Study Reveals Selling Excess Solar Power to Neighbors Boosts Profits

(MENAFN) Homeowners with rooftop solar panels in Australia could see greater financial returns by selling excess electricity directly to neighbors instead of feeding it back into the grid, according to new research published in Renewable Energy.

The peer-reviewed study, conducted by University of South Australia (UniSA) in collaboration with Deakin University, highlights how peer-to-peer (P2P) energy sharing models can outperform traditional feed-in tariffs — particularly as nearly 40% of Australian households now have rooftop solar systems, according to a UniSA statement released Friday.

Currently, feed-in tariffs in Victoria have dropped below 5 cents per kilowatt-hour, while retail electricity prices remain around 28 cents. By contrast, P2P arrangements allow sellers and buyers to set mutually beneficial prices somewhere in between.

"Selling surplus PV (photovoltaic) energy directly to neighbors at a mutually agreed price in between can be more profitable for solar householders and still cheaper for buyers," said lead author and UniSA researcher Kevin Wang.

The study modeled different solar scenarios using real consumption and generation data from a solar-equipped home in Geelong, Victoria. Researchers evaluated outcomes from grid-only sales, battery storage, direct neighbor-to-neighbor sales, and a hybrid of batteries and P2P trading.

Findings show that peer-to-peer energy sharing not only reduced grid reliance by more than 30%, but also yielded the highest financial return. Over a 20-year period, a 10kWh battery paired with P2P trading generated an estimated AU$4,929 (approx. US$3,208). In contrast, relying solely on grid feed-in resulted in negative returns, primarily due to low tariffs and high battery costs, Wang noted.

Battery storage also played a dual role: while it increased household self-consumption to nearly 38% under the battery-plus-P2P model, it reduced the surplus power available for neighbors.

"Battery size was a key factor. Systems with larger batteries saw reduced returns because of higher capital and maintenance costs, as well as less surplus energy," Wang explained, noting that smaller batteries resulted in the quickest payback periods.

The researchers advocate for fine-tuning both battery sizing and pricing strategies to maximize household benefits while easing stress on the electricity grid. They also called for regulatory support and technological advancements to help scale peer energy trading systems nationwide.

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