Victoria cracks down on discrimination against solar households | RenewEconomy

Victoria cracks down on discrimination against solar households

Victoria introduces new laws to stop energy retailers discriminating against solar households, as both Victoria and Queensland launch inquiries into the “fair price” of solar, and how to encourage battery storage.

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The Labor government in the state of Victoria has announced new legislation that will prevent electricity retailers from refusing discounts to households with rooftop solar arrays.

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There has been increasing anecdotal evidence that solar households – not just in Victoria – have been deprived access to power discounts, have been offered lower discounts because of their connection, or are charged higher tariffs because of their solar arrays.

Victoria energy minister Lily D’Ambrosio announced the move as part of a suite of changes to the state’s Electricity Industry Act, including attempts to protect consumers struggling to pay their electricity bills and facing disconnection.

D’Ambrosio said the amendments would “prohibit retailers from including eligibility criteria in their supply offers that restrict customers who have solar or other renewable energy generation from taking up an offer that would otherwise be available to them.

“That is, while energy retailers may still make electricity sale offers that are specific to solar and renewable energy customers, such customers must also be able to access the same offers as any other customer.

“This will ensure that current incentives for investment in solar and other renewable energy sources are not adversely impacted by energy retailers imposing higher charges for this customer group.”

The Victorian government and the Labor government in Queensland have both promised a review into the “fair price” of solar, in light of moves to cut the feed-in tariff for exports of solar power back to the grid.

In Victoria, it has been cut to 5c/kWh from 6.2c/kWh, and in NSW is has been cut to 4.8c/kWh from 5.6c/kWh, and the tariff is voluntary anyway. Similar cuts have occurred in other states.

The rate of the feed-in tariff is not the only issue. Solar advocates are also upset at rising fixed charges which make it less attractive for households to install solar. For instance, in Queensland, low energy users are being charged the equivalent of 72c/kWh for their electricity, and half of this cost is unavoidable fixed charges.

In South Australia, the network operator is seeking to impose higher network charges on solar households, and in Western Australia, households are not allowed to export solar back into the grid if they own battery storage or an electric vehicle.

The Queensland government recently released its terms of reference into its inquiry, and announced the appointment of Kim Wood, a former head of government-owned coal-fired generator, Stanwell Corporation, as the principal commissioner of the Productivity Commission.

Stanwell has repeatedly complained that solar is reducing its profits and called for solar subsidies to be removed.

Queensland Treasurer Curtis Pitt said Wood would launch an inquiry into electricity prices generally, and also into a “fair price” for solar. Queensland is targeting a doubling in its solar PV numbers to one million homes and 3,000MW of rooftop solar capacity.

“This inquiry will investigate the public and private benefits of rooftop solar, including social, economic and environmental benefits,” he said in a statement. “These inquiries are a key part of our commitment to build the renewable energy industry in Queensland.”

Both the electricity pricing and solar reviews are expected to report in the first half of 2016.

The solar industry has been aghast at the level of feed-in tariffs assigned by pricing regulators in recent years. Some tariffs – in NSW and in south-east Queensland – are voluntary, and in most other states and regions are less than one-quarter of the retail price. In some instances, they are just 1/10 of the peak power price.


The pricing regulators have argued that only the wholesale value of the solar output should be rewarded, along with some avoided transmission losses. To date, they have not credited rooftop solar with any network or environmental benefits, or reductions in wholesale prices. Instead, the cut in wholesale prices is being used to reduce the tariffs further.

This contrasts dramatically with the situation in the US, where most states have a one-for-one tariff, and studies commissioned by regulators there either give a value for solar nearly equivalent to the grid price, or in one study in Maine, at nearly three times the value.

In Australia, however, some think that the question of a FiT is going to become academic, because Australia’s electricity price is so high, and the solar resource so good, that battery storage will become attractive very quickly.

The NSW pricing regulator seemed to suggest that having low feed-in tariffs was a deliberate strategy to make it happen.

With storage, households and business would have no incentive to export back into the grid. That could increase grid stability, but could cause problems for revenue collection for grid operators and retailers, unless they can create new business models such as “virtual net metering” currently being trialled by Ergon Energy.

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11 Comments
  1. Ken Dyer 5 years ago

    What the Victrorian Government also needs to crack down on is the rorting of renewable energy by the big retailers. For example, Simply Energy recently made an offer through RACV. You get a discount of 35% for “normal” electricity, but if you designate any portion of that as renewable, then the discount drops precipitously. So you pay more for renewable energy. This from the mob that owns Hazelwood Power Station, the biggest polluting coal fired energy producer in Australia. Absolutely disgraceful!

