Tesla Is Helping Turn South Australia Into a Vast Solar Energy Plant

Image: Pexels
Image: Pexels

South Australia is quickly becoming one of the most ambitious renewable energy hubs in the world. After arriving on the scene late last year when billionaire entrepreneur Elon Musk helped the Australian state install the world’s largest lithium-ion battery in just a matter of weeks, on Sunday the government announced plans for the world’s largest virtual power plant.

A virtual power plant (VPP) is a fancy name for distributed electricity generation. In this case, it will entail a network of 50,000 home solar systems backed up by battery storage. A trial run on 1,100 homes is already underway, using 5kW solar panel systems and 13.5kWh Tesla Powerwall 2 batteries (to store the excess energy created during the day) for each household. After the trial, the systems will be installed on 24,000 public housing properties, before being opened up to other South Australians shortly thereafter over the next four years.

South Australia Premier Jay Weatherill said “we lead the world in renewable energy with the world’s largest battery, the world’s largest solar thermal plant and now the world’s largest virtual power plant,” in an interview from the state capital of Adelaide. “We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills.”


A review by Frontier Economics showed that when completed, the 250-megawatt plant is expected to lower energy bills for households by 30 percent.

Supporters of the program—aside from scoring potential political wins in upcoming elections—hope the virtual power plant will stabilize the region’s electricity grid, which has suffered expensive blackouts in recent years due to high demand and a 40 percent reliance on wind energy. A weak supply of fossil fuel power hasn’t helped either, as domestic coal plants have shuttered and demand for natural gas exports threatens supplies.

As an analysis by the Australia Broadcasting Corporation points out, even though the hardware and installation will be funded by government grants and loans, the power generated by the panels and stored by the batteries will not be “directly owned by the households, but may well be sold back to them via a retailer.”

This means that rather than benefit from zero-cost power from their rooftop panels and in-home energy storage, a retailer will sell the power generated by the solar panels and stored in the batteries back to households at a discounted rate.


“Nonetheless, the scheme should help all consumers, whether or not they sign up as participants or not,” the analysis concludes.

News editor at Earther.com.

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So, the takeaway here, as I understand it, is I rent my roof space and a spot on the wall of my garage to the power company in exchange for a 30% discount on my bill? They own the panels and the battery, they own the power generated, I get a 1/3rd discount when I buy that power back from them. Is that about right?