‘Sun Tax’ to Hit Solar Customers in NSW and ACT
24 February 2023: ‘Sun Tax’ to Hit Solar Customers in NSW and ACT
Distribution network companies in New South Wales and the ACT are moving forward with plans to charge solar owners for feeding electricity into the grid during the middle of the day.
Proposals by Ausgrid, Essential Energy, Endeavour Energy and Evoenergy recently released by the Australian Energy Regulator (AER) show the companies plan to introduce charges ranging from 0.94 c/KWh to 3.6c/KWh for solar homes that export above limits set by each network.
Consumer group Solar Citizens opposes the charges, stating the ‘sun tax’ would likely increase electricity bills for homes and businesses with solar systems larger than 3 kW. They estimate the initial charges could amount to bill increases of more than $30 dollars per year for a household with a 5kW solar system.
“Before enforcing any extra charges, the network companies are meant to prove to the Australian Energy Regulator that charging solar owners is necessary to address grid congestion. But in the applications just released, their arguments have more holes than swiss cheese,” said Stephanie Gray, Deputy Director of Solar Citizens.
“Ausgrid’s own data shows that the vast majority of their network can accommodate more rooftop solar, but they want to start slugging people now because by the end of the decade there might be grid issues that arise. That’s not good enough.
“An extra $30 per year might not sound like much, but that’s just the starting point. These charges are likely to go up over time and for many families and businesses struggling with the rising cost of living it’s the last thing they need.”
In 2021, the Australian Energy Market Commission (AEMC) changed the electricity laws so that network companies could charge solar customers for feeding electricity to the grid. Under the new rules solar owners can face charges if they export more than the limit set by their network. In the new proposals the distribution network providers are also offering a reward if people can export in the late afternoon.
“The network companies pushed for the ability to charge solar owners in the name of fairness for customers without solar, but Ausgrid’s own documents show that non-solar customers will only be about $1 better off per year after these charges come into effect,” said Ms Gray.
“The other justification for these charges is to encourage solar owners to use more electricity during the day and export solar in the evening. But how many working families will be able to shift their main electricity use to the middle of the day and afford a battery so they can export at night?
“The State Government had an opportunity to stop these charges from being implemented and they sat on their hands. Now it falls to the Australian Energy Regulator to clamp down on these unfair charges before they see the light of day.
“The NSW Government may have been slow to act, but there’s still time for them to act in the face of a worsening cost of living crisis. We’re calling on them and the Labor Opposition to support the rollout of battery storage to alleviate any grid issues and help solar households protect themselves from getting slugged.”
Summary of charges by NSW Distributed Network Service Providers
Distributed Network Service Providers are trying to introduce a solar export charge alongside price signals encouraging solar customers to export power in the evening.
Their justification for this is firstly to encourage battery update to alleviate grid stress that’s emerging in some areas during the middle of the day. However, as can be seen below the ‘rewards’ for exporting at night are too small to encourage battery uptake as it would still be more economical for battery owners to use their own stored power and save on electricity tariffs.
Secondly, these charges are being implemented in the name of fairness for non-solar customers, but as mentioned above the financial benefits to non-solar customers are insignificant.
|
Distributor |
Basic Export Level (BEL) |
Charging Windows |
Export charge and rewards |
|
Evoenergy |
5 kW basic export level., i.e., all exports above 5 kW in a single hour will be subject to an export charge. |
Export charge window applies only to exports above 5 kW, measured hourly between 11am and 3pm Export reward applies to all energy exported between 5pm-8pm daily. |
Export charge of 1.642 c/kW to apply only to exports above 5kW between 11am-3pm Export reward of 4.926 c/kWh |
|
Ausgrid |
2500kWh / year. Applied in retailer billing as 6.85 kWh per number of days in the billing period. |
Export charge applies only to energy exported between 10am – 3pm that exceeds the BEL for the billing period. Export reward applies to all energy exported between 4pm-9pm daily. |
Export charge: 1.18c/kWh Export reward: 2.19 c/kWh |
|
Endeavour Energy |
2kW / month |
Export charge window: 10am – 2pm Export reward window (seasonal): 4pm-8pm |
Export charge: 3.6 c/kW Export reward: 11.03 c/kWh Export reward: 3.336 c/kWh |
|
Essential Energy |
1.5kW / month |
Export charge window: 10am – 3pm Export reward window: 5pm-8pm |
Export charge: 0.94 c/KWh Residential Export reward: 13.67 c/kWH |