    • AngeTKenos 5 years ago

      complicit RACV

  2. Mark Roest 5 years ago

    Re “no incentive to export back into the grid. That could increase grid stability,”
    ever-growing study evidence (most of which I discover in RenewEconomy — thanks!) is showing that wide-scale, distributed residential and business solar exports, can increase grid stability, along with deferring grid expansion and flattening peak loads, so the expensive peaker plants can be ‘mothballed’. It may be that the grid topology needs to be overhauled to a system of islandable smart micro-grids, which can trade electricity among each other as well as with centralized storage, sooner rather than later, but that will be highly beneficial in the long run. It creates resilience in the face of events like Hurricane Sandy (for the US) and wildfires (for both the US and Australia), where transmission and distribution lines can be destroyed over wide areas. Whole systems, long-term thinking is really important here.
    It’s really important to keep the opposing interests of the utilities, vis a vis their customers, in full view on the table. The regulated utilities, in the US at least, are guaranteed a markup over their costs, and it is indexed to their ‘installed rate base’ value, so it is always in their interest to gold-plate the base, and to fight, openly or through subterfuge, attempts to reduce the rate base through energy efficiency, customer or third-party ownership of generating capacity, and, as its life cycle cost becomes cheaper than fossil fuel generation (the sun and wind are free ‘fuel’), renewable energy plus storage to make it available 24/7.
    The interests of the public (the customers of the utility) are now diametrically opposed to the utilities’ interests as they are currently construed. That means that the utilities need to either 1) be persuaded to adopt the new business model of facilitator of distributed ownership of generation and storage resources, which necessarily gives the utility a lower profile, or 2) suffer what the chief of SunPower said: the solar + storage industry rolling up and over them. 2) would not necessarily look like a death spiral; it might look like sea-level rise swallowing up a low-lying city, except it’s positive for the customers, and it helps prevent the actual sea from actually inundating the real city by somewhat slowing global warming.
    The public can stay alert, and not be led into believing that the interests of the utility are their interests, in the event that the utility chooses to fight rather than switch sides / philosophies. Everyone who is clear about the threat of climate disruption can help the rest of the public be clear on this.

  3. Chris Fraser 5 years ago

    I’m sure it’s a good idea to have some industry talent chairing the productivity commission, but why permit (formerly) partisan interests who have publicly demanded removal of solar subsidies ? (Presumably at the same time staying silent on keeping existing fossil fuel subsidies).In case any State is already thinking on it, we don’t really want any more Warburtonesque preconceived ideas.

    • Hendo 5 years ago

      Ah Chris, you are not suggesting apprehended bias here are you?

      Of course there is the old political philosophy that you don’t have an enquiry unless you already know the outcome. In this case the government needs to find a formula that protects their generation and distribution assets, looks like they are green and makes voters happy. All with no loss of jobs. I wonder what they have in mind and who are the winners and losers.

      There are some challenges. But the more disincentives placed in front of home based renewable, the more determined that sector becomes to stepping around grid rates. And the viability of that is rapidly approaching as new cheaper storage options are unveiled. It is also pretty clear that voters are getting better informed to make decisions about power, better than at any time in history.

  4. Andrew_Nichols 5 years ago

    As a solar consultant I have some sympathy for the network operators as feeding into the grid is stupid and causes technical problems with poor grade power being put into the network when its of least use. Far better to have no FIT and get people to go no export, off grid and hybrid. The future of big generators is to supply industry not households.

    • Neil Frost 5 years ago

      That’s just silly.
      Have a rethink.
      Put EV into the equation

    • Jacob 5 years ago

      The quality of the sine way is a concern.

      Can the grid not install batteries to get a perfect sine wave.

    • Chris Fraser 5 years ago

      Are voltage increases from PV export adding to the problem of poor grade ? This might be improved by introducing step change transformers.

    • Mike Dill 5 years ago

      My inverters give me a better signal to noise than I get from the grid. My inverters also provide voltage regulation. So that is not a problem for newer inverters either.
      Older inverters were problems. Those problems have been fixed. Perhaps there is a need to identify those older inverters and get them replaced?
      But you are right, in that we need to self-consume, and storage will be the answer to that. With some luck the utilities will not make the base rate so high that most of us will abandon the grid entirely.

  5. AngeTKenos 5 years ago

    Lily D’ Ambrosio is a very hard working and dedicated Minister

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