Draft guidelines for solar export tariffs – a potential charge for exporting electricity into the grid – have been released for comment; and no doubt there will be plenty.
Solar export tariffs have been brewing for a while, so first a brief summary of the saga to date.
Australia’s electricity grid was originally designed for electricity flowing into premises, not out from them. But the latter has been increasingly happening as households and businesses across the country install solar panels. One of the motivators aside from the solar rebate that reduces the upfront cost of systems has been availability of feed-in tariffs, which provide a credit for surplus solar energy exported to the mains grid.
There is so much PV capacity in some parts of the National Electricity Market (NEM1), the congestion caused by all this solar energy goodness – particularly around late morning to early afternoon – is causing some headaches; threatening the stability of local networks.
In some situations, new solar owners have been hit with stingy export limits or are zero export limited. Thankfully tech smarts and tweaks being implemented means this isn’t as prevalent now, but more needs to be done to cater for more systems.
There are a couple of fixes, including increased spending on infrastructure. But this is not only expensive, and everyone will still ultimately pay, the extra capacity is only usually needed at certain times of the day.
The other approach is to provide pricing signals to solar owners when they should self-consume more of their solar energy2, but also for exporting energy to the grid when it’s needed.
One of the signals to self-consume is to introduce a charge on exports under certain circumstances. And once that idea was floated, cries of “SUN TAX!” soon followed.
Solar owners were justified in being concerned – after all they’ve made a significant investment – but there was a fair bit of misinformation that followed, which the Australian Energy Market Commission attempted to address last year.
What’s Happened Since With Export Tariffs?
To this point, NEM Distributed Network Service Providers (DNSPs) have been banned from whacking a surcharge on exports, but that changed in principle in August last year with the AEMC’s tweaks to National Electricity Rules and National Energy Retail Rules, a summary of which can be found here.
However, the ability for DNSPs to integrate two-way pricing isn’t going to happen straight away. Existing solar owners cannot be put on export pricing until 2025 at the earliest. And there are expectations that two-way pricing will very much be a two-way street, with benefits for both parties.
The Australian Energy Regulator was tasked to develop Export Tariff Guidelines on two-way pricing that would cover issues such as:
- customer protections
- potential structure of proposals
- a process for approving or not approving proposals
- expectations of networks with regard to community consultation
.. and very importantly, a basic export level (free export service) that must accompany any two-way pricing proposals.
On Wednesday, the AER released its Draft Guidelines for feedback.
There’s a lot to unpack and I haven’t read it thoroughly, but here are a few highlights:
- Enabling two-way pricing will not necessarily mean rooftop solar power system owners will be forced to pay to export solar electricity at all times, or at all.
- Any proposal to implement an export charge will have to pass a pretty tough AER pub test, which will include public submissions.
- The AER will encourage distributors to undertake tariff trials, to test new tariff structures and customer or third-party responses.
- DNSPs will have to justify charges; e.g. only if solar exports are contributing to increased network costs – and show how they calculated these charges.
- Charges must only recover costs associated with providing the export service, and historical costs associated with providing a network’s intrinsic hosting capacity should not be recovered through export charges, as these are being covered by consumption charges.
- There would need to be meaningful engagement by DNSPs with customers – and not just solar owners.
- Significant lead-up time would be required before new two-way pricing options could be introduced by a distributor, and a transition strategy in place clearly demonstrating how the distributor will take into account the impact on customers.
- A distributor will have to offer a basic solar export service up to a defined export threshold (to be determined according to circumstances), at no charge.
- The same distributor may also offer a “premium” export service offering a higher export threshold or no threshold, for a defined price.
- A charge could only apply at times when exported power is likely to drive future network investment. A “negative” charge (rebate/credit) in addition to any existing feed-in tariffs would be applied when the network would benefit from increased exported solar power.
- Any two-way pricing proposals will not take effect until 2025 at the earliest in most NEM states – it will be the following year for solar owners in Victoria.
Further information: Draft Export Tariff Guidelines | Explanatory statement
Feedback on both documents is open until March 8, 2022 and the final Export Tariff Guidelines are due to be published in May 2022.
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Considering these export charges are likely coming, is there any way to “turn off” exporting during those periods?
I know if i were to be charged i would like some kind of option to turn off exporting rather then be charged for it. I do not believe i can do this with my current system without turning it off completely.
I thought Smart inverters were being created that would be solving this problem by sending signals out to stop exporting at these times.
And what about the giant batteries and pumped hydro being added to the grid, shouldn’t these be sucking up the surplus at these times, rather then wasting it by turning it off. I can also see a scenario were electricity companies convince the government that we have to pay to export our surplus to charge their batteries and then they get to charge us again when they export it back to us at night.
