A three-year Australian trial involving nearly 300 households found that participants paid less for imported electricity, earned more from their solar exports and became more confident that the energy system was operating fairly.
The households were not part of a laboratory experiment. They were real customers using retailer Energy Locals and the Enosi Powertracer platform as part of a Virtual Energy Network (VEN) that allowed buyers and sellers of solar energy to trade energy value within the group.
The trial, led by Deakin University, attracted more than 1,600 expressions of interest and ultimately involved 296 participating sites.
Can the solar value gap be reduced?
One of the frustrations of today’s electricity market for many solar owners is the difference between what they receive for exported solar energy and what they pay for imported electricity.
In most cases, the value that households receive for exported solar energy is only a fraction of what retailers charge for the electricity they consume at the same time.
Virtual energy networks are a proposed way to bridge this gap.
Rather than changing how electricity physically flows through the grid, a VEN allows participating households to share the value of locally generated solar energy through a digital trading platform. The aim is to offer solar exporters better returns while reducing the costs of electricity purchases for households.
Unlike virtual power plants, which typically coordinate batteries to provide services to the grid, VENs focus on bringing together energy buyers and sellers within a participating network.
What was found in the process?
According to the final report, 39% of electricity imported by participating households was transacted through the Virtual Energy Network, while 36% of exported solar power generation was traded within the network.
The strongest results were achieved in the middle of the day. Between 8 a.m. and 4 p.m., almost all imported electricity was delivered through peer-to-peer transactions rather than traditional retail arrangements.
The report also found that participants adjusted their behavior over time. Importing households increased their electricity consumption during periods of high solar power generation, with the largest increase occurring between 1 p.m. and 7 p.m.
Overall, households that purchased electricity paid less than usual, while households that exported solar power received higher compensation for their electricity production.
The study authors argue that these results show that peer-to-peer trading can promote more efficient use of distributed solar energy while providing benefits for both sides of the transaction.
More than just lower electricity bills
Not all of the reported benefits were financial.
Survey responses showed that participants became more confident that the energy system operates fairly and that renewable energy brings benefits to local communities.
The report suggests that this could be an overlooked benefit of peer-to-peer trading models. Rather than simply exporting solar energy to the larger grid, participants were able to see a clearer connection between the energy they produce and the households that use it.
What happens next?
The trial comes at a time when many solar owners are wondering how they can increase the value of their systems. Falling export payments are only part of the story, but fixed tariffs and other electricity price changes are also attracting increasing attention.
Virtual energy networks will not solve every challenge facing solar rooftop owners, and there are still questions about scope, regulation and retailer involvement. However, the results suggest that there may be alternatives to the traditional model, in which solar owners receive a low feed-in tariff while neighboring households pay many times more for electricity.
While the trial focused primarily on solar energy production and electricity consumption, researchers see opportunities to expand the concept to include home batteries, electric vehicle charging, dynamic pricing and other technologies that help households make better use of locally generated renewable energy.
Whether VENs will become a mainstream feature of the Australian electricity market remains to be seen. However, after three years in real operation, the experiment shows that the concept has gone beyond theory.
In the meantime, choosing the right power plan can still have a significant impact on the value households receive from rooftop solar. SolarQuotes’ Compare Electricity Plans and Solar Feed-in Tariffs page is a useful starting point for checking what retailers are currently offering.
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