Sun tax could trigger network ‘death spiral’ - Solar Citizens

Sun tax could trigger network ‘death spiral’

12 May 2021: Sun tax could trigger network ‘death spiral’

A survey of more than 1,300 Australian solar owners raises concerns about the possibility that a ‘death spiral’ could be triggered in the country’s largest electricity grid.

In response to the proposed introduction of a ‘sun tax’, which would see solar homes and businesses being charged for exporting clean electricity to the grid, community group Solar Citizens surveyed rooftop solar owners across the country to understand their response. 

A massive 63 per cent of those polled said that they would be more likely to go off grid if the sun tax is implemented, pointing to the possibility of a network ‘death spiral’.

A ‘death spiral’ is triggered when more and more households go off grid, resulting in higher network charges for customers remaining connected to the grid. This price hike can then in turn result in more households leaving the network, which causes the spiral to continue. 

The poll also found that 65 per cent of solar owners would consider changing their vote depending on the actions taken by their state government in response to the proposal.

“The results of our survey indicate that solar households are upset about the proposed sun tax and are willing to take matters into their own hands,” said Ellen Roberts, National Director at Solar Citizens. 

“It’s hardly surprising that solar owners are concerned. The big network companies are failing to manage grid voltage and now they want to pass the bill to everyday Australians.

“We know that grid voltages are too high even at night, so it’s time to stop blaming Australians who have made an investment in solar.

“Ninety five per cent of solar owners we polled didn’t support the sun tax, so it’s time for state governments to use their power and rule out these changes. “Already we’ve seen the Queensland and Victorian governments indicate they don’t support slugging solar households, so now we need to see states like New South Wales and South Australia also step up.”

This poll comes after the Australian Energy Market Commision (AEMC) released a draft determination proposing a rule change that will allow rooftop solar owners to be charged for exporting solar energy to the grid. The AEMC estimates that households across the National Electricity Market (NEM) will lose up to 8 per cent of their export income under the new rules.

State and territory governments in the NEM can choose to opt out of the rules. 

“It’s in the best interest of everyone for rooftop solar to keep thriving. Solar homes and businesses provide cheap local energy to the grid which drives down the wholesale price of electricity,” said Ms Roberts.


Summary of survey findings:

  • 63% said they’d consider going off grid if this rule change is implemented.

  • 95% were not in favour of the sun tax.

  • 65% said the way their state governments responded to this would influence their vote. 

Media contact: Ellen Roberts 0408 583 694