Australians with rooftop solar panels could soon be charged for exporting electricity to the grid, under new rules being recommended by the Australian Energy Market Commission (AEMC).
- The Australian Energy Market Commission says surplus solar electricity generation is causing “traffic jams” in the grid
- It says removing the ban on charging for energy exported into the grid will create “flexibility”
- Electricity bills could be reduced by up to $25 per year
AEMC chief executive Ben Barr said the electricity grid was struggling to cope with the changing power landscape, which was generating more solar energy than ever before.
About 20 per cent of all customers now partly meet their electricity needs through rooftop solar power generation, up from just 0.2 per cent in 2007.
Households sell their excess power back into the grid, putting increasingly unmanageable strain on it.
“The poles and wires businesses were set up to get electricity from a big generator, like a coal plant or a gas plant, down those wires and into your house,” Mr Barr said.
“That change we’ve seen over the last 10, 15 years is a two-way flow … now power is not just going to your house, but power is coming from your house.
“The system hasn’t been set up to deal with that.”
He said “traffic jams” in the network were increasingly forcing power companies to prevent households from exporting solar energy back into the grid.
“What that means is it’s not really an equitable system at the moment,” Mr Barr said.
Among a raft of changes put forward in a draft determination released on Thursday is the removal of a prohibition on charging for energy exported into the grid.
The AEMC said the recommendation was not designed to create mandatory export charges, but to create more flexibility and pricing options.
“Introducing this flexibility should benefit the 80 per cent of consumers who don’t have solar PV (photovoltaic) on their roof,” Mr Barr said.
“We’ve modelled that there’s a small reduction in their bills if this comes in.”
Mr Barr said households across Australia could see a reduction of up to $25 a year on their energy bills.
Feed-in tariffs to be reduced
According to modelling done by the AEMC, introducing an export charge would slightly reduce the returns solar customers received.
“For a medium-sized system, we’re still modelling you’ll have a $900 return per year and a small reduction of $70,” Mr Barr said.
The report shows people with a large rooftop solar system earning more than $1200 a year could see their benefits slashed by about $100.
Those with a smaller system of 2kW to 4kW – which is most households with rooftop solar – could lose about $30 a year.
They would still earn about $645 per year from feed-in tariffs.
Not a one-size-fits-all system
Mr Barr said power companies could create different services that allowed people to avoid charges altogether if they exported power to the grid when it was needed.
“If customers can move around when they’re using electricity, or when their power comes into the grid, they could see a benefit,” he said.
People could be slugged a fee if they export when the grid was busy, but Mr Barr insisted that would not be the default position.
“It’ll only happen when there is congestion on the network, not at all times when you’re exporting into the grid,” he said.
“There’ll be a range of options available to consumers … a bit like your broadband.”
Doing nothing not an option
Mr Barr said grid congestion was a certainty and electricity distributors had to get ahead of it.
The consequences of not doing anything could include statewide blackouts.
“We want to provide the most efficient way of integrating it (solar power) so everybody benefits and we can decarbonise the sector as quickly as possible,” Mr Barr said.
The AEMC received proposals for regulatory change from power distribution company SA Power Networks and welfare groups, including St Vincent de Paul and the Australian Council of Social Service.
They argued that under the current system, households without solar could be unfairly burdened with the cost of augmenting power networks to cope with the increase of new panels, which was already placing a strain on the network in states with heavy solar penetration such as South Australia.
In October last year, South Australia became the first major jurisdiction in the world to be powered entirely by solar energy.
For just over an hour on Sunday October 11, 100 per cent of energy demand was met by solar panels alone.
Charging solar owners ‘inequitable’
There has also been some strong opposition to the introduction of any export charges, including from solar panel owners.
In a submission to the AEMC during consultation, community group Solar Citizens said introducing a fee was not justified.
“It is inequitable to charge solar owners when generators in the transmission network are not charged for accessing the network,” the submission said.
The AEMC’s draft determination is out for public consultation until May 13, with a final determination to be handed down in June.
Mr Barr said the implementation of any changes could be years away.
“The consultation with the poles and wires businesses and the Australian Energy Regulator signing off on any changes will take over 12 [months] to two years,” he said.
Do you take issue with being charged to feed power back to the grid? What does this say about our power system? Should there be a focus on creating a system that better favours and harnesses the advantages of solar and renewables?