Solar

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

Published by

21 December 2016 2:06 PM

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.