Electricity greed turns net zero to ash

Ausgrid’s recent announcement to penalise solar panel owners is nothing more than corporate greed and profiteering - a retrograde step in combating climate change. These ‘big-brother-corporate-thieves’ now believe that rooftop solar production should not only be provided to them free-of-charge, but homeowners and businesses should be charged for the privilege of doing so as from 1 July.

22 May 2024

ALAN HAYES

 

THE question that needs to be asked over Ausgrid’s two-way tariff revelation: is it simply a policy driven by a cash-strapped government or is it a case of corporate greed and a reluctance to invest in upgrading the poles and wires? Surely there is a better solution? One that will certainly not stop homeowners and business investing in solar panels.

 

Ausgrid’s new policy makes a mockery of the federal government’s push for more solar panels and home batteries, turning their ambition to reach a net zero economy into ash.

 

By what right does Ausgrid believe that homeowners, who have invested in solar panels to reduce reliance on fossil fuel power generation, should provide them with free energy and be taxed for their excess power into the grid? This power benefits those people who cannot afford a solar system. And, why should homeowners with solar panels be forced into investing into battery storage to prop up an aging and ill-maintained grid system, just so that Ausgrid can maintain peak electricity supply?

 

A home battery storage system is still expensive to purchase in NSW and out of the financial reach of most homeowners. Unlike every other state in Australia, which offer battery purchase rebates of up to $5,000, NSW offers no financial incentive for homeowners to purchase a battery to store excess solar power generated during the day for night-time use.

 

Ausgrid says, however, it has 280,000 customers with solar panels – ranging from eastern parts of Sydney and coastal regions to the north and south – and expects 180,000 more to have them by 2030. They also say that the charge of 1.2 cents/kWh for household exports between 10am to 3pm is only a modest impost – an annual cost of $6.60 for a typical customer. Yet multiply that modest impost by the current 280,000 customers and it’s a nice additional earn of $1,680,000 – larger rooftop solar systems above the typical five kilowatts would add even more of a financial benefit to this shameful tax.

 

Ausgrid believes it’s likely the two-way tariff will have a “very small impact” for most solar owners. In an example given by them, a system sent 307 kWh into the network between 10am and 3pm for the month of November, when there is a “free threshold” of 205 kWh. The customer is charged for 102 kWh, which Ausgrid says is $1.19 for the month. On the reward side, the customer has sent 52 kWh into the network after 4pm, earning $1.21; the overall result is a credit of 2 cents (spend it wisely so that penury doesn't come knocking at your front door).

 

During the winter months, the amount exported during peak demand periods will be very little. But Ausgrid says, that providing the retailer has fully passed through their two-way tariff, a typical solar customer with a 5kW system could then see an annual bill increase of only $6.60 per year.

 

“It’s a very tiny signal we’re sending,” a spokesperson said. Even then, despite Ausgrid’s claims, some customers may not get a rebate at all, as it will be up to retailers to pass on the charge – not all will, which is the expected scenario.

 

The extra charge might not sound like much, but that’s just the starting point. These charges, just like the daily service availability charge, are likely to go up over time and for many families and businesses struggling with the rising cost of living - it’s the last thing they need.

 

Ausgrid’s arguments to implement the charge has more holes in it than a thick triangle of ‘Swiss cheese’ and quickly falls over. They claim that the grid is not capable of handling a two-way system during the day, yet, to allegedly solve the problem, have to charge a fee to keep the grid on track. But after 3pm, everything changes – they’ll happily take your power during peak use. A policy that smacks heavily on introducing, what others around the world have sought to do over millennia - a communist philosophy.

 

Many of you may not remember, but the daily service charge, which was supposed to be used for maintaining and improving the electricity network, started at twenty-cents. The charge is now around $1.28 a day, with no credit offered when there are power failures for extended periods. And just like this charge, the privilege of supplying free power to Ausgrid, and being charged to do so, because they seem deluded that all their solar customers are philanthropic, will see continual increases to the feed-in charge – along with the obliquity excuses.

