While every Australian household was a winner of sorts in the Federal Budget in relation to electricity bills, it’s been claimed those who need the rebate most will benefit the least.
Treasurer Jim Chalmers’ Federal Budget 2024-25 is to deliver $3.5 billion in new energy bill relief. From July 1, all Australian households – including those with solar power systems – will receive an energy rebate of $300; and around one million small businesses will get $350. There’s nothing you’ll need to do – the credits will be applied directly to bills in quarterly instalments.
“The primary focus of our economic plan and Budget is to ease pressure on Australians and put downward pressure on inflation, and our new power bill relief does both,” said Treasurer Chalmers.
The word “inflation” is important, but we’ll get to that in a bit.
WA And QLD Rebate Double-Dip
If winners are grinners, Queensland and Western Australian households may have a wider smile. Early this month we reported Queensland households (also including those with solar panels) will receive a $1,000 – $1,372 rebate on their electricity bills from July this year. Small businesses will get $325. Quite fittingly, the $2.5 billion price tag for Queensland’s splurge will be paid for with coal royalties.
Commenting on the new federal rebate, Queensland Minister for Energy and Clean Economy Jobs Mick de Brenni said:
“Additional electricity rebates mean most households won’t need to pay another electricity bill this year, reaffirming Labor’s commitment to supporting households with cost-of-living relief.”
Across in Western Australia, the Cook Labor Government allocated $400 in power bill relief to both households (again, solar homes included) and small businesses in last week’s State Budget.
“Every household in the State will now receive at least $700 in electricity credits, while 90,000 small businesses will have $725 knocked off their energy bills next financial year,” said WA Treasurer Rita Saffioti.
Not Everyone Is Happy
One of the most common gripes about the rebates is the lack of means-testing – why should the well-off get this? According to Treasurer Chalmers, it’s about simplicity. He says it would be a complex task to separate the battlers from the well-to-do for the purpose of issuing the rebate.
Another issue that has emerged harks back to Treasurer Chalmers’ comments about putting downward pressure on inflation. A sting in the tail of this could be lower welfare indexation according to this ABC report, eroding the benefits for welfare recipients. Headline CPI (Consumer Price Index) numbers directly determine how much welfare payments are indexed every six months. Meanwhile, any inflation reduction from the rebates may make little difference to the likelihood of interest rate cuts as the Reserve Bank doesn’t focus on headline CPI.
Beyond Power Bill Band-Aids
While (just about) everyone likes free money – or credits in this case – there’s no guarantee there will be more of the same. Perhaps more attention needs to be paid to getting solar panels on homes of those struggling – owner occupiers and renters, stand-alone and multiple occupant properties alike. While Australian home solar uptake is still occurring at a rapid clip, plenty of naked rooftops remain.
“The budget’s investments in renewable energy are welcome and critical if we are to address the climate crisis,” says the Australian Council of Social Services. “However, we also needed to see similar investment to support people on the lowest incomes to transition to renewables, including having rooftop solar on their homes.”
Recent analysis commissioned by ACOSS indicates Australians on low incomes could save up to nearly $6,000 annually on their home energy bills through thermal efficiency upgrades, electrification and rooftop solar panels.
There have been some state incentives around this. For example, NSW’s Solar For Low Income Households program offered free 3kW solar systems in exchange for participants agreeing to forfeit the Low Income Household Rebate for ten years. Unfortunately, applications for the rebate swap for solar offer closed in early April.
While welcoming the federal electricity bill rebate, Energy Consumers Australia says we need to treat not just the symptoms but the cause of the growing energy divide; so all Australians have energy efficient homes and can benefit from low-cost renewables.
“Our Stepping Up report shows that the households that will benefit the most from the energy transition will be those that electrify their heating, cooking and transport and have energy efficient homes,” said ECA CEO Brendan French. “Those who remain on fossil fuels will face escalating bills. We must ensure that no Australians are left behind in the energy transition.”
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How do off grid households get the $300 rebate?
It’s automatically credited every 1/4 on you’re bill. the amount rebated dived by 4
Go on grid. You can’t get a power rebate unless you’re ‘eligible’ for a power bill.
How do you go on grid ina remote area. To connect electricity to my property would cost $15.000.
How do you go on grid?
Everything I have read about the rebate states on grid only, even though they state “every household”
Off grid do not have energy bills but on cloudy days or lots of usage, a generator is needed and fuel is expensive. Not really fair.
If this payment is in fact applied as a rebate as an atypical electricity consumer with very minimal bills it will act as an incentive for me to consume more and disregard peak tariffs for convenience. It will be easier and no more expensive for me to not bother about managing the quantity and time of use or self consumption of PV electricity and it makes the value of my bill comparison app questionable.
Be interesting to see how retailers react to solar customers who like me are mostly in credit each month/quarter anyway and request refunds of Qld & federal Govt rebates.
It has been difficult to get a refund paid as they claim it is only to offset power cost even falsely saying that it’s govt directive not to refund.
