Market Insight residential electricity price series

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New data shows that energy consumers are paying more than they think in their bills, and more than what the regulator admits.

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Methodology

  1. For NSW, SA, QLD and VIC prices and bills are based on the weighted median Market and Standing offers made by AGL Energy, Energy Australia and Origin Energy in each market.
  2. Weighting takes account of:
  • number of customers supplied by each retailer on Standing and Market offers based on publicly available customer number data;
  • number of customers in each network service provider area (in NSW and VIC) based on publicly available data.
  1. It is assumed that half of each retailers’ customers that are on Market Offers receive all conditional and unconditional discounts and the other half of each retailers’ customers that are on Market Offers receive only unconditional discounts.
  2. The median offer in each offer category (Standing Offer, Market Offer with and without conditional discounts) is used in the weighting.
  3. Prices in WA, ACT, NT and TAS are for “Home Plan”, “Home”, “Standard meter”, “Tariff 31” respectively.
  4. For the sake of consistent inter-state comparison, the representative customer is assumed to consume 4,800 kWh per year. It is assumed that the customer has neither controlled load nor solar PV.
  5. All NSW, VIC, SA and QLD retailer offer data is obtained from MarkIntell by scraping retailers’ websites and by scraping Energy Made Easy and Switchon price comparison websites.
  6. Prices include GST.

Residential Annual Electricity Bill

Residential Annual Electricity Bill

 

Residential Electricity Price

Residential Electricity Price

 

 

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25 Comments
  1. Mike Dill 1 year ago

    At 47cents per kWh, how long does it take to pay off a solar array in SA?

    • Andy Bowe 1 year ago

      It would depend on size of array, your household consumption etc. Have a read of a few articles on http://www.solarquotes.com.au/blog/ where he sets out costs etc. I think if done properly most systems payback in 5-6 years, but rebates are increasing for each state re exported power to grid ie SA- AGL offering 16cp kWh exported as of 1/7/17.

      • PLDD 5 months ago

        It should be far faster than 5-6 years. I am in NSW and my 8.4KW system (PV only) is targeted to payback in 5-6 years at a $0.25/KWh tariff and $0.11 FIT.

        Given IPART has recommended a reduction in FIT to $0.08 from July it may take a bit longer. I also thought Victoria was adjusting their FIT to a time of day basis which is more reflective of wholesale price fluctuation (i.e. the FIT rises after 4:00pm – i think). Would be surprised if SA stayed as high given wholesale prices there are also dropping.

        I

        • Phil NSW 5 months ago

          The increase in the FIT last July was potentially a strategic move to push out the economics of buying batteries. The coal interests don’t want batteries installed as it would eat into their prime payment period. IPART may recommend a reduction but the entrenched gentailers will look after themselves first.

          • PLDD 5 months ago

            I don’t think the FIT makes much difference to the business case for batteries. The key is how much power consumption do you need to time shift and the differential between the FIT and unit cost of power.

            When the FIT in NSW went to $0.11 the unit cost rose as well so the differential didn’t change that much.

            The real problem is battery costs and installation costs are not falling that much – that is what destroys the business case.

            Why would a retailer see a benefit in reducing the FIT – looking after themselves would see them reduce it further…?

          • Phil NSW 5 months ago

            Think about if you were a gentailer. Your best earning opportunity is when solar slows down in the afternoon through to say 8pm. If you could slow the uptake of batteries, this period remains protected for you to cream the system. You know your coal asset is going to be replaced by RE in the future but you want to squeeze out as much from the asset whilst you can.
            Solar installations are steaming ahead with larger and larger installations to the point, it is now quite easy to offset the service fee with your excess power given a higher FIT. Why buy a battery just buy more panels?
            If the FIT goes down it is harder to offset nighttime consumption and the service fee, hence the case for batteries improves.
            The gentailers know their coal assets will expire so they need more generation into the grid which is coming via individuals and businesses installing solar and or wind at zero capital cost to the government and the gentailers. Right now they must be laughing at us because maintaining the required spin capacity isn’t their problem anymore we are taking up the slack as they have large coal fired power stations drop off the grid without replacing the capacity themselves. Five have been closed in recent times and surprise, surprise the network remains viable albeit just viable.

