In Western Australia, an 8-week experiment is underway in the National Lifestyle Villages in Busselton, near Perth. Using the virtual monetary technology behind “bitcoin,” 10 households will be able to track their energy usage and the amount of excess electricity generated by their rooftop solar systems. The software will allow them to see how much money they could be paid for that excess solar power if they were allowed to sell it to their neighbors instead of back to the grid.
Jemma Green, Research Fellow at Curtin University’s Sustainability Policy Institute, is chairwoman of startup Power Ledger, which is conducting the 8-week solar power trial. She says more than 22% of Perth and South West homes now have solar panels. She calls the trial a natural development in a marketplace clearly hungry for solar and battery technology.
“When Tesla announced its Powerwall battery on April 30 last year, it had $800 million in ‘pre-orders’ in the first week,” she says. “As prices come down we will see mainstream take-up, the research suggests. It’s clear people want control of their electricity and to commercialize it how they see fit.”
At the present time, residents can sell their excess solar power to Synergy, the local utility, for 7 cents per kilowatt, but must pay 26 cents per kilowatt when they take power from the grid. Green believes the experiment will prove people can sell their own electricity at a rate that falls somewhere in between. She says the new scheme will allow people to sell electricity to their neighbor “or give it to your Mum.”
Asked whether the government and the local utility would oppose the plan, Green said, “Absolutely not! There’s a war on to see who gets your excess electricity. In the next couple of years, batteries will take all the renewable electricity and store it.” Since Australian customers pay a fee every time they access the grid, more grid transactions will mean more revenue for utilities and ultimately strengthen the grid.
“This presents an enormous opportunity for traditional providers whose current model is in decline,” Ms Green says. “Over the next few years, battery storage will become cost competitive and will compete with grid electricity. All this will reduce the utilization of the grid even more. But if you relate to the grid as a trading platform and enable peer-to-peer technology consumers to use it and pay fees, you ensure its ongoing relevance.”
Last month, we reported on a similar experiment going on in a neighborhood in Brooklyn, New York. But once this trial period is over, Power Ledger plans to begin a real-world solar power trading system that will involve 80 homes in the South West region. That will be a world first, Green says.
There are big opportunities for retailers and other market participants in leasing and co-ownership arrangements, according to Green. Power Ledger has already been in contact with companies in Japan, Brazil, and New Zealand to deploy the technology. Clearly, the advent of private solar power is going to bring significant changes to the conventional electric utility model, and that’s a good thing.