SolarQuotes has launched an easy-to-use calculator that estimates how much two-way electricity pricing (aka a “sun tax”) could impact solar power system owners.
As we’ve mentioned previously, “sun tax” is a label that has been incorrectly applied to two-way pricing for solar owners; but it looks like we’re stuck with the term.
It’s not about taxing sunlight – two-way pricing involves sending price signals to solar households; a charge and a reward. The charge side is to encourage more solar energy self- consumption when exports to the grid are high, which usually occurs between the hours of 10am and 2 – 3pm. The reward is for exports to the grid during peak demand in the late afternoons and evenings.
Two-way pricing is separate to feed-in tariffs, but will affect them.
How Much Will The Sun Tax Cost?
It’s likely for most system owners and particularly those without home batteries that a single to double-digit cost annually will impact their feed-in tariff total.
NSW Distributed Network Service Provider (DNSP) Ausgrid has said if an electricity retailer fully passed through Ausgrid’s two-way tariff, a typical solar customer with a 5kW system will see a cost impact of around $6.60 per year.
However, it will vary household to household depending on system size and how much solar electricity is exported during the charge/reward windows.
How To Calculate The Sun Tax
Trying to manually figure out how much it will cost would be a nightmare as you’d need to separate exports at certain times of the day. In Ausgrid’s case, that would be between 10am and 3pm for the charge of 1.2 c/kWh above the free exports threshold (192 kWh to 212 kWh depending on the month), and between 4pm to 9pm for the reward (2.3 cents/kWh).
But SolarQuotes founder Finn Peacock has made the task of estimating the impact really easy with just a few keystrokes and clicks using SQ’s new Sun Tax Calculator – however, you will need an NEM12 file.
What’s An NEM12 File?
Don’t know what an NEM12 file is? Not to worry – you’re not alone, and getting hold of yours shouldn’t be difficult.
If you’ve had solar panels installed in the past few years, or live in Victoria, or have a time-of-use electricity plan, you’ll also have a smart meter. The smart meter collects data on all grid consumption and exports, which is sent to your electricity retailer for billing purposes. This is the information contained in an NEM12 file.
You’ll be able to source this through your DNSP and SolarQuotes has a guide on how to access smart meter NEM12 data.
While it shouldn’t be difficult to obtain, if you don’t have the time or inclination at the moment to get your own NEM12 file, here’s one you can use to test out the sun tax calculator. This is real world data, provided by one of our beta testers. Note that this is based on a pretty big system – 12kW of solar panels with a 10kW inverter; and without a home battery – so lots of exporting activity for the “charge” aspect, offset to some degree by the reward.
Using The Sun Tax Calculator
Having acquired your NEM12 file, there’s not much more you need to do from here. Access the Sun Tax Calculator, enter your postcode and upload the NEM12 data. You can also specify system size and feed-in tariff rate, which is optional – but entering your feed-in tariff rate will give you more detailed results.
Note that while the calculator is only configured for Ausgrid two-way pricing currently, you can still use it to simulate the impact wherever you are. As other networks introduce two-way pricing, the calculator will be updated. For example, Endeavour Energy introduced two-way pricing from the beginning of this month and it shouldn’t be long before we have that in the calculator.
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Update: 8 October 2024. The calculator now includes Endeavour’s rates. So, depending on your postcode this is what you’ll see:
- If you are in Ausgrid’s or Endeavour’s network postcodes, you’ll see your specific charges.
- If your postcode covers both networks, we ask you which network and then you’ll see your specific charges.
- If you are outside of those networks, we show you both sets of charges in the results.
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The calculator’s result will be based on the latest 365 days in your NEM12 file. It will provide an overall total impact, but also separate figures for the charge and reward aspects. Additionally, the calculator will generate a monthly breakdown so you can see the months with the biggest impact. The calculator is particularly handy as it’s unlikely you’ll see a breakdown of two-way tariffs on your electricity bill from retailers choosing to pass it on to you – it will probably just come off your feed-in tariff total.
We hope you find the Sun Tax Calculator useful – and we’d appreciate your feedback, which can be submitted below.
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This looks like a very helpful tool.
It would be nice if you could enter 2 FIT values as there is often a limit of “for the first x kW” then a lower FIT.
Paul, we are on such a plan with AGL in SA, but I doubt that it will continue. Already their feed in tariffs for new comers are woeful.
Such plans are actually widely available, or were last time I looked. The premium rate for the first X kWh roughly covers the daily connection charge.
Dropping it completely would send bills soaring as it’s usually 2 or 3 times the base rate and can comprise half or more of the FiT ‘payment’.
I was estimating a triple digit hit from the Sun Tax – obviously it depends on the ‘tax’ value, but the result via this calculator was slightly less than my guesstimate – roughly $80 in charges, and $10 in bonus payments, so very close to the results from the NEM12 sample courtesy of a beta tester.
While not prohibitive, it is about a fifth of the base FiT payment, a payment which no longer fully covers the usage costs. And since charges usually tend to rise, odds are Ausgrid, Endeavour etc will increase these as and when they can.
So not prohibitive at the moment, but further pressure for people to look at going off grid, unless of course the current spell of cloudy weather becomes more common in which case solar won’t be capable of supplying the power households require. : – \
George, if lots of people go off grid, the power companies will really struggle. It could almost be like a revolution.
At the moment I have a Hybrid inverter and apparently in order to keep the warranty, I have to be connect to the grid for 80%? of the time. I am however contemplating buying a true off grid inverter and another 13kW battery and saying goodbye. i am sick and tired of regualrly and continually searching for the best deals. I am unhappy that the retailers make their plans deliberately difficult to work through. Case in point, one of the Origin plans says x cents for the first x kW, then as per our standard terms and conditions. Why can’t they just add a line to the rate column! Origin are not alone. Some retailers have the FIT as ex GST and the rates inc GST. Unless you look closely, you may get bitten.
The government keeps promoting solar and in my opinion there are many many caveats as to the real benefits and downfalls, that the average person is unaware of.
The other issue with selling anything, is that the more people involved, the more expensive the product becomes.
Governments should buy back the infrastructure and find other ways of managing their budgets.
My NEM12 file from Endeavour Energy contains 5min interval readings, not 30min interval readings. So, the upload doesn’t work as it asks if it is a correct NEM12 file once it does its calculation. I suspect the calculator is looking for 24 readings per day (30min intervals), not 288 readings (5 min intervals).
Something to think about when the Endeavour Energy format is accounted for? I could try and collapse the 5min readings into 30 mins reading and see if it that works?
Er shouldn’t that be 48 readings per day rather than 24 if it’s every half hour? I mean my maths is a little rusty but … 🙂
Hi George,
Yes, realised my typo when I pressed the submit button but was too late to unclick (can’t edit a submitted post like some websites). It should be 48 instead of 24.
Hi Graham, our NEM12 reader supports 5min intervals, so it may be something else with the file.
Please send the file to [email protected] and we can investigate. Thanks!
Hi Trevor,
Sent my file as supplied by Endeavour Energy. Have fun with it.
Rgds,
Graham