1. It is likely that you won’t have to pay for exporting during congested periods, you may just get your FiT reduced during those times.
2. But if you want to stop exporting, most modern inverters – when paired with a consumption meter – can be easily commanded to temporarily stop exporting.
Finn, can solar owners afford a reduced FiT though? Currently you have to export roughly 4kWh for every 1kWh you import, with most of this exporting being done during the middle of the day i.e. likely when it’s congested.
(For SA it might be more like 6:1 given power is ~50% more expensive)
I’m aware SQ argue solar value shouldn’t be limited to just FiT, that own use may offer more benefit, but if you’re not a retiree, unemployed, stay-at-home mother etc then you’re not likely to be at home to benefit and thus FiT is more important. Conversely if you opt for a large system i.e. 10kW+, unless you use a lot of high energy appliances, then exports\FiTs will be of greater value than the self consumption component.
Note: Ronald has previously said FiTs should rise for most in July, but didn’t elaborate on why. Perhaps less production\congestion during winter and thus higher rates offered to those signing up then?
George Kaplan says:
“(For SA it might be more like 6:1 given power is ~50% more expensive)”
I’m in SA and still at 4:1
I’m also at home during the day and I can’t for the life of me figure out what I’m supposed to turn on for self consumption. I don’t have a pewl or an EV.
A Canstar Blue article has SA electricity at about 32c/kWh as compared to other states which retail it for about 20c/kWh. Based on Wattever a lot of plans have conditions – either capping daily exports to 10 kWh or much less for the higher FiT, others limiting system or inverter size. If you don’t meet those requirements, or export more than the limit, you only get 5-6c/kWh.
As for what to turn on for self consumption (the opposite of what’s usually desired), and based on monitoring here, AC is potentially your biggest energy draw. Alternatively look at ‘cooking’ options. A jug will draw about 2kW when boiling water, while stoves, ovens, and even microwaves will spike your power usage at least a kW or 2. If you have a huge plasma screen that might suck up power as well – though from what I can tell computers and ‘small screens’ tend not to. Oh almost overlooked dishwashers – they can draw a fair amount whilst working too. And of course there’s the hot water tank which can draw oh 3 or 4 kW whilst heating, and likely kicks in twice a day – more if you drain it.
https://www.canstarblue.com.au/electricity/the-most-energy-draining-appliances-in-your-home/
Apart from charging my EV to absorb excess solar, I delay charging my house battery until midday and delay running my hot water heat pump until 1.00 pm. A dishwasher can also be run during peak production times.
I recently changed my provider from Origin to AGL. I used information from your website and AER which indicated I could obtain a fixed c/kWhr charge and a FIT of 12c/kWh. However upon acceptance of the offer I was placed on a TOU tariff and despite all my efforts I was told take it or leave it. I reluctantly accepted. All manner of excuses were offered by AGL including SAPN made the rules etc. Is it inevitable that ALL consumer exporters of electricity will have to accept a TOU tariff ?
It seems every grid wants to limit flow but none of them wants to pay for it. I saw this funny stories about limiting new inverters by “the Internet” and so on. It is all BS really. There is DRED interface, mandatory. So, why grids don’t use them? Ah, too expensive, they would have to make controllers, pay for 3G communication and so on. Why not to simply charge PV owners instead?
I’m not against floating price, for both ingress and egress. Problem is, I would have to know BEFORE it happens. That means for these 30 minutes cycles I need signaling BEFORE they start. Best if I knew 30 minutes ahead what would be next cycle price. Then, I would be able to make informed decisions and not only turn my export off when price is negative, but also turn whole inverter off and turn oven, aircon and whatever else I could to get paid to waste electricity.
Further to that thee is a problem with installers. I am looking at installing battery and in my case it is pretty much PW2 or nothing. I started looking at quotes and talking to installers about DRED which I want to have exposed for my own controllers. There are times when I get paid several dollars per kWh, ideal time to actually discharge whole PW2 but the only way I would be able to trigger it is DRED.
Somehow no installer understood my need to signal PW2 by DRED.
My PV inverter also has DRED and of course not connected, I would have to add cable and controller myself. While it does support limits with no DRED in 100W granularity, somehow it is not supported in any official enduser app and even worse modbus over UDP dows not support that feature too (while does support a lot in fact).
From where we are and with current cleverness in installers, we need 20 years to make our systems easily capable to run with variable capacity and so far all the standards are made for PR and are abandoned shortly after press conference.
I won’t agree for any variable pricing unless I am told price upfront what means API I can read.
