Solar is one of the most popular technologies for cleantech entrepreneurs to build their businesses upon. This is perhaps unsurprising given how fast the technology has progressed in the last decade. Furthermore, it is the technology upon which some of the most successful clean energy businesses have been built. Rooftop solar photovoltaics (PV) has been particularly popular and yet, in our view, there are still areas of untapped opportunity.
We intend for this discussion paper to help entrepreneurs new to the sector discover business opportunities in rooftop solar. To do so, we have summarised statistics and research on the uptake of rooftop solar in Australia. We have also identified startups that are focussing on underserved areas and pointed out potential gaps that other entrepreneurs may wish to address.
There appears to be four main areas where solar uptake is lagging and could benefit from additional innovation. These areas are:
- Rental properties: The proportion of rental properties with solar installed is one-seventh that of owner-occupied premises, largely due to the split incentive problem.
- Properties occupied by first home buyers: People appear to be far less likely to install solar panels on the first home they buy, at least initially.
- Apartments and semi-detached premises: Standalone homes are five times more likely to have solar installed than other dwelling types, most likely due to strata laws and other barriers faced by apartments and semi-detached buildings.
- Commercial and industrial (C&I) buildings: C&I uptake of solar has lagged residential buildings, despite potentially standing to benefit more from the technology.
While some solar startups are focussing on renters and apartment-dwellers, the C&I sector is relatively underserved, in our opinion. Matter, SunTenants and SunYield have developed solutions for rental properties while Allume Energy serves apartment buildings. Some of these startups and a couple others do cater to C&I buildings. However, we haven't seen the same focus on addressing the barriers facing C&I solar uptake, suggesting there could be untapped opportunities in this area.
If the barriers to these four areas are fully addressed, Australia's rooftop solar capacity could double. We estimate that in the order of 7 GW of rooftop solar could be installed, requiring close to $9 billion of investment. We hope this paper proves useful to entrepreneurs who wish to set their sights on this opportunity.