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.