Australia's solar leadership is at risk due to a 'missing middle' in business adoption, according to IEEFA's latest report. While households have embraced rooftop solar, businesses have only installed 5.6GW, despite consuming more electricity. This disparity highlights structural issues rather than a lack of financial appeal. IEEFA estimates the technical potential for solar on commercial and industrial (C&I) buildings could reach 17-31GW by 2050, and up to 86GW when rural and agricultural buildings are included. This massive untapped potential is concerning, especially given the financial benefits of solar and battery storage projects, which often offer payback periods of five to seven years. The report identifies four key barriers hindering business adoption: investment challenges at the business level, complex and inconsistent network tariffs, a fragmented and slow grid connection process, and an uneven policy and regulatory landscape across jurisdictions. The business-level investment problem is exacerbated by the prevalence of rented commercial premises, where landlords, not businesses, make the final decisions and see little financial incentive for solar investments. This 'split-incentive' problem is a well-documented issue in energy efficiency research. Network tariffs further complicate matters, with 16 distribution network service providers offering distinct structures, making it difficult to model investment returns and develop scalable business models. Demand charges, a significant portion of business electricity bills, are inconsistently applied across providers, adding to the complexity. The grid connection process is another obstacle, with unpredictable timelines and varying procedures across jurisdictions, increasing costs and uncertainty for projects already competing for capital. The uneven policy landscape, with patchy and overlapping support mechanisms at the state and federal levels, further hinders progress. The financial stakes of inaction are high. Solar and battery storage offer protection against fuel price shocks, estimated at AU$1 billion per month, a figure that has become increasingly relevant with rising wholesale electricity price volatility. As PV Tech's NEM Data Spotlight for May 2026 documented, utility-scale solar prices hit AU$225.88/MWh during a generation shortfall, highlighting the potential of embedded commercial generation to offset supply gaps. IEEFA recommends a multi-pronged approach to address these barriers: targeted financial incentives to overcome business-level investment challenges, standardization of network tariff structures, streamlined grid connection processes for C&I projects, and a more consistent policy framework at both state and federal levels. These measures would unlock the vast solar potential on existing rooftops, contributing to Australia's growing solar market, which includes utility-scale projects. While rooftop solar's annual generation contribution to the NEM has grown, the residential segment is primarily responsible. The C&I rooftop potential alone could reach 40GW, but CSIRO projections suggest slow growth to just 17GW by mid-century if barriers are not addressed. The scale of this opportunity also has broader supply chain implications. Accelerating solar deployment at all scales increases pressure on silver supply chains, with current consumption rates raising questions about material availability within years if recovery and recycling rates remain low. A large-scale C&I rooftop buildout would intensify these supply dynamics, emphasizing the need for parallel investment in module recycling infrastructure.
