Victoria solar and battery rebate boost to tap in to record demand

Solar Victoria expects the state government’s boost to the hugely popular Solar Homes scheme will help meet record new demand for a policy that has already delivered almost “half a Hazelwood” of rooftop PV in just two years.

The Solar Homes scheme, which currently offers a nearly $2,000 discount on rooftop solar and more than $4,000 discount on home battery storage, was on Tuesday featured strongly in the state government’s  massive new $797 million energy affordability package.

An allocation of $190 million was set aside for Solar Homes, to help fast-track the delivery of more solar and battery rebates as well as to meet the current high level of demand.

According to Solar Victoria, the environment department offshoot set up to oversee Solar Homes, the new funds will boost the total number of discounted rooftop solar systems and home batteries on offer to Victorian households by 10,000 to 780,000, and extend the rooftop solar rebate to 15,000 small businesses.

It will also allow Solar Victoria to keep the rebate amounts at their current levels of $1,850 (solar) and $4,175 (batteries) for the rest of the 2020/21 financial year.

But perhaps most importantly, Solar Victoria CEO Stan Krpan says the new funds will help accelerate the delivery of the “enormously popular” program, in large part just to keep up with huge post-lockdown demand.

“November is shaping up to be a record month for both applications [for the rooftop solar rebate] and installations,” Krpan told One Step Off The Grid in an interview on Wednesday.

“Our highest day was two weeks ago, in [Melbourne] Cup week. As the industry came back,” he said, referring to the end of strict Stage Four restrictions that had been in force in Victoria from the start of August to the end of October.

“There’s been such a focus from households and consumers around energy prices under lockdown and, obviously, from a solar perspective it makes sense.”

All told, Krpan says the rebate has been a huge success over a relatively short period of just two years, so far delivering roughly 100,000 rooftop solar installations, 115,000 approved applications, and driving the state’s residential PV penetration from 14% to 20%.

“More than 600MW of capacity has been installed under solar homes. That’s half of Hazelwood,” he said, referring to the Latrobe Valley coal-fired power station that was shut down by its French owners in March of 2017. 

“That’s basically a huge power station that we’ve now distributed across thousands of homes. …When you think that were a start-up just two years ago, those numbers, it’s just been incredible.”

But Krpan and the Victorian government are also aware that high penetration of distributed solar on grids designed around centralised coal plants can have its draw-backs, such as the gird-balancing issues that South Australia has rushed to address in recent months.

“Twenty per cent [rooftop solar penetration] used to be a number people were very concerned about,” Krpan said, noting that both South Australia and Queensland have both now sailed past that number.

“But it is something that we have to carefully manage with the relevant agencies. Since the program was launched, we’ve always known we’re going to have to work very closely with AEMO [the Australian Energy Market Operator] and the distribution businesses.”

Krpan notes that the Solar Homes scheme has from the start mandated the use of the sort of smart inverters South Australia has now made compulsory for new rooftop solar installations.

Solar Victoria has also more recently added the requirement that all inverters used through the scheme have a communications portal, to both “future proof” them and to ready them for potential participation in future virtual power plants.

On the battery side, the uptake has been a lot slower – to date, a total of 1139 batteries have been installed or allocated under the rebate. But Krpan says interest is definitely building, just as prices for the technology are starting to come down.

“Batteries have been extraordinarily popular under Covid,” he told One Step. “Today we had a release and made 1,000 available, and 100 have been already been allocated.”

The new funding will mean that a total of 17,500 batteries can be offered to Victorian households at a discount over the next three years. This financial year there will be 5,000 rebates available.

On top of this, Solar Victoria is currently working with the industry on the release of 15,000 rooftop solar rebates for small business, which it expects to launch early next year.

And as part of this week’s big funding announcement, it will also be responsible for managing 250,000 rebates for replacing or decommissioning existing heating with much more efficient reverse cycle air-con, targeting low-income households.

“There’s been a big [government] focus around the economic recovery and the stimulus, but these sort of programs meet multiple policy outcomes, while also putting money into the economy,” Krpan said.