Aussies with solar panels may soon be charged by power companies for exporting electricity to the grid, following new reforms introduced by the Australian Energy Market Commission (AEMC).
Under the controversial new rules, solar customers can be charged for sending power back to the grid when it is not needed, but rewarded for exporting it during peak periods.
The reforms follow concerns from industry bodies as well as consumer and environmental groups that without immediate action, the energy grid will not be able to handle the volume of solar exports forecasted over the next decade.
Australia currently has one of the fastest rates for small-scale solar uptake in the world and these reforms will put the grid into the best possible position for future solar energy generation, AEMC Chief Executive Benn Barr explained.
“This is about getting ahead of the curve and preparing the grid for change that is happening now and only going to accelerate over the next 10 years,” Mr Barr said.
“Getting this right means adapting the grid to handle more solar in a smart way that keeps costs down, keeps significant financial benefits for those who choose to go solar and saves money on electricity bills for those who don’t or can’t. Getting it wrong means less clean energy in the system and existing and future solar and battery customers miss out.”
Additionally, power networks will also be prevented from placing a blanket ban on customers sending solar back to the grid – an issue which is currently occurring in South Australia and Victoria.
The Australian Energy Regulator (AER) will be responsible for the development of this solar exports pricing framework for power networks.
Pricing and network plans for solar customers are currently under deliberation by the AER. New pricing for solar customers is not expected to come into effect until July 2025.
This new pricing proposal was originally scrutinised by solar owners and companies, who claimed it was a ‘sun tax’. These concerns were taken into consideration during the finalisation of this reform, with the AEMC claiming it has ‘tightened protections for consumers.
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Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Ausgrid network in Sydney but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on the Energex network in Brisbane but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
Here are some of the cheapest solar-specific deals from the retailers on our database. These costs are based on SA Power network in Adelaide but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest price first. Annual price estimates assume general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Price estimates exclude solar feed-in tariff credits. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.
What does this mean for solar customers?
Once pricing is deliberated by the AER, solar customers can expect that the solar feed-in tariff structure will likely to be adapted to a more flexible pricing structure.
This pricing structure will reward customers who store their solar exports and send it back at certain times of the day, like during peak demand periods. But it will also charge customers for sending electricity back when it isn’t needed. These charges will likely be added to or removed from the entire bill at the end of the month or quarter.
A free service will also be included though for customers who are concerned about being charged for exporting excess power. The free service however, won’t prevent households from sending any leftover energy back, but simply remove the financial reward or penalty for doing so.
In order to participate in this new system effectively though, solar customers will need to have access to an energy storage system, such as an electric vehicle (EV) or solar battery. With access to one of these storage systems, households will be able to store their excess solar to either send back at appropriate times or for their own personal use.
It is hoped that these reforms can encourage households and businesses to utilise these storage systems and be smarter with their solar consumption, generation and exports, AEMC Chair Anna Collyer said.
“By carving a path for smart solar, batteries and electric vehicles, more solar can be used, we will keep costs down for all consumers and protect the value of household solar investments already made,” she said. “We don’t want to see solar going to waste. That costs everyone more because less cheap renewable energy gets into the system.”
Despite the added charge, AEMC modelling shows that even in the worst-case scenario, solar customers can still earn about 90 per cent of what they do in the current system.
Currently, solar customers are paid for the solar exports they send to the grid.
What are the smart solar reforms?
These ‘smart solar’ reforms were designed to help inject more clean energy into the grid by boosting more small-scale solar energy generation and support the uptake of solar batteries and EVs.
It’s anticipated to be a long-term solution for solar energy generation for networks, as well as provide some relief for electricity prices and reduce carbon emissions in the energy sector, Ms Collyer explained.
“These new measures to drive smart solar are fundamental to enabling a modern electricity grid that delivers out to 2030 and beyond,” she said. “They represent a profound change to the way poles and wires businesses must think about how they manage their network and turn the current one-way street delivering power to people’s homes into a two-way super-highway where energy flows in both directions. Power network companies will need to deliver services to support solar – and they’ll be judged on their performance on how much solar exports they allow into the grid.”
What is the AEMC?
The Australian Energy Market Commission is an independent statutory body that is responsible for developing Australia’s energy markets under national electricity and gas laws. The AEMC makes and amends rules for the National Energy Market, as well as elements of the natural gas market and retail energy market.
Image credit: Martin Henke/Shutterstock.com
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