Rooftop solar panels, such as these in Melbourne, currently account for around 16 percent of renewable electricity generation in Australia.

A new renewables marketplace in Australia makes small-time energy moguls of homeowners, in order to make use of their solar hardware to smooth erratic supply and demand.

The Guardian reports that the government-backed initiative, called the Distributed Energy Exchange, will allow homeowners and businesses to effectively rent out their solar generation and storage capacity. Smart devices will enable a building’s hardware to, say, offer up spare battery capacity when excess power is available somewhere on the grid.

While systems within individual buildings seem small in isolation, in aggregate they can prove hefty. A domestic battery like the Tesla Powerwall, for instance, can provide five kilowatts of power—if 5,000 homes worked together, they could supply 25 megawatts, which is not insignificant.

The main benefit to the Australian grid, then, will be to better match supply with demand without the need for building new generation capacity. By storing energy during lulls in use, the network will be better able to cope with surges in demand. The same concept will also help smooth out the intermittent nature of solar generation.

This is essentially the concept of the virtual power plant, which uses software and battery storage to combine separate small solar panels as a single large source. A number of virtual power plant trials have been carried out in Germany and the U.S., but so far there has been no wide-scale deployment of the technology.

Australia’s marketplace initiative will initially be no different: it will be tested in two locations, each involving around 5,000 households.



(Read more: The Guardian, “Virtual Power Plants Get Around Solar Power’s Intermittency Problem,” “Real Electricity Flows from Virtual Power Plants”)