 

Ausgrid’s other justification for the charges was to encourage solar owners to use more electricity during the day and export solar in the evening. But how many working families will be able to shift their main electricity use to the middle of the day and afford a battery so they can export electricity at night?

 

But for homeowners exporting power from their battery at night, when grid demand is high, is also tantamount to electricity theft – being paid 2.3 cents/kWh, while having to pay around 73-cents/kWh during peak period and around 35-cents/kWh for off-peak for any power buyback. Continually draining and recharging batteries, as proposed by Ausgrid, shortens battery life - not a concern for Ausgrid, because they won't be paying to replace it.

 

To rub even more salt into the 'homeowners wound', Ausgrid want to control your solar and battery system remotely. Homes with solar panels and battery systems have borne all the risks - installation and ongoing maintenance costs, yet Ausgrid wants all the control and benefits of home electricity generating systems they do not own.

 

And what has the State Government done about this? They had an opportunity to stop these charges from being implemented, yet they sat on their hands and did nothing. NSW’s energy minister, Penny Sharpe, told ABC Radio that “we need to make sure that the grid is stable into the future”. Her excuse for allowing the energy company to garner free energy from home-solar-rooftops was that households were already saving $600 a year on average power bills.

 

Penny Sharpe’s comments, however, are not a $600 for-all-windfall! To be eligible for the rebate in a given financial year, you must: be a NSW resident; be the account holder with an energy retailer; have been the recipient of the Family Tax Benefit (FTB) for the previous financial year and have had your entitlement to the FTB payments finalised by Centrelink.

 

So why, by contrast, did the Albanese government announce last week that all households would get a $300 energy rebate? Because the cost-of-living crisis has people doing it tough!

 

Had the daily service availability charge been used for the purpose it was originally implemented for, instead of going into the coffers of successive state governments, then we would not be facing a future grid crisis as the Minister has claimed.

 

Ironically, Ausgrid’s own data shows that the vast majority of their network can accommodate more rooftop solar, but they want to start slugging people now because by the end of the decade there might be grid issues that arise. That’s not good enough!

 

Dylan McConnell, an energy expert at the University of NSW, said charging for exports during the sunniest part in the day was “a long time coming” and had been encouraged by the regulator.

 

He said it was “contestable” as to whether there is too much solar energy in the middle of the day. However, the equity issue – of households with solar enjoying a cross-subsidy from those without – would get worse over time.

 

So, if we are to accept Mr McConnell’s philosophy, those people who have been prepared to invest their hard-earned money into a greener future for everyone should be punished because electricity networks have not been upgraded and adequately maintained. And let’s not forget, the cost of buying this home-produced power, which those without solar will benefit from, is at a ridiculously cheap rate – the current feed-in tariff rate is around 7-cents/kWh.

 

Ausgrid’s new two-way tariff is designed to do no more than punish solar panel owners who produce excess power into the grid. Power that is sold on average at a retail rate of 44-cents/kWh during the shoulder period from 10am to 3pm - even higher during the peak evening period.

 

Ausgrid has more moves than an octopus in a wrestling match

 

There is little doubt that Ausgrid do not want to invest large amounts of money in upgrading the electricity grid system. And the irony of it all is that Ausgrid is looking to install more rooftop solar as a way of saving money on network investment and to offset some of the billions of dollars it spends on replacing aging network infrastructure.

 

Rooftop solar – along with battery storage – is the core of the development of renewables based micro-grids, which, according to Ausgrid, offer a more secure, reliable and affordable mini-grid. An exciting prospect for the Ausgrid bean-counters as a way of replacing the aging network infrastructure, reducing eighty per cent of their operating expenditure over the next decade, while they unfairly squeeze money from home solar and battery installations.

 

Rooftop solar on industrial rooftops is being targeted because it would coincide with the actual demand from the business activities that take place under the rooftop, hoping that it may lead the way to more innovative solutions, such as peer to peer trading and local micro-grids.

