Retailers to pocket carbon credits from customers’ rooftop solar

The big energy utilities that dominate Australia’s electricity markets may be able to “steal” the carbon credits from their customers’ rooftop solar arrays, under a proposal outlined under the revised National Energy Guarantee.

The suggestion is included – with little explanation – in the “high level” document that was distributed to state and territory energy ministers ahead of the COAG meeting in Melbourne this Friday.

The document says only:

“To ensure that the emissions reduction requirement remains technology neutral, all existing embedded generation and behind the meter consumption will be added to a retailer’s load but will also be automatically allotted to the relevant retailer for calculating their emissions.”

This has raised alarm bells, for a number of reasons.

Firstly, many households have paid for and installed their own rooftop solar systems because they feel their retailers have not done enough to reduce emissions.

They may be horrified to learn that their retailers will now be able to use the “zero emissions” power produced by their rooftop solar systems, and for some stored in a battery for use at night, to help meet the retailers’ weak emissions targets.

Secondly, the households will unlikely be paid for it. The feed-in-tariffs offered by the big utilities vary from state to state, and in some cases are derisory or non-existent.

Only one state, Victoria, calculates a “social cost of carbon” – of 2.5c/kWh, in its calculations of feed in tariffs, but its standard recommended tariff, despite this, is at the lower end of most states.

It seems that the very least the retailers could do – if they are now to benefit from the emissions free rooftop solar that many were unhappy their customers were installing – is to offer a payment to reflect that benefit.