Australian network operators are being accused by the solar industry of unfairly targeting Australia’s 2 million solar households to justify changes in tariff that are designed to protect the “gold plating” of the networks over the past decade.
They accuse the network lobby of seeking to use tariffs to justify the doubling of the cost of the grid in anticipation of an increase in demand that never occurred – and they say the networks intend to do this by demonising solar, now recognised as the biggest challenge to incumbents in more than a century.
The Energy Networks Association gained a lot of publicity in mainstream newspapers and on radio on Wednesday for their push to introduce so-called “demand” tariffs, which they said would be more cost reflective for consumers.
That is not at dispute. But what has shocked the solar industry – although not surprised it – is the claim by the ENA that “research” found that non-solar households would pay $655 in annual cross subsidies to solar households – by 2034.
“These are simplistic conclusions from a dodgy report,” said John Grimes, the head of the Australian Solar Council. He, like others in the industry, is concerned that proposed changes by the Australian Market Operator will give the network operators carte-blanche to splice and dice the tariffs.
“It is like putting the fox in charge of the hen house,” Grimes said. “This is a self-serving report aimed at preserving the profits of a few large power companies while pretending to act for consumers.”
The solar industry actually agrees with the concept of demand tariffs – which reflects the maximum usage of a consumer – as long as it is calibrated correctly and fairly. In fact, it is the solar industry which proposed them. But it is appalled with the ENA’s branding of solar as the major problem, and disputes the numbers produced by the lobby group’s document.
The ENA push is typical of what is happening in the industry. AGL Energy has described solar tariffs as “a scam”, Origin Energy describes solar households as “free-riders” on the network. Ironically, both companies are introducing initiatives to install solar, but want to do it under their rules, and not allow new competitors in the market. Tariffs are an important part of that control.
At the same, individual network operators recognise the impact and the benefits that solar will bring. Ergon Energy is now installing unsubsidised battery storage because it is cheaper than poles and wires and helps integrate locally produced solar. It envisages a series of solar-based micro-grids, as do network operators in WA and South Australia. Indeed, South Australia’s network owner has delivered an extraordinary forecast for the uptake of solar and storage.
Still, the network lobby is in for as much as it can get.