Solar and battery households will be biggest losers from network tariff changes, advocates say

Plans to increase the fixed network cost component of electricity bills will punish the vast majority of Australian energy consumers, renewable energy advocates are warning, with the biggest losers set to be solar and battery owners and low-income households that use the lowest amount of power.

The Australian Energy Market Commission (AEMC) is proposing a change to electricity network tariffs that would result in a higher share of fixed charges, as part of a series of electricity pricing reforms published in a draft review in December. 

Network tariffs are a mix of fixed and variable costs paid for connection to the distribution grid that are charged to electricity retailers then passed on to consumers, often accounting for up to 50% of the final bill.

The AEMC argues that while the shift to dynamic pricing has created winners – those who invest in solar and storage and are able to adjust their energy use to proactively engage with price signals – it has created losers, too, disadvantaging customers like renters and high-use households with no means to cut grid power consumption or to change behaviour.

And it thinks that a higher fixed network tariff, that charges the same set fee per billing period per customer, regardless of how much electricity they do or don’t use, would even out the ledger.

But a final flurry of submissions to the draft review – with the latest round of consultation due to close at the end of this week – has underscored strong opposition to the proposed reform, as a move that would have “serious and far-reaching consequences” for households, energy equity and industry.

“This is a proposal the Smart Energy Council strongly opposes,” Smart Energy Council (SEC) chief advocacy officer David McElrea said in a submission shared with Renew Economy last week.

“Households that have taken action to reduce their energy costs and emissions would see those efforts devalued, as a far greater share of their electricity bill would no longer respond to how or when they use electricity.”

In a separate submission, Solar Citizens says it is concerned that higher fixed charges will burden households with low grid consumption while providing the most benefit to the poles and wires companies.

“Adopting this recommendation would punish most energy users by raising fixed charges,” Solar Citizens CEO Heidi Lee Douglas said in an emailed statement over the weekend.

“The biggest losers will be 1) solar and battery owners and 2) those who consume the lowest amount of energy – including energy-efficient households, single person households, apartment residents, and people doing their best to keep their energy bills low because of cost of living pressures.”

Douglas cites research from Green Energy Markets, which finds that a household with a solar and battery system (8kW PV, 20kWh storage) would see their electricity bill increase by around $400 to $700 a year as a result of the proposed tariff changes. 

The Green Energy Markets (GEM) research is teased out further in this scathing analysis by GEM analyst Tristan Edis, who also criticises the AEMC tariff proposal as a “Robin Hood scheme in reverse.”

“What the boffins in the AEMC don’t seem to realise (or have perhaps chosen to ignore?) is that low income households consume noticeably less electricity than high income households,” he writes on Renew Economy, here.

“What this analysis illustrates is that the low income consumer will be noticeably worse off under the AEMC proposal, facing an increase in their annual power bill of anywhere between $127 in Endeavour’s network [in NSW] to as high as $217 in the [South Australia] SAPN network.

“Meanwhile a high income, large electricity consumer would be a major winner out of the AEMC’s proposal.”

Other notable opponents to the tariff change include US electric vehicle and home energy giant, Tesla, which in earlier rounds of consultation said static network tariffs were part of a “legacy model of passive consumption” that now act as barriers to innovation, consumer engagement and CER-enabled market efficiency.

“While we support the foundational principles of retail competition and price regulation, the current frameworks are no longer fit for purpose in a CER-rich future,” Tesla senior energy policy advisor Emily Gadaleta writes in the July 2025 submission.

And in a submission published in December 2024, Gadaleta elaborates:

“In Australia, customers are already making their own investments to capture the benefits of the energy transition for their own households and their community.

“Disillusionment has been bred when products and services that customers have invested in are not valued in the same way by the market, or the rules of the game change, directly affecting the value of that asset to the customer.

“These customers have invested in their own assets for financial and grid independence reasons, as well as helping their community and broader decarbonisation goals. However, the prevailing narrative by the industry is often to view CER as something to manage, rather than an opportunity to leverage.

“As an industry we must not stifle consumer ambition by transferring misplaced risk allocation to those making the investments themselves,” she writes.

The AEMC says written submissions responding to the December draft report must be lodged with the Commission by 13 February, 2026.

Stakeholder responses to the draft report will inform consideration of final recommendations, which will be published in a final report in the second quarter of 2026.

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