Low feed-in diesel rates frustrate SA households

South Australian households have complained of declining returns on solar energy they contribute to the grid, with electricity regulators saying it has “no value” in the market.

Key points:

• Some energy companies offer less than 4c/kW for energy fed back to the grid
• SA minimum feed-in rate ends in 2017
• Some consumers are investigating options for investing in solar battery systems to save money

The incentive to switch to renewable energy started in SA in 2008.

The first household to install a solar panel is priced at a feed-in rate of 44 cents per kilowatt, which significantly reduces the quarterly bill.

As time went on, more and more households installed solar panels and feed-in rates continued to decline.

Most energy providers in the state offer rates between 5 and 10 cents. But some companies offer less than 4 cents, which causes frustration for customers.

What keeps the rates low?

The state’s Essential Services Commission (ESCOSA) had previously set minimum feed-in rates through 2017, and then energy companies could determine their own rates.

ESCOSA chief executive Adam Wilson said having tariffs regulated stopped people from getting the best deal.

“The true value of the energy delivered is significantly lower than the price you’d see for the cost of use,” says Wilson.

“If the tariff that day was 35c/kW, the value of the feed-in tariff might be 6 cents.

“At that time, the demand for sent-in energy was higher because the national market had not yet switched to renewable energy.

“The market has been moving since then and there is much greater capacity for renewable energy so the value of community rooftop solar has gone down.

“We have observed in the last six months that solar energy has no market value and that will be reflected in the rates offered.”

Incentive to leave the network

Stelios Keliouris works at his family’s chicken shop in Port Augusta and he bought a house last September that has 20 panels and a 7kW system.

He was with AGL and originally had a feed-in rate of 12 cents, but has now been lowered to 10 cents.

“I was initially getting 7 cents, so I called them and they changed me to a different plan, which saves on diesel,” says Keliouris.

“I’m paying more on electricity bills now but I’m getting more pennies on diesel, so it’s worth it, but either way I’m not very happy with the amount of savings I’m getting.

“I might want to invest in a solar battery – I think that’s where you’ll save a lot of money.”

Lilli Bird lives in Port Pirie and has owned the 25kW system for over eight years.

The feed-in rate was initially 16c/kW and was later reduced to 8 cents after the regulation ended.

In recent months, the rate has dropped to 4 cents and Bird said he was not notified of the change.

“Unfortunately, I’m not up-to-date with electric jargon and I don’t know how to negotiate a deal,” says Bird.

“If you don’t really know how to talk turkey to your power company, then you’re probably going to be massively ripped off.”

Tesla battery is installed on the outside of the house.(Provided: Tesla)

Ms Bird is also thinking about investing in solar batteries and taking herself off the grid.

Stuart member Geoff Brock urges solar customers to shop around for a better deal.

“I’m disappointed that the company doesn’t pay anything for the electricity other people generate for them at no cost,” said Brock.

“I don’t think it’s Australian.

“The government should control the resources sector, but I believe the hydrogen power plant in Whyalla will start to stabilize prices,” he said.

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