For those who can afford it, adding a battery could beat the “sun tax” that will further deplete the once-generous rate of return for rooftop solar pioneers.
A third of Australia’s households have rooftop solar and almost three quarters of the output has historically been exported into the electricity grid.
But a new tax, or so-called two-way pricing, is already being trialled in NSW as the network attempts to throttle output during hours of too much supply to keep the system stable.
“When we got our first solar we had 60 cents (per kilowatt hour) from the NSW government and an extra six cents from whoever was our energy provider at the time, and now we get seven cents,” economist Nicki Hutley told AAP.
“There will be – during the middle of the day – a sun tax but that’s why we need to invest more in household batteries and things like vehicle-to-grid charging,” she said.
But getting smarter about charging and using appliances in the middle of the day requires smart meters, which measure energy use in five to 30 minute blocks.
Victoria and Tasmania have accelerated the rollout of smart meters, and the Australian Energy Market Commission in November mandated smart meter deployment across the national electricity market by 2030.
“It’s all about setting your dishwasher or whatever to go on at midday so you’re maximising your energy use during the day and not exporting back to the grid” at that time, Ms Hutley said.
“If you’ve got a sufficiently sized battery in your home, or your car, you can store the energy and then you don’t have to pay,” she said.
Under the access and pricing rule change, existing solar customers cannot be put on export pricing arrangements until July 1, 2025, unless they elect to do so.
These network tariffs, which providers charge to retailers, are being introduced across NSW, and are proposed for South Australia in 2025 and under development in Victoria for 2026.
Retailers will choose how to package these up into retail offers for customers, along with their other costs to supply electricity.
Leading charities lobbied for the reform because they thought it was unfair that everyone in a network should pay to support those who could afford solar panels.
Meanwhile a federal Community Batteries for Household Solar program is building shared storage for up to 100,000 households.
This is designed to allow more renters who cannot install solar panels to access cheap renewable energy and to absorb excess energy that might cause voltage spikes in the electricity grid.
Ausgrid, which supplies power to more than two million customers in Sydney, the Central Coast and the Hunter confirmed its two-way pricing was opt-in – initially.
“Yes, there is a 1.2 c/kWh export charge but only for excess exports above the free threshold (and between 10am and 3pm)”, an Ausgrid spokesman said.
“What this means is customers are being paid a tiny fraction less for their electricity exports. They are still being rewarded,” he said.
“But key to understanding this, is that there is a 2.4 c/kWh reward for exports between 4pm and 9pm,” he added.
NSW’s Endeavour Energy also levies solar exports during the middle of the day and provides a reward for exports during late afternoons and evenings.
For regulators, export reward tariffs – when passed through to customers by retailers – are intended to build a more stable energy supply for the benefit of all electricity users.
The electricity network was not designed for large amounts of energy flowing back in. This two-way flow of energy, with peaks in supply during the sunny middle of the day, has been overloading the network in many areas.
This is preventing some home-owners from exporting any solar at all, and also leads to additional network costs to accommodate the increased load.
These costs are currently borne by electricity users unable to access the benefits of solar, such as renters and apartment dwellers, as well as solar households.
“We’re encouraging people to start changing their solar habits now,” Compare the Market head of energy Meredith O’Brien said.
“Run power-guzzling appliances such as dishwashers, washing machines and dryers during the day or charge laptops, mobile phones, tablets and other devices,” Ms O’Brien said.
Consider adding a battery to store solar electricity to either use in the evening or export it overnight or in peak demand periods in the late afternoon and early evening when the credit will be larger, she said.
It also pays to read the fine print on retail offers, as what looks like a great rate of return may be wiped out by higher electricity consumption charged.
The days of earning more per kilowatt hour for solar exports than what a household was buying for its own consumption are long gone.
A feed-in tariff, also known as a buyback rate, is a credit received by homes and businesses for electricity sent back to the grid.
For many households, credits build up over summer and can be offset against otherwise unaffordable winter power bills.
Most homes are on a plan with a flat rate, while others have a time-of-use rate with the middle of the day earning very little and a higher pay-off in the evening.
There are also so-called block feed-in tariffs, where rooftop solar may attract a certain rate for the first five kWh sent to the grid each day, but half that for the next five.
Early adopters like Ms Hutley were on premium rates that state governments put in place in 2008 to encourage uptake.
NSW slashed the rate in 2010, Victoria’s 66c premium feed-in tariff ended in November 2024 and South Australia’s 20-year scheme will expire in 2028.
Victoria in January proposed what is effectively a zero-cent minimum rate, which means the state’s almost 800,000 solar households must change their behaviour to get more bang for their solar buck.
The minimum flat feed-in tariff will drop from 3.3 cents from July 1 under the draft proposal, with a final decision due by February 28.
