Should Australia Mandate Solar Rooftops? 2

Monday, April 6th, 2015
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Were Australia to follow the lead of France in mandating solar rooftops for commercial buildings it could result in the dramatic expansion of a still untapped market.

Under new legislation in France all new buildings situated in commercial areas must cover at least a portion of their roofs with either solar panels or plants.

The law, just recently approved by the French legislature, is scaled down from an initial proposal made by environmental advocates that would have seen the entire rooftops of all new buildings rendered completely green, irrespective of usage.

The Socialist government instead opted to go with the more convenient and pragmatic option of restricting the requirement to commercial buildings alone, and to mandate solar panels for just a portion of their rooftops.

While such legislation may appear heavy-handed, at the very least imposing a certain uniformity of appearance upon the country’s commercial real estate, it will at the very least do wonders for raising their sustainability and efficiency.

Were similar legislation introduced in Australia, it could play a vital role in expediting the uptake of rooftop solar in the commercial districts of urban areas – an area which experts contend remains severely under-utilized.

According to data from the Australian Photovoltaic Institute (APVI) released at the end of 2014, the country has in excess of four gigawatts of rooftop solar PV, a fourfold increase compared to levels in 2011.

Most of Australia’s rooftop solar facilities are small-scale systems, however, installed on the top of residential properties by homeowners incentivised by state-level feed-in policies.

Recent data released by Queensland network operator Energex in March, for example, shows that 27 per cent of detached homes in the south-eastern part of the state are equipped with rooftop solar systems.

The 281,811 rooftop solar systems in south-eastern Queensland currently have a capacity in excess of 937 megawatts.

In South Australia, nearly 23 per cent of homes were equipped with rooftop solar installations as of August 2014 – reaching the state’s target for 2020 over five years in advance.

This copious volume of rooftop solar installations proved capable of meeting over 30 per cent of the state’s energy demand for roughly four hours on Boxing Day last year.

While Australia’s local governments have achieved much success with policies focused on spurring the uptake of rooftop solar by homeowners, it may be time for forceful measures similar to those just adopted by the French government for fostering their installation on commercial premises.

Kylie Catchpole, associate professor of solar engineering at Australian National University, referred to Australia’s “completely untapped market for solar systems on commercial buildings” in mid-2013 – at a time when major strides were being made in the installation of residential rooftop systems in South Australia and Queensland.

This is a particularly acute inconsistency given that solar facilities are often far more extensively used when installed on commercial buildings, which are in active operation during the day while the sun’s still up, unlike many residential properties which might be left unoccupied and idle during such periods.

According to Catchpole, two primary reasons why solar PV systems have proven less popular with the commercial sector are a dearth of capital and the problem of split incentives – with lessees responsible for paying for utilities bills as opposed to building owners who bear any installation costs.

Under such circumstances, and given the vast untapped potential for the installation of solar power on Australia’s commercial buildings, a mandatory measure akin to that put in place by the French Parliament might be the ideal solution.

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  1. Christopher Boulis

    In response to Catchpole's comments as to why PV systems have proven less popular with the commercial sector is due to builders being burdened with the cost of installing such systems when it is the tenants that are generally responsible for utility bills. I believe that if owners added PV systems to their buildings, it would attract higher rents (at least sufficient to cover the capital costs) as tenants will save considerably on power bills.

    • Chris Harvey

      I agree with you Chris, but as we are now seeing here in WA the owners of these buildings are installing Solar PV and now on-selling the power provided by the solar to their tenants. This becomes a win win for the owners as the asset is being paid off by the tenant, and the owner is getting the tax benefit in depreciation of the purchase of the solar. Within a few short years, the asset is paid for and becomes another source of revenue for the owner.
      As you stated the other option is to charge more for the rent, but the tenant then gets the benefits in the cost reduction in their power bills.