Energy experts slam plan to charge households supplying solar to the grid
25th March 2021

Solar-powered households will unfairly prop up energy networks facing declining revenue under proposed rules to allow operators to charge customers supplying excess power into the grid, experts say.

The Australian Energy Market Commission is consulting on rule changes to allow the charges, something it says is needed to fund infrastructure upgrades to cope with a swift rise in the volume of rooftop solar power flowing into the grid.

Energy experts are criticising a proposed rule change to allow network operators to charge electricity customers for supplying power to the grid . Credit:Dion Georgopoulo

Victoria University energy economist Bruce Mountain said the AEMC has caved into lobbying from energy networks, which “face a commercial threat”.

“The networks make money by shipping electricity around their poles and wires, and now they want to make money for receiving it as well. And the AEMC has bought their argument,” Professor Mountain said.

He said no networks have notified market regulators of a need to build significant or expensive infrastructure to handle the rise in household solar exports.

Network charges currently comprise about half of the average household electricity bill.

Customers foot the bill for network upgrades to link into large scale energy generation projects, like the $3 billion transmission link to the Snowy 2.0 hydroelectric project. Dr Mountain argued if the same rule were applied to this project as rooftop solar exports then Snowy 2.0, rather than electricity consumers, would fund transmission links.

He also disagreed with modelling from the AEMC that claimed the average customer with rooftop solar earned $640 a year from exporting to the grid, arguing real export income is typically much lower.

The energy policy director for the Public Interest Advocacy Centre Craig Memery said “cost-reflective pricing reforms”, which have stalled over the past decade, would have helped address the issues currently affecting the grid.

“Those reforms have been resisted, most by ill-informed lobbyists, including some solar proponents, and ironically at the expense of solar owners now facing the second-best option put forward by the AEMC today.”

He said current energy pricing was inequitable as it does not factor in the effects of energy usage patterns. This means people who use large volumes of electricity at periods when the grid is under the most strain don’t pay their fair share for the infrastructure required to support that usage.

“By charging people for exporting power before charging them for peak demand and giving them lower off-peak rates, we are putting the cart before the horse,” he said.

The Public Interest Advocacy Centre campaigns for cost-reflective pricing, which would mean lower network charges for customers who don’t use high powered devices at peak times instead of levying charges to all users at the same rate.

It would also benefit customers who use batteries to store their solar power generated in the day and supply it during peak demand at night.

Mr Memery said new network infrastructure would be needed to handle the rise in rooftop solar supply.

“The cost of exporting energy today is not huge, but it could be in the future. If the network access and cost recovery not addressed soon some people will be locked out from solar altogether – creating haves and have-nots – which would be unfair to those who missed out on solar the first time around.”

Lobby group Energy Consumers Australia welcomed the proposed charges for solar exports but said the rule change must also be tied to another proposal for variable pricing reflecting periods of peak demand.

“What is clear is that the changes proposed open up the opportunity for more consumers to provide electricity to the grid and be rewarded for doing so,” Energy Consumers Australia chief executive Lynne Gallagher said.

The AEMC rule change is open to public consultation until May 13 and a final determination is due in June.

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