          • Greg Hudson 2 months ago

            Re battery costs, I agree, they are not falling as fat as they should be, in particular Tesla’s. Yes, they put a fire under their competitors when they first appeared, but lately (when battery prices are dropping) Tesla INCREASED their PW2 price. It doesn’t make sense when their unit cost is dropping like a stone due to the huge numbers they are installing into vehicles. Compare the cost of a Tesla car battery to a Powerwall and you will see what I mean. AND… why the hell should a Tesla vehicle owner have to buy a PW2 AS WELL when they have a HUGE car battery sitting in their garage doing nothing? IMO their decision not to support V2G (Vehicle to Grid) or V2H (Vehicle to Home) sucks. (Along with many of their dumb design ideas).
            Disclaimer: I have a Model 3 reservation, and own Tesla shares.
            Check out this Aussie homebuilt PW…

        • Greg Hudson 2 months ago

          G’Day PLDD. Your payback period seems very high, even at 11cFit. You should be getting approx 46kWh/day (average) from your PV array, so for such a long payback, you must be either consuming a lot of the energy you are making, or using a lot after dark (most likely). No doubt you have a strategy… Like using LED’s, washing dishes / clothes at midday, not using a dryer, bla bla bla… ? Are you getting any discounts on what power you buy ?

          • PLDD 2 months ago

            I use about 15KWh in the summer and up to 30KWh in the winter – as we heat with a big heat pump. The house is energy efficient but interestingly the pumps on the water tanks and solar hot water system burn quite a lot of background power.

            My production is great in summer (50+) but compromised in winter due to high trees in the west and east so lots of shading compounded by flat panels (for aesthetic reasons) so a good winter day drops to 18KWh and a bad on 5.

            My power was discounted and I have a pretty good model that looks at my actual useage/production/self consumption so I can put in the various retailer offers and get a real comparison….it’s interesting to see how the “better deals” on the FIT recover their money on higher standing charges and unit costs. I have just moved to a FIT of 20c, same standing charge but undiscounted unit costs. My model tells me that given my useage pattern it will save me a lot.

      • Greg Hudson 2 months ago

        Don’t be fooled by ‘higher’ FiT’s… AGL are probably charging above the odds for power you import, so you end up saving nothing or very little.
        Look for a company with the lowest rate per kWh THEN apply your FiT and compare the two to get a true indication (and use the ex GST price to compare with as well) and don’t forget those discounts.

        • PLDD 2 months ago

          Greg – why ex GST…? Shouldn’t it all be inclusive of GST as all charges get it but the FIT doesn’t.

          My word of caution is any model needs to look at production, self consumption, and imports and the important standing charge. And if possible use actual data.

          One plan works for one person, another for another – definitely not one size fits all.

          • Greg Hudson 2 months ago

            I’ve had GST included on my last 2 PV array installs (I keep moving houses, now up to my 3rd and biggest install of 6.6kW). Maybe it is different in Vic compared to NSW?
            However, one has to be ‘careful’ not to be ripped of with what ‘appears’ to be a fantastic FiT, only to be gouged by the import price (it happened to me on my last install with Red Energy, who eventually got the boot).

          • PLDD 2 months ago

            I think the GST on FIT’s is national ATO policy. The retailer won’t show GST on any payments to you as you are not invoicing them for the power nor do you have a commercial contract (which you need to offset GST received against GST costs incurred). So the result is you pay GST on charges from your supplier and can’t claim any GST paid as you technically have no corresponding business expense.

            Thus my point is use the inclusive GST numbers for all costs as the FIT is also GST inclusive.

            When I changed recently my unit cost rose about 6.5c but in return I had a FIT increase of 9c. Anually I export more than I consume so this makes sense for me. The key is the change in the difference between the FIT and the unit charge….but don’t overlook the standing charge – mine stayed the same – but many generous FIT’s have higher standing charges.

