Rooftop solar in Australia has reached a high system capacity and is prompting rapid growth in home batteries. To explore how to transfer that success to the U.S., a study group of U.S. regulators met with energy sector leaders in Australia.
Generating sources in Australia’s National Electricity Market in 2025
The CHARGED Initiative
Distributed solar and storage could play a larger role in the U.S. if regulations were more like those in Australia, suggests a report from GridLab, Advanced Energy United and RMI that documents a study trip to Australia by U.S. state utility regulators.
Thanks to rooftop solar’s low cost in Australia—less than a third of typical U.S. costs—its capacity in the nation’s predominant electricity market exceeds that of grid-scale solar and wind combined, as shown in the featured image above.
The study group found that Australia’s approach to permitting and installation are key to rooftop solar’s low costs.
Friction-free interconnection
For example, in the state of South Australia, residential customers may install a large rooftop solar system with no need for interconnection approval, in exchange for accepting flexible export limits, which modeling has shown would allow export of full generation more than 98% of the time in most areas.
That approach has helped rooftop solar and other renewables to now provide close to 75% of South Australia’s electricity consumed, said Bryn Williams, principal at Energy Horizons, on a webinar accompanying the report.
The flexible export mechanism relies on an Australian smart inverter standard that enables a distribution network operator to communicate with each customer’s solar inverter over the internet, for example by household Wi-Fi, to vary how much each system can export at any given time, according to available grid capacity.
GridLab Executive Director Ric O’Connell told pv magazine that the same flexible export approach to interconnection could “absolutely” be taken in the U.S., by relying on smart inverters for rooftop solar that meet the IEEE 1547-2018 standard. He noted that the Australian smart inverter standard was based on California smart inverter standards “which became IEEE 1547-2018.”
Thirteen U.S. states have adopted the IEEE 1547-2018 standard, along with some utilities in other states, according to the Interstate Renewable Energy Council.
Flexible interconnection of distributed solar has made some headway in the U.S. For example, in Colorado, regulators have ordered a utility to promptly propose a “flexible interconnection or energization tariff” for distributed energy resources, as required by state law. In New York, a utility has piloted flexible interconnection based on real-time grid capacity available. And California has created an option for distributed generation to interconnect based on a schedule-based limited generation profile.
Utilities supporting solar
Contributing to rooftop solar’s success in Australia is the fact that the nation’s distribution utilities do not generate electricity, so “there is no incentive” for them “not to support solar,” said Williams, on the webinar.
Overall, renewables provided 43% of the electricity consumed last year in the populous eastern half of Australia, Williams said.
Home battery subsidies
As rooftop solar capacity has soared, Australia’s federal government began subsidizing home battery installations to help smooth out the generation profile. In the last six months of 2025, homeowners installed 4.6 GWh of storage, exceeding the combined capacity of the 12 largest grid-scale batteries in the country, the report notes.
The subsidy program’s goal, Williams said, is to reach 2 million new home battery installations and 40 GWh of new capacity over the next four years.
Australia is expected to update its smart inverter standard to add battery communication functionality, the report says.
“Consumer energy resources”
For both distributed solar and storage, Australia’s approach is to require technologies to enable control by the distribution utility, but to allow each customer to decide whether to hand over control, based on their assessment of the value of doing so. Australians use the term “social license” to describe this approach, and refer to distributed energy resources instead as “consumer energy resources.”
Allocating fixed costs
The report cautions that the “equity dimension” of recovering fixed network costs “as the solar-heavy customer base grows” is “real and unresolved.”
Forty percent of Australians are renters and cannot install and benefit from rooftop solar, said Brian Spak, general manager for advocacy and policy for Energy Consumers Australia, on the webinar.
The wholesale electricity market operator for eastern Australia, known as AEMO, is actively reviewing how to recover fixed costs.
Counting DERs in planning
The report highlights a voluntary effort by three distribution network operators in the state of New South Wales to demonstrate how transmission planning could incorporate cost-saving opportunities for distribution network development. The distribution network operators produced a joint distribution system plan analyzing the hosting capacity, flexibility value and grid services potential of consumer energy resources operating as active assets.
That effort, which the utilities completed without financial support, led AEMO to incorporate distribution network development opportunities into its modeling for its draft 2026 Integrated System Plan.
For New South Wales alone, a modeling study projected cost savings with a net present value of AUS $2 billion to $4.3 billion, largely from better utilizing network capacity and integrating consumer energy resources.
Four lessons
Study tour participants “brought home” four lessons, the report says:
The report is titled “Lessons from the 2026 Charged Initiative Australia study tour.” The companion webinar features study tour participant Dan Scripps, chair of the Michigan Public Service Commission.
The Charged Initiative aims to “chart a path” for greater electrification on the distribution system.
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