A South Australian company will launch the country's first 100 per cent renewable energy utility company, with the author of the 2008 Climate Change Review signalling his support.

Professor Ross Garnaut has been appointed chairman of Zen Energy and said the company's launch would be a game changer.

"I've been disappointed that the established energy companies have not taken the opportunity that's there," he said.

The company will use a combination of solar power generation, battery storage, and localised energy grids to create self-sustained communities that will buy back the power they generate.

For years, Zen Energy has been putting battery units in people's homes.

Now its chief executive Richard Turner plans to take entire communities off the grid — from social housing stock, to apartment buildings and regional communities.

He said he will generate the power, then sell it back to users at a fraction of the current costs.

"We're looking at a spot in the market very soon where we're going to be almost half the cost of the grid," he said.

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It could be the end of the power grid as we know it

It is just the latest disruption in an energy revolution sweeping across Australia which could spell the end of the power grid as we know it.

With one of the highest rates of rooftop solar uptake in the world, chief executive of the Energy Suppliers Association of Australia, Matthew Warren, said Australia is conducting an experiment with no idea of the possible result.

"Change is the new normal in this sector, and really no one knows where that change ends," he said.

In councils across Australia, from Byron Bay to West Australia, local governments are looking to ditch their dependence on the expensive old grid, and generate, store and use their own renewable energy.

Need for a backup option

But there is a catch.

When the wind stops blowing, or cloud cover lasts for weeks, all of these communities will need a backup option.

And for most of them, that means at least one connection back to the grid.

"It's no good saying I only use the network ... some of the time," Mr Warren said.

"Because everyone's going to say that eventually."

"The economically inefficient way to go is to just charge a fixed charge for being connected to the grid," Professor Garnaut said. ( Sarina Locke: ABC Rural )

Mr Warren's organisation represents existing energy suppliers and retailers.

Their challenge is how to pay for a grid that is increasingly being used as a backup.

"There's no guarantee that just because you're an incumbent player, that you're going to survive that transformation to a consumer good market," he said.

"Everyone's going to be working out ways to make money and to survive in this brave new world."

And that could mean electricity consumers end up paying higher tariffs.

"Disruption is going to keep occurring, we don't want to stop, especially those disruptions that improve the efficiency of the system and decarbonise the system," he said.

"We've just got to make sure when we do have this disruption it doesn't happen at the benefit of some, and at the cost of others unfairly."

Zen Energy is pushing for grid usage costs to be calculated for the energy people use, rather than a flat fee.

"That's the economically efficient way to go," Professor Garnaut said.

"The economically inefficient way to go is to just charge a fixed charge for being connected to the grid. That's economically irrational, so how the regulators go in recouping the costs becomes important."