ARENA’s investment focus is on supporting:
- studies and knowledge sharing activities with a particular focus on generating and disseminating evidence to inform regulatory, commercial and/or financial barriers to renewable energy in residential or commercial buildings
- demonstration activities with a particular focus on:
- innovative approaches to reducing costs, increasing efficiency or proving the reliability of innovative renewable generation technologies in residential or commercial buildings
- innovative business models.
ARENA does not fund proposals involving the demonstration or deployment of existing commercial renewable energy technologies in existing conditions.
This assessment is based on desk top study and information gathered from ARENA-funded projects and activities.
Likely scale and potential for growth by 2030-40
The combined residential and commercial sector accounted for 17% of final energy consumption in 2014-15. This consumption is expected to rise by 1.2% each year through to 2049-50, with the share of final energy consumption projected to rise to 18%.
The sector is expected to be a major source of growth in electricity consumption in the medium to longer term, reflecting population growth and relative growth in the services sector.
The total energy consumption of Australia’s commercial buildings in 2009 was estimated to have been 3.5% of the nation’s gross final energy consumption in that year. Total energy consumption in commercial buildings is expected to rise by 24% over the period 2009 to 2020.
Electricity dominates the fuel mix for all commercial buildings in Australia, with a share of almost 83 per cent in 2009. Natural gas accounted for over 175 of the fuel mix, while the combined share of LPG and diesel was less than 1%.
Heating, ventilation and air conditioning (HVAC) is generally the largest end use for electricity, followed by lighting and equipment. Space heating is the dominant end use for gas.
Commercial property developments are expected to include increasing levels of renewable energy technologies as developers respond to emerging codes (such as those that apply to Sydney’s Barangaroo development) and increasing community demand for building sustainability.
Deployment of solar PV is growing in commercial buildings, with more than 15,000 businesses across the country having now installed a solar power system. In 2014, 52 of newly installed solar power systems on commercial buildings were over 100 kW but less than 1 MW.
Solar PV reached approximately 5% of residential electricity use in 2012 and could reach about 13% in 2020. Solar hot water systems also have an established market in the residential sector. These markets are expected to grow without the need for additional subsidy beyond the small scale certificates generated under the RET.
Building integrated solar PV is in its infancy although at least one Australian company has an integrated solar PV + thermal roof tile system on the market.
CSIRO is developing a solar heating and cooling system which is at a prototype testing stage.
There are commercial markets for ground source heat pumps in Western Australia and Victoria as the technology and business model are mature.
Renewable energy in the residential and commercial building sectors is characterised by a mix of fully mature and emerging technologies, services and business models. The dynamic nature of the various markets in these sectors means that there is scope for ARENA investment to help unlock opportunities for end users by supporting technology development and demonstration as well as new business models.
ARENA investment could be particularly important in supporting:
- development of Australian technologies
- financial and business innovations that tackle high transaction costs; capital constraints; and split incentives (namely the disconnect between the investment made by the building owner and the financial benefit derived from that investment, which accrues to the tenant through reduced energy bills)
- activities that address local barriers to uptake.
In the case of technology development and cost reduction that occurs primarily as the result of global activity, ARENA could support activities that enable adaptation of those technologies to Australian conditions.
Gap in ARENA portfolio
As at June 2015 ARENA had committed a total of $16.8 million to nine projects that will help integrate renewable energy into buildings or building materials. ARENA’s 2015 research and development funding round was open to application that involved the integration of renewables into buildings or building materials. Therefore ARENA will review the value of further projects in this area once successful projects in the 2015 funding round are known.