In response, the government switched on the world's largest lithium-ion battery in December, and now it is launching a program to install solar panels on homes and distribute Tesla batteries to create the world's largest "virtual power plant".
The homes will reportedly be fitted with 5 13.5 kWh Tesla Powerwall 2 battery systems and kW solar arrays. After the trial period, another 24,000 public housing properties will receive the systems before opening up to other South Australian households.
The state government is tipping in a $2 million grant towards the roll out, as well as a $30 million loan from the Renewable Technology Fund.
Instead, an electricity retailer will be engaged to run the scheme, and sell the power generated by the solar panels and stored in the batteries back to the householders at a discounted rated.
Residents who wish to participate can register their interest on the Our Energy Plan Virtual Power Plant webpage.
Tesla and South Australia are taking their partnership in the field of renewable energy forward.
Social Housing Minister Zoe Bettison acknowledged the coordinated virtual power plant would help the most vulnerable, as it would "take pressure" off the day-to-day household budget.
"What we're doing is effectively putting an extra power plant into the South Australian energy market and the extra competition drives down prices for everyone", state Premier Jay Weatherill said. As well as adding resiliency, the state government claims the 250MW virtual plant could reduce energy bills of participants by up to 30 per cent. The government said in a statement that the project will cost $32 million Australian dollars ($25 million).
In the past two years, the state of South Australia has suffered many blackouts, blamed on high demand and poor supply from both fossil-fuel and renewable generators.
The idea is that by sharing surplus energy produced by rooftop solar panels when not being used, all consumers can benefit.