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We need a fair price for solar – and we need it now

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Solar Citizens believes this week’s decision by the Essential Services Commission of South Australia (ESCOSA) to remove the minimum price for solar exports is out of step with regulators nationally and shows an absolute lack of understanding in the South Australian electricity market – and a blatant disregard for solar owners – 197,500 households across the state.
 
What we need right across the country is a real, fair dinkum price for solar that recognises all of the benefits that solar provides.
 
South Australia’s electricity companies will no longer be required to pay households with solar panels for the excess power generated by their rooftop units that they feed into the electricity grid.
 
Tens of thousands of solar owners in South Australia will now be offered nothing for their excess solar sent to the grid and that is a loss for all electricity consumers in South Australia.
 
The decision will affect the 197,500 households with solar in South Australia, particularly the 60,000 households that lost their 16c guaranteed price through the Solar Bonus Scheme earlier this year.
 
The wealthy and powerful handful of companies who run power in the State will then on sell the power that these solar households produce at a premium, while the primary producer of that power makes nothing, zero. 

This is a clear demonstration of a broken market – an electricity market in desperate need of reform.

Any rational examination of the rates on offer by the large retail electricity companies cannot escape the fact that only two of them are offering rates above the minimum rate.
 
This market the big power companies operate in, and indeed seem to have huge influence over, is obviously broken and it clearly favours maintaining the market dominance of power producers of the past.
 
All of these energy companies have deliberately designed their contracts to be complex and difficult for the ordinary consumer to discern which one is the best value overall eg – a higher feed-in tariff could be undermined by other features in the contract. 
 
Axing the regulated minimum price is an experiment on SA’s solar owners in an unregulated market where big power companies have disproportionate bargaining power – it’s an experiment that is destined to fail.
ESCOSA itself has acknowledged that the Energy Made Easy website does not provide useful comparisons with contracts containing solar RFiTs properly and that it is very difficult to ascertain which contract offer is the best value for solar owners, or indeed any consumer.
 
The commission said their decision was based on its view that the market structures that facilitate electricity retail competition are ‘sound’ and continued regulation of the Feed in Tariff might ‘inhibit competition’ in the future.
 
Either the ESCOSA has a real lack of understanding in the South Australian electricity market or an incredibly short memory.
 
It is the lack of competition in the South Australian electricity market that has been widely identified as a major reason behind recent wholesale price spikes.
 
The decision by the ESCOSA ignores the huge value of rooftop solar in South Australia that has helped provide reliable, cheaper electricity and reduce the price of electricity for all South Australians,” she said.
 
If we want to encourage a smarter way of generating cheaper energy, we should be valuing solar electricity. Solar power, especially when coupled with battery storage, can provide the solution for higher electricity prices.
 
Both the Queensland and Victorian state governments have wide ranging and informed inquiries well underway that are actively examining what the fair price for solar power actually is, and what it’s broader benefits are, and what value these benefits represent.
 
The Victorian Essential Services Commission found that solar owners deserve a higher rate because of the environmental benefits distributed solar brings to the state and has moved to set new minimum feed-in tariffs that will see solar producers receive a higher price at peak times.
 
We note that ESCOSA in its determination reserves the right in the future to set a minimum price for solar under the SA Electricity Act and as such we call on ESCOSA to immediately investigate recognising the true environmental, network and social benefits that rooftop solar delivers to the community.

Claire O’Rourke is National Director of Solar Citizens.

  

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  • Steve Fuller

    ESCOSA believes in the market.
    The retail electricity market is about as transparent as a lump of coal and good luck to anyone trying fathom whether they are getting a good deal or not.
    Comparing retail electricity plans is like comparing apples with oranges, plums, beetroot, almonds or mushrooms. The idea of most retailers is to treat their customers like mushrooms.
    People these days have busy lives and don’t want to be lumped with having compare an endless variety of market offers designed to confuse whether it be car, home, life or health insurance, mobile or internet plans, banking, superannuation, investment and on and on.
    To rely on deliberately opaque retail electricity companies to set fair market rates for solar exports and play a positive role in encouraging renewable energy is fanciful when their main (only) motivation is to maximise profit.
    Join Solar Citizens campaign for a Fair Price for Solar now http://www.solarcitizens.org.au/national_fair_price_for_solar

    • Greg Hudson

      No point sending a request to the PM. He appears to be so deeply in the pockets of the Fossil Fuel (FF) industry, no amount of emails is going to make any difference. His underlings will filter everything before he gets to see it.

