Social housing tenants in the Illawarra are set to benefit from an $11 million pilot program designed to demonstrate how rooftop solar, home batteries and virtual power plant (VPP) technology can deliver immediate cost-of-living benefits.
The project, located in the Illawarra region south of Sydney, will install rooftop photovoltaic (PV) systems and home batteries at selected social housing properties.
The energy systems installed across participating homes will be connected through a virtual power plant, allowing stored electricity to be used within households or exported to the electricity grid when it provides the greatest value to residents and the broader energy system.
The Albanese and Minns governments announced the initiative as part of the second phase of the $1.1 billion Social Housing Energy Performance Initiative (SHEPI). The program is backed by $800 million in federal funding, with the remaining funding contributed by state and territory governments, and aims to improve the energy performance of 100,000 social housing properties by mid-2031.
The Illawarra VPP pilot will receive $10 million in federal funding, with a further $1 million contributed by the NSW Government.
Solar and battery installers, along with VPP operators, will have the opportunity to provide feedback on the design and delivery of the program through a market sounding process being conducted by EnergyCo until 25 October.
The pilot is expected to benefit hundreds of households across the Illawarra Renewable Energy Zone (REZ). Some properties that have already received support through SHEPI may also be eligible to participate.
“People living in social housing should share in the benefits of cheaper, cleaner energy,” federal Assistant Minister for Climate Change and Energy Josh Wilson said.
NSW Energy Minister Penny Sharpe said the initiative would help residents reduce their electricity costs.
“The Illawarra is Australia’s first urban Renewable Energy Zone, making it the ideal place to trial practical solutions that support households with the cost of living,” she said.
Rewiring Australia chief executive Francis Vierboom also welcomed the announcement, highlighting the importance of bringing more energy generation and storage into urban areas.
While the Illawarra REZ was initially developed to support the region’s heavy industry, including the BlueScope steelworks, Vierboom said the zone had evolved into “more of a social and cultural testbed”. Rewiring Australia operates its flagship Electrify 2515 project in the region.
According to the NSW Government, the first phase of SHEPI is expected to upgrade around 24,000 social housing properties by June 2027.
The second phase, which includes $145.3 million in federal funding nationally, is expected to provide upgrades to a further 13,500 social housing residences across NSW, with work scheduled to begin from January.
NSW currently has around 95,000 social housing properties, with approximately 15,000 already receiving upgrades through the program.
Social housing residents cannot apply directly for SHEPI. Instead, housing providers identify and select the properties that will receive upgrades.
The Federal Government estimates that more than 40,000 social housing properties nationwide have already benefited from the SHEPI program.
The Illawarra pilot will provide an opportunity to test how coordinated rooftop solar, battery storage and VPP technology can be deployed across social housing while helping households reduce energy costs and supporting the broader electricity grid.