Urth Energy offers variable wholesale price for household solar exports | RenewEconomy

Urth Energy offers variable wholesale price for household solar exports

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Boutique retailer Urth Energy offers customers chance to cash in on wholesale rates of electricity when exporting their solar power back to the grid.

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One Step Off The Grid

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Australian solar households and businesses are being offered a new product by a boutique electricity retailer that will allow them to sell their excess power back to the grid at wholesale rates rather than fixed rates.

The initiative, launched by Urth Energy, is said to be the first of its kind – although some software companies like Reposit due offer a trading platform that allows solar households to take advantage of peak prices.

The Urth Energy product, however, is different because the plan doesn’t allow the household to opt in or out of the wholesale price, but to receive the wholesale price for all their exports.
Most retailers now offer between a flat and fixed fee of between 6c and 8c/kWh, and it is not entirely clear that households in all states would benefit from this. Urth Energy admits it is a product only suitable for those who have an understanding of wholesale prices and how the markets worl.

Average wholesale prices around Australia tend to be around 5c-8c/kWh, although the component on most people’s electricity bill is higher than that to allow for a “margin” for the retailer.

But wholesale price during the day time can often be higher, and if the household can target its exports to peak periods, by managing its usage, then it could obtain a significant higher tariff, particularly in states such as South Australia, which have higher wholesale electricity prices.

Interestingly, the 16c/kWh mandated tariff for South Australian solar households ended last Friday, and most will now switch to a tariff of 6.5c/kWh, although the local regulator wants to remove any obligated tariff and “leave it to the market.”

Urth Energy charges a 15% administration fee on all solar feed-in revenues.

Urth Energy direct Richard Hermens admits the scheme will deliver a volatile return. “There will be months where a customer is behind and other months where they will end up in front, some time significantly.”

Retailers that offer a 6c/kWh solar trip guarantees a minimum rate even when spot prices are low, but they also pocket the difference when spot prices are high.

“Urth Trader is a great option for an engaged grid-connected solar system owner who wants to take on this risk themselves and be an active player in the energy market,” he says.

“The principle behind Urth Trader – that ordinary consumers can also be energy producers – also opens up a whole world of possibilities related to Australia’s burgeoning battery storage market.”

The company says that solar is worth the most when it is consumed ‘behind the meter’ (e.g. directly, in the building where the energy is produced), where it offsets grid price of around 30c/kWh.

Solar exported to the grid ordinarily has little value. “In allowing customers direct access to the wholesale market, Urth Trader delivers a new level of transparency to solar feed-in valuation, which has long been a contentious issue in Australia,” it says in a statement.

“Furthermore, Urth Trader allows ordinary homes and businesses to proactively engage in the market as generators, putting them in a position to take advantage of high-price events when they occur by switching off devices (load shedding) to let their solar to flow into the grid.”

Urth Energy also offers retail plans for multi tenant property owners, that delivers solar electricity and guarantees savings for the tenants, while managing all the energy systems on behalf of the property owner.

Urth Energy’s also offers a range of products including a no-money down leasing arrangement for a solar system, embedded networks for multi-tenant buildings, and fixed feed in tariffs of 10c/kWh for customers with existing solar systems, or 20c/kWh for customers who have their systems installed by one of its energy partners.

On its website and promotional materials, Urth Energy’s says it is a solar focused retailer with some 200MW of solar projects in the pipeline. “Our mission to promote renewable energy savings, sharing the profits with customers, not sponsoring stadiums.”

This article was originally published on RenewEconomy sister site One Step Off The Grid. To sign up for the weekly newsletter, click here.  

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6 Comments
  1. Ian 4 years ago

    This development of Urth is probably worth following. The idea of small scale solar generators participating in the wholesale market is welcomed . To develop a proper electricity market place there has to be no limitations of quantities of electricity exported nor on timing or generation type of electricity. If people choose to export battery-stored electricity at a higher KW value for a short period at the time of high wholesale prices than that should be allowed. Equally, arbitrage of electricity using battery storage should be allowed. The possibility of exporting distributed fossil fuel generated power should also be allowed. Control of electricity generation type , quantity or timing should not be the prerogative of the grid operators but rather of council or district by laws. To take this to an extreme . A person wanting to export 100KW of electricity for 1 hour from a petrol generator should not be prevented from doing so by the grid operator. The only factor limiting this behaviour should be the wholesale price of electricity.

  2. MaxG 3 years ago

    Looks like a scam to me… in QLD the MW hovers around the 30$ mark during the sunny day … in the evening peak around $120… this is a FiT (if linked to spot price) of 3 to 12 Cents. At least during the solar-generation time this will be a loss compared to 6 Cents fixed…

    • Urth Energy 3 years ago

      Hi Max,

      Urth Energy is up-front that self-consumption is still the best way to save money with solar, as you’ve noted. There isn’t a non-incentivised feed-in tariff (i.e. one backed by the state) on the market that offers rates higher than higher than what most electricity consumers pay to their retailer per kWh (on flat, block & peak tariffs). All modern-day feed-in tariffs are therefore something of a ‘bonus’ on top of the self-consumption savings.

      What Urth Trader does is to unlock the potential for ordinary households to take advantage of the variability in rates and respond accordingly. It also offers transparency into solar feed-in valuation, so that customers know that their exported solar energy’s value is being pinned to something concrete and objective (if variable).

      Urth Trader is not for everyone, which is why we also offer a few other plans with fixed feed-in rates for customers who do not feel that Trader is the right fit for them. Urth Trader is, however, a unique product on the Australian market with potential to help solar homes complement their self-consumption savings by taking changes (or proactively interacting) with the wholesale market. As energy management systems become more advanced, these interactions have the potential to become more sophisticated and automatic, increasing the value of exported solar energy even further.

      We’ve written a more in-depth piece about the implications and significance of Urth Trader in our blog if you’re interested:

      http://urthenergy.com.au/index.cfm?module=blog&pageMode=dosearch&topic=Solar-homes-and-businesses-can-now-sell-their-energy-wholesale-with-Urth-Trader&page_id=569099

      • MaxG 3 years ago

        Understood, and I appreciate your response! 🙂
        What all this highlights is: a) electricity is cheap (when we omit the peaks for a moment); b) the consumer is clearly taken for a ride considering what they pay for the kWh.
        But then, we, or at least I, knew that 🙂

        • Stewart Rogers 3 years ago

          That’s not entirely true. Why should they pay more than 6 cents per kWh when the avg grid price for say Victoria is $55/MWh? The fact is most of the peak power usage is in the afternoon when solar isn’t producing as you noted. Also during the summer many solar users would be using the power themselves to run aircons.

    • MaxG 3 years ago

      For all it matters, I signed up as FiT10 customer 🙂

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