Pressure on grid may see households charged for exporting solar

Mar 25, 2021
Pressure on the electricity grids will only get worse, with solar households potentially looking at fees fee to export surplus electricity into the grid. Source: Getty

Australians with solar panels have long enjoyed the benefits of going green, often receiving money back for the energy their panels have created, however they could soon be charged for exporting power to the grid under new rules proposed by the Australian Energy Market Commission (AEMC).

Households with solar panels that generate excess energy — often the elderly or those who live alone — currently sell their excess power back into the grid, however the AEMC say the surplus electricity created is putting unmanageable strain on the grid and causing “traffic jams”.

AEMC Chief Executive Benn Barr said the changes aren’t designed to force everyone to pay export charges, but rather to better manage the power with incentives like rewarding solar and battery owners for sending power to the grid when its needed and charging for sending power when it’s too busy. These proposed incentives will give customers more reason to buy batteries to store the power or consume the power they generate at busy times on the grid.

“This is about creating tailored options, not blanket solutions,” he said. “We want to open the solar gateway so more Australians can join the 2.6 million small solar owners who have already led the way. But it’s important to do this fairly. We want to avoid a first-come, best dressed system because that limits the capacity for more solar into the grid.

“Within 10 years, half of all energy users will be using home energy options like solar. We must make sure this seismic shift doesn’t leave anyone behind because every Australian, whether they have solar or not, deserves an affordable, sustainable power system.

“We want to reassure solar customers that we’re not proposing they should all start paying export charges. We expect networks to deliver pricing proposals in close consultation with consumers, which may include options where they don’t have to pay for exports.”

About 2.6 million Australians have rooftop solar panels.

Barr said an alternative to the AEMC plan would be to build more power poles and wires to handle the influx the solar panels are creating, however, he said this was an expensive cost which would ultimately be reflected in Aussies’ power bills.

“Letting networks give customer incentives to use the system better means supply and demand on the grid can be smoothed out over the course of the day. It helps address large amounts of solar being exported in the middle of the day when it benefits the system least.”

The AEMC said it had modelled the impact of the new changes and found that 80 per cent of customers would see their bills drop because they would no longer pay for solar export services they weren’t using.

For the other 20 per cent of customers, there could be a range of export charge impacts, depending on system size. A 4−6kW system would still earn on average $900 compared to $970 they earn now.

Doing nothing was not an option according to the AEMC’s draft determination, which said rooftop solar owners could suffer even bigger cuts if changes were not made.

“While export charges on a 4−6kW system might lead to a marginal drop in solar earnings, owners will face that same drop if they are constrained from exporting energy just 10 per cent of the time. Being constrained 50 per cent of the time would reduce their solar earnings by more than $300 per year,” it said.

“We need to think differently about the power system – including its pricing structures. We found that buying a battery would allow customers to benefit more and also help the system.

“We have to start planning for a different future now because there is still a lot of work to do and change will take time. If we start now, with the right caveats and protections in place, we will avoid costly crisis solutions further down the track.”

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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