Is AGL’s ‘solar savers’ 20c feed-in tariff a good deal?

If I were to ask:

“Would you like a 20 cent feed-in tariff for the electricity your solar system sends into the grid?”

Chances are at least some of you would reply:

“A whole 20 cents?  That’s more than what I’m getting now, so yeah, baby!  Yeah!”

You may not reply exactly like that, but there are plenty of people who’d be glad to snag themselves a 20 cent feed-in tariff, as there aren’t many that high around these days.
If you’re interested an AGL Solar Savers plan can provide it to you — if you live in South East Queensland, NSW, Victoria, or South Australia and have a solar panel capacity of 10 kilowatts or less.
But beware! Retail electricity plans with high solar feed-in tariffs come at a high price!
Quite literally. They charge a high price for the grid electricity you use.
Solar Savers doesn’t have the discounts AGL usually gives their plans, so you will pay more for grid electricity in return for its 20 cent feed-in tariff.
But if the amount of surplus solar electricity you export to the grid is high enough in comparison to the amount of grid electricity you use, you can come out ahead.
For households with over 5 kilowatts of inverter capacity Solar Savers compares well with other high feed-in tariff plans and it may still be worthwhile for those with inverters of 5 kilowatts or less.

Why I am giving AGL free advertising

The reason why I’m giving AGL free advertising with this article is because AGL themselves don’t draw much attention to their 20 cent feed-in tariff.  Information on it does appear on their site but it does not make it clear how tariff options depend on what type of electricity meter people have.
It also appears they often don’t make information about it available to online tools1 for comparing electricity prices2.  So there may be plenty of the people out there who could benefit if they knew about it.
It’s possible AGL gives it a low profile because they don’t want too many people taking up their Solar Savers plan and if demand rises they may stop offering it.
But it lasts for two years and has no exit fees, so if you get it now you will be set for a while without being locked in – and if it becomes unavailable to others you can always blame me for killing the golden goose.
However it increases how much you have to pay for grid electricity so it may be more of an aluminium goose than a golden one3.

If you have a smart meter you are not free to choose a standard tariff

A drawback of the Solar Savers plan is you are not free to choose a standard tariff if you have a smart meter.  You will be limited to either a time-of-use tariff or a demand tariff.  This is unfortunate as solar households are usually better off with a standard tariff.

The solar savers feed-in tariff can be far higher than usual

Here’s how AGL’s usual feed-in tariff stacks up against Solar Savers’ 20 cents:

t’s over 75% higher everywhere except South Australia. The precise percentages are:

  • SA:  23% higher
  • SE QLD:  89% higher
  • VIC:  77% higher
  • NSW:  80% higher

Grid electricity charges are higher with Solar Savers

Generally AGL residential plans come with discounts that reduce the cost of electricity. Looking up comparable AGL plans, such as their Residential Saver that also doesn’t have an exit fee, I see the discounts you will miss out on are:

  • SA: 11%
  • SE QLD: 26%
  • VIC: 30%
  • NSW: 20%

Unfortunately, these discounts don’t apply to your entire bill. They just apply to the kilowatt-hours you purchase and not the fixed supply charge portion. They also don’t apply to all your kilowatt-hour charge.
Because AGL and most other electricity retailers are eldritch Lovecraftian abominations that dwell in dimensions with non-Euclidian geometry, they only apply the discount to the first 90%. This means the actual discounts on kilowatt-hour charges are:

  • SA: 9.1%
  • SE QLD: 22.7%
  • VIC: 26.4%
  • NSW: 17.3%

If I express those figures as a percentage of the full price you have to pay and shove them in a graph we get:

 
Because of the higher cost of grid electricity, Solar Savers plans will only pay for themselves if a home exports enough solar electricity.
Working out the point it will pay for itself isn’t too difficult for a standard tariff, which are unfortunately only available to homes that don’t have a smart meter.

There is no standard tariff Solar Savers plan for those with smart meters

There are three types of electricity tariff in Australia:

  1. Standard tariffs:  These charge a flat rate for each kilowatt-hour of electricity used and are usually the best for solar households.
  2. Time-of-use tariffs:  The amount charged depends on what time of day the electricity is used and can be charged at peak, shoulder, and off-peak rates.
  3. Demand tariffs:  Households suffer an additional charge based upon how much power is drawn at certain times.

The type of tariff you can get with a Solar Savers plan will depend upon what kind of electricity meter you have. You can only have a standard tariff if you don’t have a smart meter.
If you do have a smart meter then you can only have a Solar Savers plan with a time-of-use tariff or a demand tariff. This is despite the fact that a smart meter is quite capable of supporting a standard tariff4.
Since the first of December last year all newly installed electricity meters have had to be smart meters. So if you’ve had a solar power system installed since then you’ll have one.  (Unless you are still waiting for it to be installed.)
If you haven’t had a new meter installed since then, chances are you don’t have a smart meter — unless you are in Victoria where pretty much everyone has one.

AGL’s website does not make tariff conditions clear — but agent Christopher does!