          • Greg Hudson 2 months ago

            I’m looking at my bill now, and it tells me (Line 1):
            Bill Days = 88. kWh used =329. Charge $0.2975 Amount $97.99 (ex GST)
            Line 2 Supply Charge: 0.9828 Amount $86.49 (ex GST)
            Maybe your bills are different ?

          • PLDD 2 months ago

            No all bills are like that. But go down further and there is a GST line, probably a discount line, and probably a FIT line.

            Add up the supply charges apply your discount and you find that is what the GST is based on. Then deduct the FIT as that doesn’t have GST applied.

            If you don’t add the GST to your costs then your FIT is coming off a total that is too low and it incorrectly shows the benefit. You can also get caught out comparing offers because some are inclusive and some exclusive and discounts are not all applied in the same way.

            So always best to standardize all figures as GST inclusive then you are baseing decisions based on the amount you really pay.

  2. Goldie444 1 year ago

    I have come a bit late to this story. It has a lot of questions to help answer our (Australia’s) sorry retail market.
    And how did we get to this stage: Quote “It seems that a reason for the difference between the prices in our monthly series and the AEMC’s annual price trends is that the AEMC assumes all households on market offers pay their retailers’ cheapest rate.”
    If AEMC gets its estimates for market offers in its annual retail price report wrong, what else does it get wrong?

  3. Rod 5 months ago

    So much for lower energy costs post the big bad carbon tax. Thanks Tones.

    • Greg Hudson 2 months ago

      I’m on Alinta’s flat rate (29.75c/kWh) with a 43% discount (in Melbourne postcode of 3131) I say that, because it makes a real difference where you live. According to my last bill, I used 329 kWh (in 88 days) and was charged $97.99 (ex GST, before discount, power only). Discount supposedly only applies to power used, nothing else.
      On the payments page it tells me I received a pay on time discount of $46.35 including GST of $4.21 The figures are out by a few cents, but I let that slip due to rounding errors each day…
      So, my power actually cost $46.35 / 329kWh = 14.08c/kWh INC GST
      Yes, there is a service charge, and GST on top of that, but they cloud the true price.

      How did I get such a cheap price (which will supposedly last for 2 years) ?
      I used the Vic Govt comparison web site to find the best deal. See:
      https://compare.energy.vic.gov.au/
      If you are in Vic, and you DO NOT use this site (at least once every 6 months) you are also missing out on $50
      Yes, they PAY YOU $50 just to use the site to find a better deal, even if you don’t act upon it.
      I check the site monthly just to see what’s happening, and since I joined up with Alinta, they are no longer the cheapest (by a very small margin). However for the moment, I’m happy with what I’m paying.
      If I was on 38 or 43c/kWh I’d be screaming blue murder.
      Anyone paying that price should be looking for a better deal. IMO

  4. Pete 5 months ago

    The Australian newspaper loves the use of point 6. It allows them to keep beating up SA by illustrating an extreme difference that doesn’t necessarily represent reality. For a graph to be called ‘Residential Annual Electricity Bill’ it should also reflect average consumption by state. Energy consumption varies between states, influenced by climate and pricing structures. Climate also influences the wholesale price, for example through the large but infrequent peaks on the SA network on hot days, but it doesn’t have the cold of Vic and Tas which requires overall higher consumption. It’s an easy correction to make and I believe for an author of BM’s standing it should be a bare minimum to represent the annual electricity bill costs more accurately.

    • Rod 5 months ago

      Agreed, I’ve seen the figures somewhere but from memory Tasmanians average nearly double the usage of South Australians.
      Off peak for hot water is also pretty common in SA.
      And in the cents per kWh graph the 48c seems high to me.
      I’m on AGL’s standing offer and 38c less pay on time discount 12%, plus GST so 36.7c kWh.

