Solar exports: Should households pay for right to export more solar to the grid? | RenewEconomy

Solar exports: Should households pay for right to export more solar to the grid?

A new proposal to tackle the problem of rooftop has presented itself. This time, it doesn’t come from the regulators or the incumbent utilities, but from progressive consumer groups.

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Rooftop solar exports have been an issue ever since the energy industry ignored the bleeding obvious and under-estimated the numbers of households that would flock to the new technology, and failed to prepare their infrastructure, their business models, and their mindset.

First, there were the moves to reject some installations, or to put a block or a limit on their ability to export back into the grid. Then there was the proposal to hit solar households with an export fee for doing so. More recently, the Australian Energy Market Operator has sought new rules that would allow it to turn off solar exports in the rare occasions it threatens to overwhelm its ability to manage the grid.

Now a new proposal has presented itself. This time, it doesn’t come from the regulators or the incumbent utilities, but by progressive consumer groups, the Total Environment Centre and the Australian Council of Social Services.

They have presented one of three proposed rule change requests that the Australian Energy Market Commission will consider over the next six months, part of the ongoing DER (distributed energy resource) strategy that will also look at battery storage and electric vehicles.

The TEC’s Mark Byrne, a long-serving energy expert who has played a key role in urgent market reform, most recently with the successful introduction of demand management scheme in the wholesale market, says the goal is to ensure all households have the right to export solar back to the grid.

He sees it as a critical part of the transition to a zero net energy system that is rapid, fair and affordable. In short, the More Sun For Everyone proposal puts the onus on networks – through obligations and incentives – to optimise and invest in additional hosting capacity, improve access to the grid and allocate costs more fairly.

This, in turn, Byrne and Kellie Caught from ACOSS argue, should mean that rooftop solar will then be available for all, with no arbitrary restrictions, no penalties for solar-come-lately’s who find the early adopters have taken all the available space for the grid, and options for those who want to export more.

The issue is important because currently there are more than 2.2 million homes in Australia with a total of more than 9GW of rooftop solar. That is not posing any great issues right now, but within a few decades, when the amount of rooftop solar reaches up to 60GW, it’s going to create a management headache for the market operator.

It has already argued for more visibility, and more control, over rooftop solar – both through an upgrade in inverter standards and a change of protocols that allows it to use the solar resource as an asset to manage the grid.

Recently, it presented this slide in a seminar on its own DER plans. What is striking here is that the aggregated amount of rooftop solar will be the equivalent size of 25 of the biggest coal generators currently on the grid (and which won’t likely survive the solar invasion), and that rooftop solar will be meeting half of instant demand on the National Electricity Market (and a whole lot more in some state markets).

Much of the talk about rooftop solar has centred on its “costs” to the grid and to consumers. This usually ignores the benefits, such as the reduction in wholesale prices, and is often labelled as a tax on the poor to fund the rich by those too lazy to do much research.

Byrne estimates that network upgrades are needed to easily cope with increased capacity – upgrades to sub-stations and other infrastructure – but this will likely account for little more than one per cent of total network expenditure.

Byrne and Caught argue that the local networks should prepare a comprehensive 5-year integration strategy that outlines the challenges and opportunities and proposed investments. They should be encouraged to make the best use of existing infrastructure, and to inves in additional hosting capacity when this benefits all consumers.

Importantly, Byrne and Caught argue that all “pro-sumers” (the name for solar households) be allowed to put more of their surplus energy back into the grid. They suggesting amending the legislation prohibiting network charges for DER exports but suggests that pro-sumers be given the opportunity to purchase additional access or capacity.

Byrne says this is an important but subtle difference over the solar “export tax” proposed by sum, and suggested by the AEMC and recently discussed by the Australian Energy Regulator. In effect, he is arguing there should be a basic right to export, but not a right for unlimited exports.

This will also eliminate the situation where some households are not allowed to export at all. The networks are not even revealing how often this occurs, but the anecdotal evidence is that it happens a lot.

How this is done, and the pricing, and the charges, have not yet been suggested. Byrne favours local use of system tariffs, which would result in lower network charges for energy generated close to where it is consumed. He sees this as an important part of the full two way import-export pricing.

Byrne and Caught are seeking to get agreement on the principle of the idea, before working through the pricing details. In any case, it’s unlikely to be put in place until the next round of network revenue determinations scheduled for 2024 and 2025.

In the meantime, Byrne and Caught are looking for extensive stakeholder engagement for the More Sun For Everyone proposal. Other rule change requests are being put forward by St Vincent de Paul and *SA Power Networks, the local grid most affected by the growth of rooftop solar.

*UPDATE: SAPN on Thursday announced its own proposals to support increased and equitable distributed solar uptake. Read the story here.

Listen to TEC’s Mark Byrne and ACOSS’ Kellie Caught in the latest episode of RenewEconomy’s weekly Energy Insiders podcast here.

Read Mark Byrne’s explainer about the TEC/ACCOSS rule change proposal here.

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