Even after advancing arguments that rather than offsetting power bills it offsets the initial cost of the solar system and its maintenance to generate power to the grid they fail to be impressed..
Finally they reluctantly agree to refund after threatening to go to Energy Ombudsman
It is really annoying when you need to go through this process multiple times.
Hi John,
You shouldn’t have any problem getting a retailer to pay up. It’s just like if you overpay on an estimated bill. Let us know if you have details.
My retailer (Ergon) refuse to pay up even though with solar and battery I am in credit each month. They claim the government says that it can only be used to offset a (non existent) power cost.
I’ll likely have no power bill for the next 12 months. I’m pretty sure that I don’t need it and that money could be deployed for better outcomes.
There is no mention in this story about the decrease in payments that pensioners will get.
Last year we were given a S500.00 rebate ($125.00 a quarter). This year that has dropped to $300.00 ($75.00 a quarter) the same as everyone else.
A drop of $200.00 ($50.00 a quarter).
Cheers…Roger
Good afternoon folks – I’m confused !
On the one hand it seems as though there is a push to install a plethora of solar panels (both domestically and commercially), no doubt with a view of increasing the electricity to the grid, and yet I read in your articles, today and in recent issues, of the authorities wishing to ‘regulate’ the flow of electricity, and in so doing reducing the FITs to households. That scenario surely doesn’t make sense!
For my part, the FITs are the only part of the solar panel/power generation that makes any sense. In m y view, a higher FIT is the ONLY way to generate funds to hit a breakeven on the costs of the panels, inverters and batteries. Surely the reduction or restriction of the FIT values at periods of the day only militates against the reason why consumers would want to engage with solar technology. I’m not a particularly ‘green’ person, but I like the idea of reducing my power bills via FITs and at the same time doing something for the environment. My system is 7 years old, and in that time I have only paid 6 or 7 power bills, my system generating sufficient electricity to keep my account in credit for most of the time.
I get concerned when I read of moves to restrict/reduce electricity to the grid, with the possibility of reduction in FITs, as this destroys the cash flows leading to an eventual breakeven on cost.
Have I missed something ? If not, then it confirms my thinking that the whole solar/renewables proposals really are a croc…………, with changes on changes merely complicating a workable system, or is the success of roof top solar, now acting to strangle its future?
My system is 23 solar panels, with 5 Enphase batteries, and I’m concerned this configuration may not now be optimal to meet the gateways placed on me in generating ‘clean power’, which I suspect will be to my detriment.
Further, I am concerned about the move (apparently) to move consumers to a flat form of tariffs, as this will decimate my FITs of 20 cents.
Hi Peter,
I’m glad you have a heap of solar, and batteries too, with some smart management they’ll serve you well.
The fundamental point about solar is that you generate your own energy and use it in house, the utility meter doesn’t turn because the energy is both created and used “behind the meter”
Your return on investment is based on the fact you don’t buy electricity in, especially at expensive times of day.
Going forward, there will be times where the right retail plan will pay you to consume and pay you to export, all depending on the market price or time of day.
Feed in tariffs and consumption tariffs are all subject to change… but the latest round of pearl clutching about 2 way tariffs is really just a step on the path.
https://www.solarquotes.com.au/blog/stealing-electricity/
https://www.solarquotes.com.au/blog/electromobile-renewable-future/
Good afternoon Anthony and thank you for your response to my query.
I concur with your comments about savings being generated by not buying from the grid, however the breakeven equation uses all income and all expenditure to calculate the BE value. On this basis the FIT is one of the income streams which needs to be recognised. The point of my article was to suggest that if The energy Minister’s proposal to flatten the tariffs and have ‘all’ consumers tied to the ‘market offer’ then people like me would be disadvantaged as no doubt my 20cents FIT would be reduced to say 6 cents. I believe my solar system runs fairly efficiently, such that over the 6 years of its life I have only paid a handful of bills to the supplier, largely because of the advantage I have with my FIT (20 v’s 6) cents.
I concede my political colour is far from ‘red’ and it concerns me this government wants us all to be on ‘THE’ market offer, rather than consumers being able to pick and choose from the offerings of the power suppliers
It seems to me, their approach is so far removed form a ‘working’ market scenario, reducing us (-and our Country) to the lowest common denominator.
That’s appalling!
Kind regards
Peter Cummins
This “cost of living” energy rebate sends totally the wrong message. People should be encouraged to take measures to reduce energy use, having someone else pay the bill (or part thereof) will, more likely, lead to increased use. This especially applies to many who have spent money on solar installations/batteries and currently receive minimal, or zero, electricity bills. With no income limit, many of us who do not need this rebate will receive it anyway. Cost-of-living assistance should be targeted at low-income earners who do need help. Treasurer Chalmers says this is too difficult as the energy companies don’t know customers’ incomes, but, if it was decoupled from energy use and the tax office issued payments it would seem easy enough.