There’s no doubt that the future of energy is renewable. Since the inception of solar panels and the increasing emphasis on minimising our household environmental impact, the general trend has been ‘the more solar, the better’. But did you know that a significant increase in solar installations can and does have an impact on the electricity grid? It makes sense that as our household infrastructure and requirements change, old models of doing things will need to evolve.
So how does solar impact the electricity grid? What do we need to know, and how can we manage this impact?
Plico is heavily involved in the conversation and the action that’s already underway. Let’s explore in some more detail.
How does solar impact the electricity grid?
On its own, one household generating and using solar energy doesn’t have a major influence on the grid. Certainly, solar can have a positive effect for one family - but the grid won’t necessarily experience any significant impact from the lower usage of coal-generated electricity, or the solar being fed in, from one home.
Multiply this by thousands of households, and there can be noticeable effects on the grid. Rooftop solar accounts for more than 11 percent of Australia's power supply, with small scale solar predicted to more than triple in the next three decades. In fact, Australia has the highest per-capita uptake of solar panels globally, so we’re on the front line of emerging challenges.
One of the ways in which solar impacts the electricity grid is when lots of households are supplying their excess solar to the grid. This can happen on a mild, sunny day when energy needs are lower (e.g. we don’t need to turn on the A/C) but solar supply is high. This is known as Minimum Demand.
With one of the highest levels of installed rooftop solar in the world, the WA electricity grid experiences noticeable impact during sunny days with low energy demand. This can present a challenge and affect the stability of the electricity supply. As a result, the WA State Government introduced the Emergency Solar Management scheme to empower the energy market operator to remotely control rooftop solar systems, to maintain grid stability. This is a last resort measure for extreme events and is one way that the growing solar uptake can be proactively managed. The feed-in tariff, which is the return solar owners receive for their solar exports back to the grid, has also been declining over recent years. For households on a flat tariff rate, this now sits at just 2c per kWh between 9pm and 3pm.
To highlight the extent of the impact solar is having on the grid during minimum demand times, the New South Wales government recently introduced a cost (yes, a cost!) to solar owners for their grid exports. This two-way tariff, or “sun tax”, will see NSW households charged 1.2c per kWh for exports between 10am and 3pm and be paid 2.3c per kWh for exports between 3pm and 9pm. While this may seem like a drastic measure, it has been implemented to encourage more solar exports when they are needed most (during peak demand periods) and less when energy demand is low (during minimum demand periods).
And this raises another challenge for the grid; peak demand.
At the other end of the scale, when supply to the grid is low, such as on hot summer evenings when high energy use appliances like A/Cs and pool pumps are running, the grid may struggle to keep up with the high usage requirements. It’s at this time when solar exports drop that the grid needs them most!
The traditional electricity grid wasn’t built to manage significant peaks and troughs in demand, and solar contributes to this variance. This puts pressure on the grid network and can lead to blackouts.
How can we manage solar’s impact on the grid?
As advocates for renewable energy and helping as many Aussies as possible access solar energy, at Plico we’re also aware of the challenges of migrating to a new way of doing things. It’s not realistic to expect a straightforward switch from one infrastructure to another.
That’s why, in addition to solar panels, we put a strong emphasis on solar batteries and our Virtual Power Plant (VPP). These resources help streamline the move from coal-generated power to a renewable energy ecosystem. Here’s how.
A solar battery can make a difference
When you install a solar battery, you become more reliant on your own energy generation and less reliant on the grid. Therefore, fluctuations in your energy demands are not as impactful on the grid.
For example, in the Minimum Demand example above, rather than supplying your excess solar to the grid, it will be stored in your battery for use later.
Similarly, in the ‘high demand’ scenario when solar supply is low, you may be able to draw on your solar battery, rather than the grid.
Either way, having a solar battery irons out your household’s impact on the grid. Multiply this by hundreds or thousands of households and we have a noticeable positive effect, taking pressure off the grid.
How does a virtual power plant (VPP) work?
Taking it a step further, VPPs can support the grid on a larger scale during extreme events. This is part of a ‘managed solar’ solution and is one of the effective and realistic ways we can transition to renewable energy as the predominant supply.
VPPs are networks of distributed energy resources (DER), in our case household solar + battery and battery only systems, that are managed remotely to generate, store and transfer energy to and from the grid. VPPs can increase or decrease energy supply to the grid almost instantly, providing a flexible, cost-effective and clean energy solution to the support the grid.
Acting as a decentralised source of power, when demand exceeds supply, energy from the VPP can be fed into the electricity grid to avoid blackouts and outages. A central control system manages the supply of power that comes in from across the individual installations. In the case of Plico’s VPP, we manage the solar energy generated from our members' solar panels and their solar batteries.
Similarly, a VPP can be activated during a Minimum Demand scenario, by reducing supply to the electricity grid by switching off solar panels (and compensating our members for their energy) and increasing demand by charging our members’ batteries from the grid. Once again, blackouts and outages can be avoided through the use of a VPP.
A VPP can therefore mitigate grid instability and provide a backup should the electricity grid experience Minimum Demand or Peak Demand scenarios. What’s more, members are rewarded for their involvement in an activation, as Plico members were in January 2023.
A VPP is a powerful way to support our community’s transition to a sustainable, renewable energy solution and reduces the need for more costly energy infrastructure.
Solar batteries and Virtual Power Plants are the way forward in helping move from a traditional coal-powered electricity grid to a renewable one. They provide a smooth path forward, while also reducing blackouts and outages along the way.
Proudly Australian, Plico’s mission is to make solar + battery solutions as affordable as possible for everyone. Our unique offering includes solar + battery, battery only or solar only solutions, ongoing support and no big upfront costs - all for just one low weekly instalment. If you’d like to find out how much you could save, talk to one of our switched-on team by calling 1300 175 426.
Have a question about solar + battery?