 

Ausgrid is allocating up to $2 million for this trial to see if encouraging more rooftop solar in a certain area can help defray its costs. Coincidently, the cost of the trial is around the additional revenue Ausgrid expects to raise from its two-way tariff in the 2024-25 financial year.

 

They are offering incentives of $250 per kilowatt installed to encourage the installation of solar on the rooftops of warehouses and other industrial facilities. However, the cost of industrial premises roof top solar systems, without installation costs and battery provision, is around $850 to $1100 per kilowatt. This leaves a sizeable chunk of money that has to be invested by those people who own the commercial and industrial premises. There has been no mention from Ausgrid as to who is responsible for the ongoing maintenance costs. It would hard to imagine that Ausgrid would be willing to pay for those ongoing costs.

 

After taking into account the premises own use, free electricity is still be provided to the grid at a high cost to the owner of the premises. Hardly a win-win situation for both parties – Ausgrid come out smiling, paying a pittance toward infrastructure, while the brunt of the cost of providing electricity to the grid comes from private enterprise.

 

There’s been many confidence tricksters throughout history, but the Ausgrid shell game must rank up there with the best.

 

Wouldn’t it be better for Ausgrid to expand its investment into building more local batteries instead, into which home owners could sell their excess solar power to be stored so that it can be supplied during peak demand at night?

 

What will Ausgrid’s new policies lead to?

 

Ausgrid’s encouragement to use the excess power from your home solar system during the day is not the answer. As one Grapevine reader said: “I don't know if inverters can be set to limit export. So, fire up that two-kilowatt heater, boil water until it evaporates, vacuum the cat, run crypto mining, do anything to consume the power on sunny days than export it.”

 

Another reader went further on to say: “Electricity is cheap if you are an energy provider. They will charge you to give them energy during the day, then at night they will give you 2.3-cents/kWh after 3pm if the sun is shining, or from your battery, for what they take from you. Meanwhile, you are charged 73-cents/kWh during peak period and 36-cents/kWh during off-peak if you buy back from the grid.

 

“Welcome to the greatest con - put solar on and pay for the privilege. Or pay another $10K and install a battery, which will gives you 10kw of power at best.

 

“If you have a battery, why would you export power to Ausgrid at 2.3-cents/kWh, when later that night you would pay them to buy it back at a massively higher rate to run your heater etc."

 

And who owns Ausgrid? The peoples friend - 49.6% owned by the NSW Government, 8.4% owned by Australian Super, 25.2% owned by IFM Investors and 16.8% owned by APG Asset Management Group. Ausgrid's strong shareholder base is unique – majority owned by the NSW Government.

 

And what did the NSW State Government have to say? Minister for Energy, Penny Sharpe would not comment.

 

So, what can you do?

 

If you’re not interested in the pittance that you currently get paid as a feed-in tariff, don’t give Ausgrid any power.

 

Engage a licence solar installer to adjust your system so that you don’t feed excess power into the grid during the day from your solar panels. If you have a battery, you can also prevent Ausgrid from accessing it as well.

 

Most modern solar inverters, however, can be export-limited, so the power they send into the grid is throttled. The kilowatts exported can be changed and even set to zero. The feature can be turned on or off but usually has to be manually enabled through the installer portal.

 

Another option is the ‘Catch Control’. The Catch Control (formerly Catch Solar Relay) is a great way to divert surplus solar to a high-energy appliance such as a hot water system (HWS), minimizing solar exports. It can also export limit compatible inverters.

 

Here are a couple of options to deal with export tariffs using time-based control and a catch relay.

 

• All inverters: Configure the ‘Export mode’ in conjunction with ‘Top-up mode’ to come on during the hours you want to avoid exporting. This will send surplus solar to your HWS, or whatever load you have wired in. It won’t throttle the inverter however, and some energy will, no doubt, be exported.

 

• Catch Control compatible inverters: The latest version of Catch Control can export limit (including zero export) a growing list of inverters. You can use a time schedule via the Catch app to set a zero export between 10am and 3pm.

 

Take charge of your home-produced power – it belongs to you, not Ausgrid!