Charging for rooftop solar exports “not needed and not fair”

A St Vincent de Paul-backed push to charge rooftop solar owners for exporting their excess solar power back to the grid has been slammed as unnecessary, unfair and misinformed, with independent data showing the net financial gain that solar households deliver to non-solar households far outweighs any costs.

In a webinar on Thursday, PV advocacy group Solar Citizens called on Australia’s millions of solar households to push back against proposed changes to the National Energy Rules that would allow networks to impose charges on rooftop generation exports to the grid.

As RenewEconomy has reported, the push for a solar export tax – originally based on the well-worn claim that households without solar are subsidising those with panels – has intensified this year, amid concerns that booming rooftop solar uptake is threatening to destabilise the grid.

The problem – most keenly felt by the Australian Energy Market Operator – has attracted various proposed solutions, many of them controversial. But a series of solutions recently put to the energy market rule maker have called for the imposition of fees on solar exports, to pay for any grid augmentations Australia’s massive distributed solar resource may necessitate.

The proposals currently being considered by the AEMC include submissions from consumer advocacy groups Total Environment Centre and the Australian Council of Social Services (ACOSS), as well as from St Vincent de Paul, which has thrown its support behind a proposal from South Australia distribution company, SA Power Networks.

Solar Citizens national director Ellen Roberts said on Thursday that while the consumer groups had good intentions “in terms of making our energy system more equitable,” there were serious concerns around the evidence used to justify the proposals and the impact on solar households and future solar uptake.

“The Australian Energy Market Commission is considering three rule changes at once, and there’s plenty to support in the proposal from Total Environment Centre and Australian Council of Social Services,” Roberts said in a statement on Thursday.

“But any blanket imposition of fees on solar households will work to benefit the big coal and gas generators who will sell more power if solar exports are no longer viable.”

(TEC and ACOSS argue that some level of charging might be justified, but only if networks spent money on upgrades and removed current and random restrictions on exports. The TEC/ACOSS proposal is discussed in-depth on RenewEconomy here, and in a recent Energy Insiders podcast here and Mark Byrne’s own words, here.)

Bruce Mountain, who heads up the Victoria Energy Policy Centre, agreed with Roberts that blanket solar charges were not justified.

“I think some customer advocates have not considered the evidence of how markets and network access arrangements actually work,” he told the webinar.

“I think they are not mindful of the fact that they would be discriminating against distributed energy production should their proposal work.

“I don’t think they were aware that generators, under our rules, do not pay for access to the network. I think they also did not consult the evidence on price effects.”

Using Victoria Energy Policy Centre data, Mountain presented analysis showing that while residential rooftop solar pushed up network prices by $1.30/MWh in Victoria in 2019, it pushed down wholesale prices by $6.40/MWh.

“And so taking the upward, and balancing it against the downward, the net effect is that in Victoria in 2019, residential rooftop PV reduced prices for all consumers by $217 million.

“So those households that have taken their hard-earned and invested it in rooftop solar have every reason to be proud of their investment and conscious that they are providing a benefit to their neighbours and to all other consumers. A sizeable benefit,” Mountain said.

Meanwhile, he added, consumer advocates should be reminded that distributed energy is a commercial threat to the energy market incumbents, including SAPN.

“If you’re Woolworths or Coles selling lettuces, you don’t want your customers growing their own. So it is a commercial threat to them. They lose production, they lose market share. And as we’ve shown, they face lower prices. So … it’s not terribly welcome.

“And this is true not just for the producers, but also for the network service providers …they face a declining market and higher overall prices, which they then know over time will choke off the demand for the services that they have.

“And finally, the energy retailers, they are the companies that package up electricity and buy and sell to you. They, too, do not want you making your own. They would rather sell electricity that they produce or that they buy.”

But all evidence considered, says Mountain, we shouldn’t even be having the conversation.

“(Too much rooftop solar) is not a problem, for now, anywhere in Australia,” Mountain told the webinar.

“It’ll be a problem, first, in South Australia, possibly in around five years’ time. So it’s something we have time to prepare for and be mindful of.

“But adjusting to charge consumers for access to the grid is not suitable at this point. Certainly not for that reason.”

The more important question, Mountain said, was whether solar producers, alone, should be paying for grid augmentations, even if they were to accommodate more distributed renewables.

“When the Latrobe Valley coal generators, and the Hunter Valley coal generators, and the South Australian gas and coal (generators) and Tassie hydro generators set up, those costs were borne by consumers. That was the nature of the regulatory arrangement.

“And so even if we did need to augment the network – and that has yet to be discovered and we need much higher penetration before this arises – …we need to be mindful of the history of who has paid for augmentation.”

Source : reneweconomy