I had a similar experience but managed to catch it before I signed up. The company is fully aware of TOU regions (Ausgrid) but falsely advertises high FITs to induce new customers to change to them.
I’d be thinking the ACCC should stop having long lunches and get back to the office to work on stopping this dishonesty. It would take a 10 minute phone call methinks, but I won’t hold my breath.
I am in NSW/Ausgrid having seasonal ToU. I saw in other states ToU happens to be not so good, however, from my last January invoice for 23/Dec-22/Jan
I pay:
Peak 54.57c
Shoulder 2.88
Off peak 14.79
The above could be cheaper if I didn’t want high FiT (16c).
So, this is how much I use:
Peak 14.79kWh
Shoulder 68.83
Off peak 284.5 kWh
Now, flat would be around 29c. What would I use flat?!
On top of that:
March, April, September, October – there is no peak time so all prices are lower than flat. Winter (June,July,August) have shifted peak so that I use 4-5kWh daily but only these months.
No battery so far.
So, why so many want to have more expensive flat?
Shoulder 23.88c
You may want to have a look at Dodo for your electricity. I left the big retailer for Dodo and have not paid for electricity since. A really good plan which works for my 10 kW system. I also get a money sent to me on top of that with the exception of the winter quarter.
The best thing about the above provider is they have gotten around Ausgrid’s attempt to force consumers onto plans which do not suit their needs. Again where is the ACCC????
Wayne S
It’s amazing that feed in tariffs are so low with the excuse that the infrastructure is unable to handle feed in. In NSW, the suppliers used the excuse of ‘Gold Plating’ the infrastructure to justify increases in electricity charges. It’s clear that this ‘Gold Plating’ came without any view of what the real future, of solar imports, was not considered.
The claim was ‘poles and wires’, not that I ever saw any evidence of that. The ACCC should be doing some work into where the money really went, but as usual no statements from this organisation.
The more recent debate around FIT revolves around solar users being held responsible rather than Coalition governments accepting the blame for the results of ignoring the emerging solar industry and refusing to adapt networks to deal with the exponential growth in uptake experienced.
I had over voltage issues some years back and had to solve my own problem by going to a 3 phase inverter and pushing the network provider into lowering the line voltage which was way too high anyway. That required the help of the Ombudsman but eventually the bleeding obvious was done, with no big deal to local customers and improvement for any solar exporters around.
This is a national problem which is/will affect us all. It requires genuine government which acts for us all rather than their coal donors. The only way out I can see in the absence of government doing its job is to either change the government or alternatively install batteries, expensive or not.
Um non Coalition govts were in the States for most of the decade! You must have miskeyed given States influence in the NEM
I beg to differ.
NSW has had a Coalition government for many years now. Its their problem.
At a national level we’ve had a Coalition government for 3 election cycles. That’s the government which threw everything it had at the emerging renewables industry to shut it down. That’s where this buck stops because it should have done something to avoid the coming train wreck. Instead it sat back waiting out the inevitable. So now they talk about turning off solar generation in the middle of the day because the government has supported the coal industry rather than the unavoidable future.
Beg to differ – Qld, Vic, SA, WA have predominantly had ALP governments over past 15 yrs! From my experience, little discouragement happen re solar and wind at federal level – look at federal legislation re offshore wind farms!
AGREE TOTALLY
Jorge
We pay absorbitant Supply charges thats meant to go to maintaining the system !!!! Where does the money go?
I am on the AusNet line on average the company pays 0.56 cents for supplies and we have to pay for the same thing to our suppliers over $1
(i PAY $1.1880) AND THEN if you have solar We have to pay .34 cents atleast for the power and non solar people pay around .25 cents
at the moment I am very lucky and i am getting .15 per Kwh exported
But then they sell it to us for .34 cents
This are just excuses to make bigger profits at our expense
These companies make big money on us and they want to make more!!!!!!!
There’s a case to be made for GETTING A BATTERY. That’ll stop them in their tracks.
I DO HAVE A BATTERY and still sent to the greed on averae 45kwhs per day
Is there anything I can do, if I’m stuck in an area with 0kw export limits?
It is a sad day for all Solar Roof Holders if this Solar Export Tariff kicks in. Although the draft report suggest the annual fee will be about $6.60 but still all homes connected to the Grid pay a day supply charge of 90cent to $1.10 plus GST day which equates to $365.00 per annum.
The Census usual resident population of New South Wales in 2021 was 8,072,163, living in 3,364,777 dwellings with an average household size of 2.57.
If there are 3,364,777 dwellings then x $365.00 per annum = $1,228,143,605.00 (billion Dollars).
