Rooftop solar households more likely to switch electricity retailers in search for best feed-in tariff

Australians with some form of rooftop solar system at home are increasingly likely to switch electricity providers as they seek the best solar energy buy back rate, also known as the feed-in tariff.

According to a new analysis from Australian market research firm Roy Morgan, households with solar panels are more likely to have switched their electricity service provider than the average household and are similarly more likely to be considering switching in the next 12 months.

The analysis is based on the behaviour and intentions of households across Australia, though excludes households in Western Australia, a state with a legislated monopoly for electricity supply through the government-owned Synergy.

Roy Morgan’s latest analysis builds on the November “Ownership of ‘Solar Energy Systems’ is on the rise” study which showed that 32 per cent of Australian households now have some form of solar energy system, which can include solar hot water, solar heated swimming pools, or rooftop solar panels with or without battery systems.

But the focus on switching electricity service providers highlights an important factor in Australia’s residential solar industry.

The analysis found that, of those surveyed who had acquired solar energy systems during the last 12 months, the rate of switching was 4 percentage points higher than the switching rate for all Australian households outside of WA, and six percentage points higher for those with solar and battery systems.

Similarly, the likelihood to switch electricity providers in the next 12 months of those surveyed with a form of solar energy system is also higher compared to the likelihood of the average Australian household outside WA.

Roy Morgan also found that households that switched provider and purchased a solar system in the last 12 months were more likely to choose Alinta or EnergyAustralia for their new provider, and less likely to choose AGL.

Even those currently in the market to install solar panels within the next year are considering a switch to another electricity service provider, a figure which is also above the national average.

In the end, Roy Morgan’s analysis concludes that the acquisition or intention to buy solar panels is “clearly prompting” Australian households to become more engaged with their choice of electricity service provider so as to maximise the benefits of their solar investment.

Michele Levine, CEO of Roy Morgan, says that the acquisition of solar energy systems continues to increase across Australia thanks to significant government support via rebates and interest-free loans, and that these households have a higher propensity to switch electricity providers.

“However, despite these results we expect that the decreasing feed-in tariff from many electricity service providers going forward will crimp the switching behaviour of these households,” said Levine.

“In fact, some energy retailers have already stopped paying customers for the solar power they generate.

“The data clearly shows that in this challenging economic climate decreasing feed-in tariffs, not just high energy prices, are impacting household decisions. These factors are pushing households to review their plan to make sure they are getting as much return on their investment as possible.

“The latest figures show that those who switched in the last 12 months or are likely to switch in the next 12 months, make up a third of households that recently acquired roof solar panels, this is a significant market of over 120,000 households.”

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