Rooftop solar power is no longer a 'middle class fortune' - now a windfall for power companies, says Conservation Council
Queenslanders with rooftop solar panels are effectively subsidizing power companies, according to Queensland Conservation Council (QCC) energy engineers.
Key points:
- Energy retailers save millions of dollars per month because of rooftop solar, says Conservation Council
- Loganholme resident David Baggs says feed-in rates are “bad”
- The Australian Energy Council says feed-in rates are already high enough
The feed-in rates paid to households exporting electricity are well below wholesale prices, meaning retailers save millions of dollars per month, said QCC energy strategist Clare Silcock.
“Because the prices are so high, we’re seeing massive subsidies,” Silcock said.
“It’s a bit of a change from what we’ve heard historically – that feed-in tariffs have benefited the middle class and channeled subsidies to people who can afford to install solar panels on their roofs.”
In Loganholme, south of Brisbane, David Baggs earns 7 cents per kilowatt hour for the electricity he delivers to the grid.
Last month, the average spot price for electricity in Queensland was 40 cents per kilowatt hour, according to Energy Market Operators Australia (AEMO) data.
“This is very bad,” said Mr. Baggs.
He plans to cover his house with more panels and install batteries so his house can be off the grid.
“Renewables need to be able to get recognition for what they can produce and be properly named for it,” says Baggs.
‘They are paid a fair price’
But the chief executive of the Australian Energy Council Sarah McNamara said the tariffs were quite high.
“They were paid a fair price based on the true value of the electricity at that time. And each retailer made a judgment about the value of that electricity,” McNamara said.
“Of course, if you generate excess electricity in the middle of the day, you will be competing with a lot of other solar PV units, so they will likely cost less than other times of the day.”
“There’s a lot of sun and wind to be had on sunny and windy days, and that tends to ensure that the value goes down somewhat because we have a lot of supply.”
Queenslanders who applied for rooftop solar from 2008 to 2012 received an entry rate of 44 cents per kilowatt hour, under the Bligh government’s incentive to encourage the use of solar panels.
That rate remains locked in until 2028 for people who remain on their property. It cannot be passed on to the new owner.
For others, the returns are much lower.
In regional Queensland, feed-in tariffs are regulated.
On July 1, the Queensland Competition Authority (QCA) raised it from 6.6 cents to 9.3 cents per kilowatt hour.
QCA chairman Flavio Menezes said this was 41 percent higher than last year’s feed-in tariff.
Professor Menezes said the increase largely reflected an increase in wholesale energy costs.
“However, retailers still bear most of their normal business costs, including retail operating costs and network costs,” he said.
“That’s why the feed-in solar tariff is lower than the electricity price you pay.”
In southeast Queensland, the market dictates the rates and people with solar panels are advised to shop around for the best returns.
McNamara said feed-in rates have historically increased, and increasing them would increase the bills of customers without diesel.
“In the years gone by, the government has had exorbitant feed-in tariffs that are well above the true value of the electricity fed back to the grid,” he said.
“The state government is very interested in encouraging the use of solar.
“Unfortunately it creates high expectations from households about the value of the electricity they are pushing back into the grid.
“If they’re not regulated fairly, then all customers have to pay that price and bear those extra costs.”
But Ms Silcock said if rooftop solar was not in the energy mix, demand for fossil fuel generators would be even greater, driving up prices further.
He said even in September, when solar power generation was high, rooftop solar provided $2.5 million worth of “free” electricity in Queensland.
“That’s because the energy that [rooftop solar] Indeed, the supply must be from gas, if it is not fulfilled by diesel,” he said.
“When we need extra electricity, what we rely mainly on is extra gas and which has a higher cost.
“In the 2021-22 financial year, we calculated an average of $30 million of free electricity from Queensland’s solar rooftops per month.”
However, McNamara disagreed with that analysis.
“The idea of a feed-in tariff is to replicate the true value of electricity that retailers would otherwise buy in the wholesale market,” he said.
Ms McNamara said people with rooftop solar should use as much electricity as possible when the sun is shining by running “washers, clothes dryers and the like in the middle of the day”.
He also recommends buying batteries to maximize the value of a domestic solar power system.
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