These $1.2billion (NSW) can easily create multiple battery solar storage facilities in NSW leaving aside what other States revenues from the daily charges. However the $1.2billion generated in NSW does not upgrade any NSW Grid.
Not only we get 12c to 7c for export but in night we are paying 34c to buyback our solar energy. More revenue for Suppliers.
Peter Dutton in his 2024 Budget Reply indicated going nuclear to save the expense of upgrading the grid. The nuclear station to be constructed on the current Coal Power Stations which will decommission shortly. I will vote Liberal Next Year.
Kind regards
Ronnal Sharma
Rooftop Solar panel owners are punished for owning a Solar Roof Panels.
Ronnal Sharma you’ll find nuclear in any shape or form is the most expensive new build capacity bar none, even if it wasn’t made illegal by the Liberals so many years ago.
Dutton is pushing nukes (after doing nothing about them for 9+ years in power) simply because talking about them will delay action and investment, and it’s action that damages the incumbent fossil miners and the steam engines they own.
Search for Vogtle, Okiluto, Flamanville & Hinkley Point C if you want evidence of how stupendous the cost and ridiculous the lead times are for nuclear in an advanced western democracy and remember these are all nations with existing onshore industry and expertise, none of which Australia has.
Hi Anthony,
The reason going nuclear is best for our economy as per Peter Dutton’s Budget Reply 2024 which are as follow:
“Regional communities and farms will be carpeted with up to 28,000 kilometres of new high voltage transmission lines.
Meanwhile, Canada, France, Japan, South Korea, the UK and the US are all investing in next generation, zero-emission nuclear Small Modular Reactors.
They are doing this to shore-up energy security and to meet their zero emissions targets.
The UK plans to triple the size of its nuclear generation by 2050.
The imperative to create affordable, reliable, and emissions-free energy is why the Coalition is seeking an intelligent conversation on the role these new-age nuclear technologies could play in the energy mix.
Our roof top solar does not support our industrial or manufacturing sector. Small and major industrial scale manufacturing industry will not be able to operate through solar and why Roof Top Solar Panel Holders penalised for export tariff if we are supporting the economy and environment.
Also what has happened with $1.2 billion NSW daily charges over the years? Neither the Govt nor the Energy Suppliers will provide that Information.
The $300.00 electricity rebate Fed Govt is giving is our own daily supply fee that we pay to be connected. This is Indian Giver Fed Govt. They are not giving any tax relief from their own pocket.
Kind regards
Ronnal
Hi Ronal,
I’m glad you’ve raised a political point, as at heart the wort illiterate is the political illiterate. To that end I’m compelled to explain Mr Dutton’s stock in trade is Fear, Uncertainty and Doubt. Spreading that sort of thing isn’t what we do at SolarQuotes.
The LNP have a dismal record on climate and energy. They’re disingenuous and have done incalculable damage already. Talking about nuclear is just another pointless tactic to open a different front on the mind numbingly stup!d climate wars we’ve endured for the last 20 years
We all need to be better informed, and make better choices, not just devolve to tribalism and three word slogans. I have a few bookmarks on hand so please have a read here
Thanks
The 2021-22 report confirms past years’ findings that wind and solar are the cheapest source of electricity generation and storage in Australia, even when considering additional integration costs arising due to the variable output of renewables, such as energy storage and transmission.
https://www.csiro.au/en/news/News-releases/2022/GenCost-2022?fbclid=IwAR2hwicNwOB9Qz5Nt2OeE-zIg6_kxzh51J88T5vkfQ73M_I8DI3o8MpQKJQ
The NEM is arguably broken and not fit for purpose.
https://m.youtube.com/watch?v=NqfBXaWuu-o
Hi Anthony,
Lets not get out of the topic “Solar Export Tariff Draft Guidelines Released”
My simple message is we roof solar panel owners are worst of. What will happen after 2030 when there is no incentive of discount on installing solar roof panels. What will you do to replace a solar roof panel – will you pay from your pocket the 100% replace costs or look for some assistance which is not available after 2030 and you might get only 1cent per kilo watt on export and pay 5cents on export tariff.
Kind regards
Ronnal
Hi Ronnal,
Really you’re not worse off, not by much anyway, because solar is driving TOU power pricing, daytime electricity prices are lower for all customers.
The 1.2c export tariff is charged by the DNSP to your retailer, who may not even pass it through. What’s more interesting is that FIT is going up by more than twice the amount, so if you have yield to spare from West facing or stored solar in a battery.
The main benefit for solar owners is that you generate your own energy behind the meter and that’s not changing at all.
And that benefit can’t be taken away.
We have an explainer fresh off the press here : https://www.solarquotes.com.au/blog/beat-solar-export-tariffs/