Australian homes and cities are increasingly producing and storing their own power.
Author
- Magnus Söderberg
Professor and Director, Centre for Applied Energy Economics and Policy Research, Griffith University
After two decades of growth, solar panels are now on the rooftops of one in three Australian homes. And home batteries have surged after the Australian government began offering subsidies last year. Around 450,000 batteries had been installed by the end of 2025 – about 4% of Australia’s 10.9 million households.
What would happen if these trends continue? It’s tempting to picture a future where Australian homes and cities could power themselves using these two decentralised technologies.
But while rooftop solar and batteries can take us a long way, they aren’t enough to take most households off-grid – let alone run entire cities.
The real question is how much household power demand can be met by solar and batteries, at what times of day, and under what conditions. These five charts show what’s possible – and what’s not.
How far could these technologies take us?
As of April 30, the National Energy Market had close to 26 gigawatts installed capacity of small-scale rooftop solar, which includes small-scale rooftop PV installed on homes, businesses and other eligible premises.
Solar panels never produce at their full capacity. Clouds cut output, and there’s no sun at night. As a result, that 26GW of panels produced 4GW of power on average from January to March this year.
That’s still significant. It’s equivalent to 16% of demand, and almost four times higher than the same quarter eight years ago. Solar-rich South Australia had 28% of underlying demand met by rooftop solar. During sunny, low-demand periods, rooftop solar can meet around 60% of National Energy Market demand.
Rooftop solar capacity has been increasing rapidly since 2017. But it could go much higher still. Australia’s energy market operator (AEMO) projects small-scale solar capacity (rooftop and other small systems) could almost triple by 2050 to around 87GW.
If all suitable household rooftops were fully used for solar, capacity could reach around 61GW. But homes are only part of Australia’s rooftop solar potential. Once commercial, industrial and other buildings are included, the technical potential is much larger – around 179GW.
This also helps explain why AEMO forecasts for small-scale solar capacity eventually rises above 61GW – its forecast includes rooftop and other small-scale systems on businesses and other premises as well as homes. When large-scale solar farms are also counted, Australia is likely to pass 61GW of total solar capacity within a decade.
This progress is significant. But it also changes the problem that the grid must solve.
Before the rise of wind, solar and batteries, coal plants supplied much of Australia’s electricity. These work best when running steadily, as they can increase or decrease output relatively slowly.
Solar changes this equation.
Power from rooftop solar first meets demand within homes and businesses. At times, solar can exceed local demand, requiring excess power to be exported to the grid, stored or curtailed. As the sun sets, solar output falls rapidly. Demand for grid-supplied electricity then rises sharply, often peaking in late afternoon or evening.
This pattern of low daytime demand and high evening demand is known as the ” duck curve “. It poses challenges for grid operators, who have to manage very low grid demand during the day and then rapidly bring on other generation or storage as solar output falls and evening demand rises.
The problem can be partly solved by coordinating home batteries and other types of energy storage, as they can store excess solar and release it at peak times.
What rooftop solar and home batteries can’t do
While rooftop solar and home batteries have clear promise, they’re not a simple substitute for the grid, especially during evenings, heatwaves or prolonged cloudy periods.
Heavy industry, data centres and other big power users require substantial and often continuous supplies of electricity which cannot be wholly met by small-scale energy production.
Home batteries are already reducing how much power households buy from the grid.
But their usable stored energy remains limited relative to the amount of rooftop solar generation available. They’re good at reducing how much expensive power households buy at peak times, but not so good at providing extended backup over an extended cloudy period or during evenings amid an intense heatwave.
What future should we aim for?
What we’re likely to see is rooftop solar and household batteries operating alongside large-scale solar and wind farms to supply much of Australia’s electricity as conditions allow.
We will still need local networks to supply electricity when solar output is low, and carry surplus power in the opposite direction. New transmission lines are needed to better connect large scale renewable areas with cities and heavy industry.
Long-duration energy storage, such as pumped hydro and grid-scale batteries, will be necessary to keep Australia running through periods of low wind and sunlight. A few gas plants will have to be kept as backup.
As the renewable transition progresses, we will need to judge progress not by how many solar arrays and home batteries have been installed, but by how well we can make use of them alongside larger-scale renewables and storage.
We should not aim for a future where household after household quits the grid. Far better to build a resilient, integrated system where homes produce and store more electricity, power grids deal with two-way flows of power intelligently and large-scale renewables and storage cover the periods rooftop solar and batteries can’t respond to.
