The Australian Energy Market Commission has finalised solar reforms designed to get more small-scale solar into the grid and support the growth of batteries and electric vehicles.
The reforms will put tough new obligations on power network companies to make their networks ‘smarter’. They will now be accountable for getting their businesses solar- and battery-friendly so everyone benefits. A key part of the changes is removing the companies’ ability to put blanket bans on customers sending solar energy back to the grid.
The solar reforms also means power networks can offer a range of options—including a basic free service—to encourage solar owners to limit solar waste, save money and benefit the grid.
The reforms are a long-term sustainable plan to have more customers benefit from solar, put downward pressure on electricity prices and help decarbonise the energy sector faster.
“These new measures to drive smart solar are fundamental to enabling a modern electricity grid that delivers out to 2030 and beyond,” AEMC chair Anna Collyer said.
“They represent a profound change to the way poles and wires businesses must think about how they manage their network and turn the current one-way street delivering power to people’s homes into two-way super-highway where energy flows in both directions. Power network companies will need to deliver services to support solar—and they’ll be judged on their performance on how much solar exports they allow into the grid.”
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The solar reforms acknowledge that Australia has the fastest rate of solar take-up in the world, and reflect concerns from industry, energy market bodies, consumer and environmental groups and other experts that without action, the grid will be unable to handle the volume of solar forecast to double over the next decade. This is already an issue for some solar owners who are being blocked from sending energy back to the grid to avoid daytime supply disruptions. The changes aim to move solar around to when it’s most needed so solar owners can get more from their panels and more solar can get onto the grid.
“By carving a path for smart solar, batteries and electric vehicles, more solar can be used, we will keep costs down for all consumers and protect the value of household solar investments already made,” Ms Collyer said.
“We don’t want to see solar going to waste. That costs everyone more because less cheap renewable energy gets into the system.”
The final reforms also address the diverse views on this issue, including requests for more certainty on what the changes will mean for current and future solar investments.
“We’ve listened to the feedback we have received and have tightened protections for consumers to increase certainty,” said AEMC chief executive Benn Barr.
“This means networks will have to offer a free basic service alongside any paid solar export plans, so people won’t have to pay if they don’t want to. If they choose a paid plan where they earn more at some times and less at others, there will be more ways to earn and save.
“Those with a battery or an electric vehicle could earn for sending energy when it’s needed or save by consuming more of their own solar. There are smart devices and set and forget systems out there now to help customers navigate a more dynamic energy system—like delay start functions on dishwashers, and automated systems that control solar inverters to send energy when it’s most beneficial to the grid and the household budget. All of this can be as easy as using a mobile phone.”
Other changes in the final reform package include giving the Australian Energy Regulator (AER) power to develop a framework to govern how power networks should provide export services to customers and how they must report back. The regulator will need to sign off on all network plans as being in the long-term consumer interest. Each network will retain the ability to develop its own incentives because each has a different customer mix level of solar penetration and congestion, and different government preferences to consider.
The reforms have been met with harsh criticism from Solar Citizens, who said the result would be Australian solar households being charged for exporting their clean energy.
Known as ‘the sun tax’, this rule change will see networks now given the power to charge solar households—previously prohibited under the energy rules.
“This decision to penalise households for sharing their clean solar energy is deeply disappointing,” said Ellen Roberts, Solar Citizens’ national director.
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“We will see less renewable energy in the grid if people are discouraged from exporting or investing in solar panels in the first place. Households now have to pay to export their power while big coal and gas generators get off scot-free. This does not make our energy system fairer.
“The Victorian and Queensland Energy Ministers have stated their strong opposition to charging solar householders in their States. It’s now up to all Energy Ministers to say whether they will implement these rules in their State, or whether they will protect rooftop solar. The ball is in their court.
“South Australia, Tasmania and NSW have also expressed concern at existing solar households being penalised, but this proposal will see existing customers charged for exporting their power in just three years.
“The AEMC has stated that all solar customers will be offered an option not to be charged, but in South Australia, for example, this would slash households’ export capacity to less than a third of what it is now.
“This rule change gives all the power to networks without adequate safeguards to protect consumers.
“Rooftop solar is challenging coal fired power stations and threatening them with early closure. If we want our emissions to go down we need to see more rooftop solar exports, not less.
“We know that Australia’s solar homes and businesses are not only driving down electricity bills but also playing a major role in slashing Australia’s emissions. The sun tax shows Morrison’s ‘technology not taxes’ for the empty slogan that it is. This week Morrison talked up Australia’s world leading rates of rooftop solar while standing by as ordinary households are charged for doing their bit to bring down power prices and emissions.”
