Cutting out the middleman – i.e. electricity retailers – and selling your surplus solar power direct to your neighbours sounds appealing. It’s like Facebook Marketplace for your solar electricity!
Solar energy trading is set to become a great way to get more value out of your solar power system and battery, whilst reducing your reliance on the grid. By investing now in solar panels and home energy storage, you’ll be ready to get on board with electricity trading when it becomes widely available. Get in touch with our solar experts if you’d like a quote.
Solar energy trading benefits
Solar energy trading is the future of renewable energy. It unlocks the power of literally millions of residential and business solar systems allowing owners to:
- Get paid more for solar exports
- Buy solar power direct, for less
- Choose where you buy your power from
- Cut out the middleman – i.e. the electricity retailer
- Help stabilise the electricity grid
- Increase the amount of renewable energy flowing through the grid
It’s a win/win/win – for you, the environment and the reliability of the electricity grid. That’s why it’s starting to take off.
And the good news is that Aussie energy tech companies are carving out a reputation as world leaders in this fast-developing market.
Solar energy trading: the big questions
Some of the key questions customers ask us about solar energy trading are:
- How does it work?
- Can you do it now?
- Is it worth it, financially?
Let’s answer these questions in turn.
How does it work?
Blockchain is the technology underpinning virtually all energy trading platforms in Australia and internationally. Essentially, blockchain is a database that processes and stores information in a way that is transparent, secure and super-fast. It is used in many different applications, including Bitcoin.
Blockchain enables something called peer-to-peer (P2P) energy trading, which is the buying and selling of energy between two grid-connected parties.
With P2P energy trading, you can trade electricity with your family, friends or an organisation of any type (not just an electricity retailer). It doesn’t matter who or where they are – as long as they are connected to you via the electricity grid.
Theoretically, you don’t need a solar power system to participate in P2P energy trading. However, virtually all emerging energy trading platforms – certainly in Australia – require a solar power system and, in many cases, battery storage as well.
And, as side note, if the thought of going off-grid has ever crossed your mind, you’ll be glad you didn’t when energy trading kicks off in earnest. By staying grid-connected, you’ll be able to participate in the exciting new world of energy trading. Cut yourself off the grid and you’d be out of the game!
Can I do it now?
The answer to this question is YES! That is, if you live in parts of Australia (Europe and the USA) where pilots are taking place.
The answer is also YES, if you want to join some of the more innovative Virtual Power Plants (VPP) in Australia – like sonnenFlat and the SimplyEnergy VPP. Whilst these Virtual Power Plants don’t give you unlimited scope to trade your solar power, they do go some of the way.
Australian energy trading pilots
Australia’s first energy mini grid, launched in 2016, was the Mooroolbark Mini Grid Project on the outskirts of Melbourne. The technology platform used for this project was deX, a decentralised energy exchange developed by Australian energy tech company, Greensync, in partnership with ARENA, the Australian Renewable Energy Agency. This trial enabled local energy sharing and trading between households in the mini-grid.
The Yackandandah mini grid, in north east Victoria, was another path-breaking pilot testing the model of energy trading between fourteen households. As local resident Donna Jones said, the goal is “that energy generated by solar panels and stored in home batteries can be shared between neighbours, even those without their own panels.”
Whilst these pilots are small-scale, there are some larger energy trading programs you can join now in Australia.
Innovative Virtual Power Plants
One interesting energy trading opportunity for Australian homeowners is sonnenFlat, an innovative electricity tariff designed for households with a sonnenBattery and solar power system. With sonnenFlat, you pay a small flat rate for your electricity based on a certain monthly usage. If you exceed that usage, you pay a per kilowatt hour charge for extra power used during that period.
Sonnen is a German battery manufacturer known for its premium batteries and its innovative technology to enable energy trading. It’s definitely worth a look, if you are interested in fixing your electricity costs at a guaranteed low rate whilst not being locked in to a contract.
Another widely available energy trading option is the Simply Energy VPP. Available in NSW, Victoria, South Australia and Queensland, you need a solar power system and a Tesla Powerwall 2 battery to participate. In return you get bill credits and a guaranteed discount each month off your electricity and gas usage and supply charges.
Whilst neither sonnenFlat or the Simply Energy VPP allow you to trade directly with your neighbour, they do utilise the emerging energy trading platforms discussed above.
One company that is making it possible for to trade solar power is Perth energy tech, Powerledger. With their blockchain-based energy trading platform, Powerledger has teamed up with Carlton United Brewery to create the VB Solar Exchange program where households can trade their excess solar energy for VB Beer. How cool is that!
Is it worth it financially?
In time, energy trading is going to be well worth it. You just have to look at some of the underlying numbers:
- Average cost of buying electricity from the grid: 25-30 cents per kilowatt hour
- Average feed-in tariff from electricity retailers: 7 cents per kilowatt hour
- Around 50% of the cost of grid electricity is the distribution cost (i.e. how much it costs to transport electricity from the generator – typically a coal-fired power plant hundreds of kilometres away – to your home)
It’s easy to see that if you are buying and selling power locally, you cut out the electricity distribution cost. That’s around 12.5 – 15 cents per kilowatt hour. Plus, there’s no electricity retailer in the middle taking a cut. More savings!
So, when you start trading your own home-grown clean solar power (and who doesn’t want that!) with your neighbours, you can see how it’s going to be worth more than 7 cents per kilowatt hour (the current average feed-in tariff).
There’s room for you – the energy producer – to make money. It’s a good deal for your neighbours too as they’ll be able to buy your power for less than buying it from the grid.
Whilst direct energy trading with your neighbours isn’t widely available in Australia, it’s only a matter of time before it becomes commonplace. The pilots that are running are proving the technology. It won’t be long before solutions are implemented on a much larger scale.
If you’re interested in the benefits of energy trading, getting a quality solar panel system and a VPP-ready battery is a great starting point. You’ll benefit immediately from reduced power bills and be ready to share your power with friends, family and your community.