Solar power tax to boost energy grid gains backing of consumer advocate

Controversial changes to allow energy networks to charge solar panel owners for sending surplus power back to the grid have gained the backing of a key consumer group ahead of a final ruling within weeks.

The federal energy rule-making body says the reforms are needed to fund investment and unblock electricity “traffic jams” created by the influx of solar power from rooftops back into an electricity grid currently designed to cope with one-way power flow.

A key consumer advocate is backing a proposed tariff on supply of household rooftop solar power that is supplied into the energy grid. Credit:Bloomberg

While some solar proponents argue the policy amounts to a “sun tax” that would discourage household solar panel uptake, the peak advocacy group for residential and small business power customers, Energy Consumers Australia, has increased its support of the changes.

The Australian Energy Market Commission will publish its new rules on August 12, which is expected to allow networks for the first time to charge solar panel owners, affecting the power bills of up to 2.7 million Australian homes that face the prospect of having tariffs charged to their current feed-in payments.

Networks would probably charge households for sending power to the grid in the middle of the day, when the grid is congested with supply from rooftop panels, and offer financial incentives for customers who send power when demand is highest in the early evening.

Research commissioned by Energy Consumers Australia, which included focus groups in three states and a 2000-person survey, found 69 per cent of Australians felt positively about the proposed reforms and 6 per cent viewed them negatively. Support was highest among households with large power bills (78 per cent) and those considering purchasing solar panels (77 per cent).

“The strength of positive sentiment towards these changes was overwhelming when the changes were described in neutral and unemotive language,” Energy Consumers Australia chief executive Lynne Gallagher said.

“We see plenty of merit in aspects of these possible amendments because we think they can help deliver a system where more people are rewarded more favourably for the energy they produce and the critical role they can play in a balanced future system,” Ms Gallagher said.

The study, conducted by research firm Newgate, challenges the findings of a smaller survey of 1000 NSW residents conducted by lobby group Solar Citizens, which suggested two-thirds of households would be less likely to buy rooftop solar if the proposed changes were introduced.

“We want to see the small-scale solar industry continue to thrive because cheap solar energy is driving down electricity prices for everyone while powering a cleaner energy system,” Solar Citizens director Ellen Roberts said.

“We fear once these charges are in place they’ll derail Australia’s uptake of clean solar energy.”

Critics of the AEMC’s proposed changes have also raised concerns the networks may game the system. Network operators earned a bad reputation in the previous decade by “gold-plating” poles and wires assets with excessive infrastructure, which resulted in higher network charges to consumers.

The Grattan Institute think tank calculated the values of network assets per household in NSW rose from around $5000 in 2006 to around $10,000 in 2016 real terms.

Australia has the highest uptake of rooftop solar panels globally and renewable energy can account for as much as half of supply to the national energy market during peak periods. Last week, the new head of the Australian Energy Market Operator, Daniel Westerman, called for investment to make the system capable of handling bursts of 100 per cent renewable energy by 2025.

AEMC chief executive Benn Barr said he was confident consumer protections â€" overseen by the Australian Energy Regulator â€" would mean network proposals were scrutinised before being approved.

Network companies are not expected to seek significant upgrades to their infrastructure, he said, but would need to invest in new systems to manage the two-way flow of power into and out of the grid.

“The energy market operator has spoken about the waste of solar energy, and if you don’t fix it, if you don’t move it around to when it’s needed, you’ll have panels generating all day and not getting used and that doesn’t help anybody,” Mr Barr said.

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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.

Nick Toscano is a business reporter for The Age and Sydney Morning Herald.

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