AEMC backs down on rooftop “solar tax” proposal

A proposal mulled by Australia’s chief energy market rule maker to charge a “solar tax” to households exporting their excess rooftop PV generation back into the grid has been dropped, after it prompted a major backlash from solar households and advocacy groups.

As we reported here, the controversial rule change was canvassed in the Australian Energy Market Commission’s draft report on the Distribution Market Model, based on the argument that there was no other way for networks to recoup their costs from grid-connected solar households.

Essentially, the AEMC was concerned that rooftop solar was getting a “free ride”, by not paying for the use of the grid when solar power was exported – and because solar households tend to use less electricity from the grid.

But now it apparently is willing to consider the benefits, rather than just the cost, of rooftop solar.

In the AEMC’s final report on the Distribution Market Model, published on Tuesday, the rule maker appears have to conceded that the idea was an unpopular one, and that further work was needed to balance the many benefits against any costs to networks of distributed solar PV.

“The issues of access and connection charging received the most comment from stakeholders,” the report notes.

“Further work is needed to understand whether distributed energy resources create benefits, or impose costs on the distribution network,” it says.

The report adds that further work is also needed to understand what consumers want, bearing in mind that the loss of open grid access or the imposition of charges for export of energy from solar households could adversely affect networks, by “prompting a death spiral.”

The report also noted that charging solar households for exporting to the grid could be seen to be unfair, considering large generators currently did not pay for grid access, “beyond a shallow connection charge.”

Solar Citizens, a community-based solar advocacy group that campaigned strongly against the rule change, described the back-down from the AEMC as a big win for consumers who had invested in solar to regain some control over the size of their power bills.

“It was an outrageous proposal to begin with and has been rightly taken off the table,” said Solar Citizens campaigner, Shani Tager in emailed comments to RE.

“This is the second time that the AEMC have tried to introduce similar charges and have been forced to back down in the face of opposition by solar owners.

Tager said that some 2,500 solar owners across Australia had “made it very clear to the AEMC” that an extra charge for solar exports was an “unacceptable approach.”

“Rooftop solar delivers clear benefits across the community and solar owners should not be charged for their clean, renewable power,” she said.

“The big power stations don’t have to pay to export the energy they generate to the grid and solar households shouldn’t have to pay either.”