Imagine if Australian cities became major producers of clean energy, rather than relying on far-flung solar and wind farms.

Far fetched? Hardly. Our cities and towns are full of warehouses, commercial areas, shopping centers and factories. These types of buildings have one very important underutilized resource—large expanses of unoccupied rooftops, perfect for solar and battery power stations.

If our commercial and industrial areas took up solar and storage, it would be revolutionary. Electricity could be produced in cities and used in cities, reducing transmission losses. Commercial businesses could generate solar power during the day, store it in batteries on site and sell it back to the grid during the evening peak.

Our calculations show Australia has enough unused commercial and industrial rooftop space to supply at least 25% of our annual electricity use—five times as much as currently supplied by gas-fired generators.

Australia is already the world's top rooftop solar nation, per capita. But our solar is largely on our houses. We have four times as much residential solar as we do on commercial buildings. In Europe, it's the opposite—there's 1.5 times as much solar on businesses as on houses. The EU's new Solar Energy Standard is expected to double rooftop solar capacity in four years.

In our new discussion paper, we make the case for a massive expansion of battery-backed solar photovoltaic power on Australian business premises. Call it "business power."

There are excellent reasons for policymakers and building owners to look at this. It offers a potentially large new source of cheap, reliable, clean electricity with little downside risk.

What's the benefit of warehouse power stations?

Rooftop solar has been Australia's quiet achiever. In 2023, rooftop solar produced 70% more electricity on Australia's rooftops than either hydro generators or solar farms.

Solar farms are largely built in rural areas, as it's easier to get large tracts of land. But city-based solar has advantages. City solar doesn't change land use, need vegetation cleared or change the beauty of the countryside. Solar and wind farms in rural areas have to send power to cities, necessitating expensive new transmission lines. Some planned new lines have proven controversial.

When you add storage, you turn cheaply produced solar into a much more valuable commodity—reliable evening power. In the evenings, the sun has set and demand soars. This is when much more expensive coal, gas or hydro generation dominates supply.

Locally produced battery-backed solar can also make better use of our distribution networks—the urban poles and wires. In a recent report, the peak body for Australia's energy networks found surplus capacity in our distribution networks could be used by decentralized power generation and storage.

By contrast, some large rural transmission lines are already hitting capacity limits as distant wind and solar farms take up spare capacity.

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