    • bruce mountain 4 months ago

      Hi Pete, thanks for the post. Yes I agree that different volume assumptions give you a different picture of the typical bill. But my purpose here is to provide an index calculated using a consistent and plausible methodology, and which allows one to track how prices change over time, assuming constant volume. This is an accepted methodology in price comparison and you will find it adopted frequently by official statistical comparisons nationally and internationally. In addition, I would like to draw attention not just to volume differences across the population of consumers, but to price differences in the offers they are on. These two mean the prices for individual customers can be quite different to the index. But this does not undermine the value of an index in tracking changes over time. With respect to the fact that some commentators with a barrow to push will use information to suit their ends. This is inevitable. It is right that you should point out the flaws in their arguments.

      • Pete 4 months ago

        Thanks for your response Bruce. I believe that the assumption of constant volume can be applied on a per state basis. Using the ACCC retail pricing inquiry report, Table 1.1, and what I can read from your graph on the unit price, the ACTUAL average bill price is on par in NSW, SA, QLD and TAS (within $100, mean $2822). That is a very different national bill scenario to that you have presented. That matters hugely in the world of politics that you influence. I have assumed [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]

        • bruce mountain 4 months ago

          Hi Pete. Yes there are price and volume difference issues here. Firstly with respect to price, the ACCC’s report has a different date range and very different methodology to establishing price than the one I have. My indices explains my approach and I benchmarked it against information on median actual bills in a report for the Thwaites Review in Victoria, and so I think it is a plausible estimate for the price the median or typical household is paying. There is nothing in the ACCC’s report that gives me reason to change my approach. I do accept you point however that when one looks at bills rather than prices, it is valuable to convey an accurate picture of the typical bill in each state. However, two comments in response. Firstly the typical consumption in the residential sector is rapidly declining in response to technology change and I am not convinced by the amounts that the AER and AEMC use for this. I think their methodology is flawed and long out of date. Secondly, for the purpose of international price comparison consistent volume assumptions are used. I think I need to stick to that. However I do think your points are good and they should be made when participants and governments cherry pick data to suit their agendas. There is a great deal more to be done on publicly available price and bill indices and I will be doing more on that shortly.

  5. Glynn Palmer 4 months ago

    Comparing retailers can be like comparing apples with oranges.

    I recently compared retail offers using my annual import and export profile. I import 3956kw tariff 11; 1726kw tariff 33, and export 2759kw for a 4 adult household with 3kw rooftop PV and a solar hot water system. I get the Qld 44 cent/kw feed in tariff + the retail FIT. My research indicated that Energy Australia gave me the best financial deal with a credit of $372 pa. The second best was Alinta with a credit of $308 pa. and Third QEnergy with a credit of $290pa.

    Then I discovered that Energy Australia hasn’t paid any Australian company tax over a 3 year period on Australian derived revenue of $24b.
    https://www.michaelwest.com.au/tax-dodgers/energyaustralia-holdings-limited/
    In the 2015/16 ATO report on corporate tax paid
    https://data.gov.au/dataset/corporate-transparency/resource/b84c2b8d-c595-4219-987d-fc1add7f00f0
    AGL Energy had revenue of $13b; taxable income of $711m; tax payable of $208m.
    AGL Generation: revenue $733m; taxable income and tax payable $0
    Origin Energy: revenue $12b; taxable income $94m; tax payable $0
    ORIGIN ENERGY URANQUINTY POWER PTY LTD: revenue $111m; taxable income and tax payable $0.
    Energy Australia Holdings: revenue $8b; Taxable income and tax payable $0.

    With the knowledge that Alinta has put in a bid of $250m to acquire the clapped out Liddell coal polluter, I emailed them to ask what proportion of their electricity sent out was sourced from renewable energy.They responded by sending me their usual marketing information which I already had from energy price fact sheets available on the energy made easy site. So I assumed that they are not sourcing renewable energy at the rate that the RET requires.

    • Greg Hudson 2 months ago

      Remember also that ‘Energy Australia’ is actually ‘Energy Singapore’ (because it is foreign owned)…
      As I’ve said before, it should be illegal for any foreign company to use the word Australia in their name… Effectively pulling the wool over the eyes of the dolts who don’t know any better.

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