Calculate How Much A “Sun Tax” Might Affect You

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.

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.