Solar tax debate needs government intervention, not a push-poll

Energy Consumers Australia (ECA), an organisation that you and I fund through a mandatory levy on our electricity bills, has released the results of a survey of electricity consumers to assess whether consumers support the AEMC’s proposals to charge solar households to export to the electricity grid.

In its press release ECA noted that “Opposition to these changes has been loud but we wanted to know how widespread and deeply felt it really was among the Australian community”.

So they commissioned a survey to find out.

They said they were “genuinely surprised” by the “overwhelming positive sentiment”. They attribute this to their communication of AEMC’s proposed changes in “neutral and unemotive language”, unlike the way that ECA says the media has treated the AEMC’s proposals. As a result of their survey, ECA now concludes that the issue here is an “information gap” that, if not addressed “can be filled with uncertainty, anxiety and suspicion”.

So, what is the “neutral and unemotive language” that ECA communicated to the survey participants? Well, they told the participants that there was a problem of “solar overload” and that AEMC had proposed that “solar customers earn more from exports at times when solar energy is needed and less at times when there is too much solar energy for the network to handle“.

How much less I hear you ask? Well, they said AEMC said that the average solar home gets $900 each year when it exports and it will get 8% less “if they don’t change how much and when the (sic) export”.

If this was the truth of the matter I reckon I would have said fair enough. I mean “solar overload” sounds pretty nasty and 8% of $900 is not a big deal.

But is this the truth of the matter? Let’s leave to one side the dubious claims of “solar overload” and 8% and let’s just focus on the $900 here. Our analysis of the actual electricity bills of 7,212 solar homes in Victoria finds the average solar home exports 2.2 MWh per year. To get $900 from these exports, would require a feed-in price of 42 cents per kWh. But the Essential Services Commission of Victoria has just set a regulated rate of 6.7 cents per kWh.

In New South Wales, their regulator reckons the right number is between 4.6 and 5.5  cents per kWh. Even if we assume an export volume of 5 MWh per year (as AEMC does) the mid-point (5 cents per kWh) still only gets you to $250 feed-in income per year – less than a third of their $900.

What would the survey reveal if ECA had actually told the participants the truth and then asked their response to that? A truthful survey question would go along these lines:

“Research finds that typical solar homes in Victoria can expect to earn $147 per year from their rooftop solar grid exports, at the regulated feed-in rate. It is not clear how much AEMC is suggesting the average solar home should pay to relieve “bottlenecks” that it attributes to rooftop solar, but analysis of their proposals suggests it lies between 2 cents and 4 cents per kWh. In Victoria this would leave the average solar home with net feed-in income of between $59 and $103 per year. The AEMC assumes the average solar home exports 5 MWh per year in Sydney, in its analysis. At the regulated feed-in rate, AEMC’s proposals would reduce solar feed-in income from $250 per year to between $50 and $150 per year.  We should also point out that AEMC’s claim of bottlenecks is contested and that network service providers have not proposed large amounts of expenditure to resolve the bottlenecks, if they exist. Do you support AEMC’s proposals?”

How would you answer this?

Of course, this draws attention to the question of why ECA has so obviously failed to ask a truthful question in its survey? Did ECA not realise that the average solar home gets nowhere near $900 feed-in income, or that claims of bottlenecks are contested, or that network service providers have not proposed large amounts of expenditure in order to deal with bottlenecks if indeed they exist?

This issue has had so much attention, you would have to have been living under a rock not to know these things. ECA surely has not, so I will not allege incompetence or ignorance. Instead, worse, this reeks of Trumpian disregard for evidence or independence. Push-polling is the stock-in-trade of lobbyists. ECA seeks to set itself above such riff-raff: it describes itself as an “independent national voice” that distills “evidence-based research”. Or so it says. Sir Humphrey sums it up better than I can.

Let me conclude by drawing attention to the bizarre hypocrisy here. Ausnet Services says integrating distributed energy will cost customers 72 cents per household per year. The other distributors are in much the same ball-park. ECA, St Vincent de Paul and ACOSS rail at the great injustice of this.

But the good burghers of New South Wales will be paying an additional charge of $27 per household per year for the next 60 years to fund Snowy Hydro’s Humelink transmission line, of which Snowy Hydro will pay not a penny. Hydro Tasmania and Tasnetworks will be pushing for even more with Marinus. And what has ECA, St Vincent de Paul and ACOSS had to say about this? Not even a tiny peep.

This is ridiculous. Responsible governments should be demanding an explanation of why supposed customer and welfare advocacy has gone so badly off the rails.