    • Greg Hudson

      I think we would all like to see that. Please post link here !

  • Mike Dill

    Fair this year is not going to be the same next year.
    As more solar goes in, eventually the grid is saturated with solar in the middle of the day, and the value of that energy at that time will be very close to zero, for every generation source.
    With some luck we may have enough storage to save it all for times of greater need.

    • Brian Tehan

      Except that we’re still a very long way from saturation, as can be seen by checking NEM Watch on this site. It seems to me that, in the middle of summer, it’s about 10% of the mix, happily providing peak power for all the office buildings and air conditioners. Oversupply – it’s hard to imagine. We already have storage in the biggest states – it’s called hydro and can be dialled up and down as needed. In some cases, we have pumped hydro where it can be pumped back up using excess power. We’ll have a lot more batteries down the track and the PV power will be flattened out and used and provided through the evening peak.
      The fact is that solar PV is an essential part of the energy mix and if it were removed the electricity supply would be in trouble. It should be rewarded accordingly.

      • Ian

        So very well stated. The reaction of ESCOSA would be understandable if the percentage of the solar component of the energy generation mix was very much higher. Why then are they taking such a punitive stand against household solar exports? Their actions are sure to shoot themselves in the foot as a solar households use this perverse disincentive for solar as an incentive for home storage.

  • Ray Miller

    This is strait theft, Merry Christmas SA solar households from ESCOSA.

    The under valuing of Solar PV by the various state commissions has happened almost in every Australian state, a few disturbing things become evident, the commissions fail;
    – to realise that the current economic model set up to operate our energy networks is very broken and yet not only do nothing to help fix it but the opposite.
    – to understand the enormity of the current unstoppable energy transition as Alan Finkel has pointed out.
    – to protect the ordinary citizen from exploitation buy the incumbent players
    – to understand the current energy system is having many significant negative effects on our current and future citizens, almost as though they have a mission to inflict willful damage due to gross professional ignorance.

    To add insult to injury the very citizens are funding these commissions either directly or indirectly.
    I have a (very) faint hope that in 2017 we see major changes to value any move to decarbonise in line with the science.

    • Greg Hudson

      Strait should be straight.
      Victorian Govt has just increased FIT based on TOU (time of use).

  • Phil

    100% Off grid is viable and revenue neutral in S.A now for a stand alone home with unshaded 4-5kw of solar panels over an 8 year cycle if you use LPG for some cooking , solar hot water and a Tesla Powerwall 2

    Off grid will just get cheaper and more viable from now on.

    The benefits are not just cheaper energy costs but a more reliable service that is much greener

    And you can send a clear message by doing so that you don’t agree with or support the predatory behaviour of what was once a public asset providing an essential service.

    • Dispassionate

      So the huge amount of renwable power has pushed prices up enough to make going off grid viable?

      • Phil

        Yes that appears to be the case in S.A

        Although i’m in regional NSW and went 100% off grid as the daily access fee is double the Sydney Metro RATE and the cost per kwh is more too.

        The costs in regional NSW kept going up and the grid reliability went down . So it reaches a point where you have to go off grid to maintain a reliable and affordable service.

        I guess the corporate world cant do more for less in the energy industry like many other industries can do such as telcommunications

        • Dispassionate

          So renewables really do push up the price of electricity

          • Phil

            I would say high electricity prices drove me to renewables in my case ( going 100% off grid)

            However if another company had a better deal i would still be on the grid.Unfortunately there were none.

            And it’s not just the cost savings why i went renewables , but also the grid reliability in Qld and NSW (i’ve been off grid in both those states) I got sick of starting the genset when the power went off in storms or for Grid maintenance to be quite honest

            AND the fact that meter readers (in Qld) turn up with no I.D and look like criminals. That’s unacceptable IMO ,and the only resolution is to put your meter at the front gate so they don’t need to come onto your property.That’s not easy or cost effective to do in an existing installation in many cases.

            I’m not sure if Renewables push up the price of Electricity. Not really my area of expertise.