Solar tax

In our last note, we told you about how the Australian Electricity Market Commission (AEMC) worked with the Australian Council of Social Service (ACOSS), the Total Environment Centre (TEC), and the Energy Consumer Association (ECA) to legislate against all consumers by allowing distribution networks to impose export tariffs on small generators.  We failed to include the St Vincent de Paul Society of Victoria (SVDP) and the SA Power Networks in this list – our apologies for this oversight.

The proponents of this change argued that owners of small solar PV unfairly benefitted from providing energy for others to use.  Hence, they must be required to pay to transport their energy on the grid via the imposition of export tariffs.  We argued that the rules should be the same for all generators, regardless of size – either all pay or no one pays.  Otherwise, all consumers will end up paying more due to reduced competition.

The AMEC gave the distribution networks the right to discriminate by removing Clause 1.6.4 from the National Electricity Rules, but it did not oblige them to do so.

We thought it would be interesting to see how the distribution networks would exercise this right, so we looked at their future plans, where such plans were published.

We found the following;

  • All NSW distributors intend to impose export tariffs.  Essential Energy will start from 1 July 2024; Ausgrid and Endeavour Energy from 1 July 2025.
  • Evoenergy in the ACT will impose export tariffs from 1 July 2025.
  • SA Power Networks will impose export tariffs from 1 July 2025.
  • TasNetworks will wait until 2029 to decide.

Common to all of these distributors is that they intend to apply export charges on all small generators regardless of their location, and none proposed to do the same for energy provided by large generators on their networks or via the transmission networks.

The Queensland distributors – Energex and Ergon Energy – had not published their plans yet, and as we mentioned before, the Victorian government will not allow their distributors to impose export tariffs.

What should one do?

If you have solar panels, consider buying batteries to store your excess energy. You may also want to expand your solar installation to get past the “small” category if you have the roof space to do so.  Alternatively, get ready to turn off your solar generators.

If you use electricity from the grid, get ready to pay more.

If you are concerned, or if this affects you directly, you should consider contacting your local elected representatives about this!

How much energy is in play?

Overall, a huge portion of the existing (and future) generation capacity will be removed from our power system, and roofs will remain bare. Clamour for building more transmission lines and energy zones will increase as big energy will have to provide more energy.

As an example, we looked at the mix of power being produced on Thursday, 14 September 2023 on OpenNEM.  At 12:35 pm (AEST) in NSW (and ACT), rooftop solar generated 3,632 MW out of a total of 6,482 MW.  Assuming that about 60% of this rooftop energy was being sent out, we get 2,179 MW being provided by rooftop solar for others to use.  The remaining 2,840 MW was being provided by large generators.

We are talking about potentially losing more than 40% of the current power capacity in NSW as a result of this legislation.

Prices will rise for everyone!

Big energy will benefit.

You can read about the distributors’ intentions here.

This is the second part of a two part series. You can find part one here: Export tariffs – A case of legislated discrimination against consumers

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