Wednesday, November 30, 2011


Revised 11 April 2013

The dominant commercial model for rooftop solar PV has the individual house holder owning the panels and getting the resulting income/free power.  In this post it is argued that it may make sense to give home owners the option of leasing rooftop space to power companies who own the panels and the power produced by the panels.  Advantages of this approach include the reduction of power costs by making it easier to use competitive tendering to set the feed in tariff,  allowing a mix of location and panel orientation better suited to the needs of the total power supply system as well as providing an income stream for home owners who cannot afford to buy panels.
Breaking News:
Since I first started talking about the advantages of competitive tendering for the supply of clean electricity , the ACT introduced their "Reverse Auction" for driving investment in large scale solar.  I don't know all the details of their system except that it is a competitive tendering system.
I have now found this article in the Australian (Giles Parkinson 7 Sept 2012) that announced that the ACT auction process had reached the point where the first contract has been awarded to  Spanish group FRV for a lower than expected fixed price of 18.6 cents/kWh for 20 yrs.  This price may seem a bit high but, based on Qld experience it should actually reduce ACT power bills by replacing more expensive sources of day-time power. End of breaking news.

Rooftop solar started off with idealistic and/or technophillic people buying and installing their own roof top solar PV panels on their own house.  When governments started using subsidies and feed in tariffs high enough to encourage investment in roof top solar PV the whole thing morphed into middle class pork barrel.  Poorer people simply couldn’t afford the investment even though it had become attractive. There are other disadvantages:

  1. The investment rate is slow because there is a limited pool of investors.  Most of these investors will install far fewer panels than their roof could hold.
  2. The small size of each installation reduces the potential savings of larger installations and the possibility of having one converter to process the DC power from a number of roof tops. A larger, more sophisticated converter may help solar PV be more grid friendly.
  3. Feed in tariffs are set by governments or power companies at a level they are sure will spur investment.  Competitive tendering is not used to reduce price to the grid.
  4. Poorer householders cannot afford to install solar PV even when the investment gives good returns.
  5. Homeowners orient their panels to maximize total power generated per day even though this means that less power will be produced during high demand periods at the beginning and end  of the day.  
  6. Solar PV is being concentrated in suburbs where homeowners can afford them.  This may not be the best outcome in terms of both distribution system stability or producing more power during high demand periods during the day.
If we are serious about rooftop solar there is a case for changing the dominant commercial model to one where power companies install and own the panels and lease roof space from homeowners. The attraction of this approach include:
  1. The power companies (not necessarily major ones) should be better able to mobilize finance. Investment rates should improve.
  2. There will be cost savings arising from installing more panels per roof and linking the DC power from a number of houses that are near to each other.  The linking of more than one house to a larger, more sophisticated converter may also make solar PV more grid friendly.
  3. The use of competitive tendering to drive down the price paid for solar PV becomes more practical
  4. Homeowners in poor areas can make some extra money without having to  invest or maintain.
  5. It will be easier to control the mix of location and orientation to give a better result for the system as a whole.
This does not mean that householders should be blocked from installing panels on their roof and selling power into the grid.


  1. Leasing roof top space sounds like a good option to add to the mix.
    The pricing of FiT and power from the grid remains a puzzle. I cannot see past the logic of them being the same, as it's the same product. And Net rather than Gross because Net means the power is being used at the source, I assume.