WA MARKET UPDATE
The South West Interconnected System (SWIS) continues to evolve under the influence of very high rooftop solar penetration and its isolated grid structure. May marks a transitional phase, where shortening daylight hours are beginning to reshape demand patterns and increase reliance on evening generation.
Unlike the National Electricity Market (NEM), SWIS pricing is fully contained within a single system. This means local generation mix, rooftop solar output, and internal demand balancing have a much stronger influence on pricing outcomes.
As a result, small shifts in weather, demand, or solar output can have a disproportionate impact on wholesale prices.
Daytime Solar Suppressing Grid Demand
Rooftop solar continues to significantly reduce grid demand during daylight hours, particularly in residential-heavy regions. However, through May, this effect is becoming slightly less stable as seasonal conditions change.
Key dynamics include:
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Sustained reduction in daytime grid demand due to high rooftop solar penetration
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Continued low wholesale pricing during peak solar production periods
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Shortening duration and consistency of solar-driven price suppression
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Increased sensitivity to cloud cover and short-term weather changes
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Gradual weakening of solar offset as daylight hours reduce
For commercial users, daytime cost advantages remain strong, but are becoming more variable compared to summer conditions.
Evening Peak Demand Increasing
As solar output declines earlier in the afternoon, SWIS is experiencing a more pronounced ramp-up in grid demand during evening hours.
This transition is becoming sharper.
Key factors include:
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Faster evening demand ramp-up as solar generation drops off earlier
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Increased reliance on gas and dispatchable generation during peak periods
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More defined evening peak pricing structure compared to daytime periods
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Reduced system flexibility due to lack of interconnection with other grids
These dynamics are contributing to:
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More consistent evening price uplift relative to daytime pricing
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Greater importance of managing consumption after ~4pm
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Higher exposure for businesses with evening-heavy operations (hospitality, retail, aged care, accommodation)
In practice, SWIS is becoming increasingly “peak-defined” — with a growing share of total cost driven by evening usage.
Futures Pricing
Forward pricing remains relatively stable overall, but structural tightening is gradually emerging beneath the surface.
Key drivers include:
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Reduced incremental solar contribution during winter and shoulder periods
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Increasing reliance on gas and firming generation during peak demand
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Gradual tightening of supply–demand balance in evening periods
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Limited external balancing options due to grid isolation
While SWIS remains less volatile than many NEM states, pricing is becoming more concentrated around peak periods, meaning evening usage is increasingly driving marginal cost outcomes.
what it means for your business
The SWIS is increasingly defined by one clear shift: daytime solar is reducing costs, but evening demand is becoming the dominant driver of total energy spend.
For WA businesses, particularly hospitality, retail centres, and aged care, the key risk is not headline price volatility, but unmanaged evening load that is increasingly expensive relative to daytime consumption.
The most important focus areas right now are:
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Reviewing whether tariffs reflect growing evening peak cost concentration
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Testing whether solar systems are delivering expected reductions after 4pm
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Identifying opportunities to smooth load (HVAC, hot water, refrigeration cycling)
From a procurement perspective, SWIS is increasingly rewarding businesses that can demonstrate stable and time-aligned load profiles, rather than those with high but poorly managed consumption peaks.
The strongest outcomes are now coming from businesses that actively align usage with solar timing and deliberately reduce exposure to evening peak demand.
If your business does not yet have a strategy in place, we can help. Contact us for a free bill check or to discuss a tailored energy procurement plan.
In March, the Government of Western Australia introduced the Made in WA Energy Affordability Investment Program (MEAIP), a $153.3 million initiative designed to support large industrial and manufacturing businesses in reducing energy costs and improving efficiency.
The program provides low-interest loans and financial support to help businesses invest in energy-related upgrades, with a strong focus on reducing long-term operating costs and improving competitiveness. This reflects a broader policy shift toward supporting industry through electrification, efficiency, and on-site energy solutions, rather than relying solely on wholesale market pricing.
The program is designed to support investments in:
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Energy efficiency upgrades to reduce overall consumption and operating costs
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On-site generation and battery storage, helping businesses manage peak demand and price exposure
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Electrification of processes, reducing reliance on gas and improving long-term cost stability
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Advanced manufacturing technologies that lower energy intensity
what this means for businesses
This represents a direct opportunity to reduce energy spend while also improving resilience to market volatility. By lowering upfront capital barriers, the program enables businesses to take greater control over their energy strategy and reduce reliance on external supply. It also signals a clear policy direction in WA toward self-generation, demand-side optimisation, and long-term cost management, which may become increasingly important as the energy system evolves.
Grid Investment and Renewable Integration Continues to Be the Core Focus
WA’s energy strategy continues to centre on expanding and reinforcing the SWIS to support higher levels of renewable energy. State energy agencies, including Energy Policy WA, are continuing to prioritise transmission development and system upgrades to support renewable expansion and long-term reliability.
A key ongoing focus is the rollout of new transmission and network investment programs designed to connect large-scale renewable generation in regional WA into the main grid. This includes strengthening capacity between renewable-rich zones in the mid-west and goldfields and major demand centres in Perth.
This builds on broader government planning frameworks aimed at supporting WA’s long-term transition toward a higher renewable share in the SWIS, which is expected to require significant network expansion over the coming decade.
What this means
WA is not constrained by renewable generation potential, but by how quickly transmission infrastructure can be delivered to connect new projects to the grid.
New Grid Connection Rules for Solar and Batteries (May 2026 Implementation)
One of the most relevant near-term regulatory developments is the introduction of updated technical requirements for small-scale solar and battery systems, which take effect from 1 May 2026.
These changes are designed to improve system stability in response to the rapid growth of rooftop solar across WA, particularly during periods of low daytime demand when export levels can strain local networks.
Under the new framework, households and small businesses installing or upgrading systems will need to comply with updated “whole-of-site” connection requirements, meaning solar and battery systems will be assessed as a single integrated unit rather than individually.
In practical terms, this allows:
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better coordination between rooftop solar, batteries, and inverters
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improved network visibility for system operators
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greater ability to manage exports during peak solar generation periods
What this means
While this is a technical rule change rather than a price-driven reform, it signals a clear shift toward tighter control of distributed energy exports to maintain grid stability as rooftop solar penetration continues to rise.