on mainly new builds — said another barrier to Australia's solar boom was how tough it is to make products locally.
The company currently manufactures its roof tiles in China but has plans to move production to Australia.
While there are a couple of local manufacturers, Mr Leeson said there was a lot of work to do to kickstart the industry.
"The problem is that we need vertical supply chain, so we need to be manufacturing everything we need to be getting the polysilicon, the silver, all those components, we need to make silicon ingots, turn those into wafers into the cells and then make the solar modules," he said.
"That's not something to happen in the next 12 to 24 months."
"That's something strategically federal and state government needs to do to make sure that we've got energy security and a really good supply chain in Australia."
Mr Leeson said the consumer-led renewables boom would only hasten as more people drove electric vehicles.
"We need to be focused on technologies and manufacturing technologies here," he said.
