Starting on July 1, 2024, electricity providers will introduce a new mechanism to charge solar panel owners for the electricity they feed back into the grid. This mechanism is called a "solar export tariff" and it will be rolled out in NSW, the ACT, Tasmania and the NT in 2024, with SA and QLD to follow in 2025, and Victoria in 2026.
Solar export tariffs are a result of regulatory changes made in 2021 to redistribute the costs of supporting rooftop solar so that large solar system owners pay more, and small and non-solar owners pay less. It is fair to consider any solar system of more than 8kW to be large.
Here are the things solar owners need to know to be ready for this new feature of Australia's electricity landscape.
What is the cost to export?
Between 1-3c/kWh in 2024. This charge will be applied to solar energy sent back to the grid in the middle of the day.
Some solar owners will see the charge applied differently in different seasons.
It will be applied only after some amount of solar has been exported. That minimum amount will be different for different people, and it will be calculated in different ways depending on the house, age of the solar system and other factors.
Basically, it is complicated and the impact of it on electricity bills will be uncertain, but the rule of thumb is that larger solar system owners will pay more.
It isn't mandatory - yet.
The tariff is opt-in for the moment. Where people do opt-in, their costs to take electricity from the grid will be lower. But the bill credits they see for sending solar to the grid will be smaller.
The Australian Energy Regulator has stated that solar export tariffs in NSW, ACT, NT and Tasmania cannot be mandatory until 2025. They have not applied any similar restriction to SA, QLD or Victoria in their guidelines to electricity companies.
What can solar panel owners do about it?
The simplest thing to do for now is to not opt-in to an electricity plan that contains a solar export tariff. That is, do nothing. This will mean that a solar owner will not be able to take advantage of decent cost reductions when buying power from the grid during night time or winter. But they will not be immediately affected by a solar export tariff either.
Solar export tariffs are designed to stop solar being exported to the grid when there is a lot of sunshine about. That means that solar panel owners should put in place things that soak up their solar generation.
Some (admittedly inconvenient and/or costly) suggestions are:
- Set all of the household appliances to only run during the middle of the day
- Electrically heat your water only in the middle of the day
- Charge any electric vehicle that is at the premises only in the middle of the day
- Contact your solar installer to install and configure zero-export limiting devices at your home
- Buy a battery with more than 10 kWh of storage and ensure it is configured to soak up excess solar generation
What is the best way to manage solar export tariffs?
Unfortunately solar export tariffs are here to stay. They have been discussed and thought about for many years and now they are now a reality for solar-loving Australian electricity consumers.
Solar export tariffs don't mean that Australians must pay more for electricity, they just make it much more complex and uncertain to get a lower bill using solar.
The best way to solve this problem is to find an electricity provider who will guarantee you an electricity cost and then make it their problem.
Most solar panel owners have installed solar as a simple solution to rising electricity costs. Solar export tariffs erode the apparent simplicity of solar and increase the uncertainty of solar savings.
Normal Australian home owners are within their rights to ask their electricity retailers and solar installers to guarantee them that they will not pay more for electricity over the next 5 years as a result of the solar system that they were sold.
Dean is the CEO of Reposit Power and creator of Reposit's 7 year No Bill guarantee. Reposit Power is a an Australian energy technology company that helps households completely remove their energy costs, and applies technology to guarantee those costs won't come back.
Sources:
https://www.aer.gov.au/industry/registers/resources/guidelines/export-tariff-guidelines
https://www.aer.gov.au/industry/registers/determinations/essential-energy-determination-2024-29