If you try looking up the energy price fact sheets for Solar Saver plans it is confusing.
In Victoria where just about everyone one has a smart meter they have a standard tariff plan. In South East Queensland and South Australia where smart meters are rare they don’t have standard tariff plans.
To clear this up I contacted Christopher who is an Agent of AGL.
Agent Christopher explained the tariffs types available depend on what type of electricity meter you have and not what type of plan is shown on their site. If you want to read my extremely exciting and not at all incredibly boring conversation with Agent Christopher I’ve put it below:

It’s a pity that AGL’s site isn’t clearer. It would have saved me time and no doubt Agent Christopher has more important things to do such as make love to Vladimir Putin and foil the plans of beautiful women.
If only there were some way to inform AGL of the problem… I know! Maybe if I shout loud enough they’ll hear me!
Hey!  AGL!  Every time someone calls you or uses your chat service it costs you money!  If you make the information about your Solar Savers plans clearer on your website you’ll save a few bucks!
Of course it’s always possible they don’t want many people using it…

The Solar Savers break even point

If you are on a Solar Savers plan with a standard tariff in a state capital then the lack of discounts will cause every kilowatt-hour of grid electricity you use to cost you this much more:

  • Adelaide: 3.78 cents more
  • Brisbane: 6.37 cents more
  • Melbourne: 7.84 cents more5
  • Sydney: 5.50 cents more

But you will earn this much more in feed-in tariff for every kilowatt-hour of solar electricity you export to the grid:

  • Adelaide: 3.7 cents
  • Brisbane: 9.4 cents
  • Melbourne: 8.7 cents
  • Sydney: 8.9 cents

So in Adelaide you must export over 1.02 kilowatt-hours to the grid for for each kilowatt-hour of grid electricity you use for a Solar Savers plan to be worthwhile.  Because I’m in a graphy sort of mood today here’s a graph of the break even points for the four capitals:

As the graph above shows, in Adelaide you’ll need to send more electricity into the grid than you take from it for a Solar Savers plan to be worthwhile, while in Sydney you’ll only need to export solar electricity equal to 62% of your grid consumption.
I made Melbourne a lighter shade of blue than the other cities in the graph because this result is for a Solar Savers plan with a standard tariff which is only available if you don’t have a smart meter and almost everyone has one in Victoria.

Required solar system size

Households with electricity consumption that is around the average for homes with little or no gas uses will need solar power systems of roughly the following sizes to export enough solar electricity for a Solar Savers plan to be worthwhile with a standard tariff:

  • Adelaide: 5 kilowatts
  • Brisbane: 3.5 kilowatts
  • Melbourne: 5 kilowatts
  • Sydney: 3.5 kilowatts

So if your solar power system is around the required size or larger — while not exceeding the 10 kilowatt limit — it could be worthwhile checking to see if the amount of electricity you are sending into the grid is enough compared to your grid electricity consumption to make a Solar Savers plan worthwhile.
If you can, use information from over a full year to avoid seasonal variation.

Solar Savers plans & time-of-use tariffs

Because households with solar panels use little electricity during the day, if they are on a time-of-use tariff a large portion of the grid electricity they consume tends to occur during peak times in the evening.
This means they often pay more on average for grid electricity than if they were on a standard tariff. This makes the discounts available with AGL’s other plans more valuable as they will save more money.
So, generally speaking, a home with a time-of-use tariff will need to export more solar electricity relative to its grid consumption for an AGL Solar Savers plan to be worthwhile.

Solar Savers plans & demand tariffs

Because demand tariff plans have lower kilowatt-hour charges, discounts are less valuable and so less electricity may need to be exported relative to grid electricity consumption for a Solar Saver plan to be worthwhile.

AGL Solar Savers’ value depends on location & individual circumstances

Generally speaking, if your inverter capacity is larger than 5 kilowatts and your solar panel capacity is 10 kilowatts or less an AGL Solar Savers plan is likely to be the best high feed-in tariff plan available.
This is because other retailers offering high feed-in tariffs often have a limit of 5 kilowatts for either inverter or solar panel capacity. If your inverter is 5 kilowatts or less it’s less clear which plan will be best.
I’m not going to try to compare all the high feed-in tariff plans to attempt to work out which is the best for people with 5 kilowatts of inverter capacity or less.
That would be a lot of work and would probably annoy some people and result in electricity retailers sending even more ninja assassins around to my place to drink my beer, sit on my couch, and wear out my VHS copies of Ninja Turtle Movies.
Instead I’ll just give my impression of how competitive high feed-in tariff plans are for homes with inverters of 5 kilowatts or less in different regions:

  • South Australia — Lots of competition around.  Definitely check other high tariff plans to see if you can get a better deal.
  • SE Queensland — Less competition.  AGL’s Solar Saver looks like it has a good chance of coming out on top.
  • Victoria — Lots of competition.  I recommend shopping around.
  • NSW — Less competition.  You may find a deal better for you, but AGL’s Solar Saver looks good.

Footnotes

  1. No, I am not an online tool.  (A tool is something useful.) ↩
  2. It is possible I am mistaken about this since I am not computer savvy.  As far as I am concerned computers have only gone down hill ever since they started making the switches too small to be seen with the naked eye — from 30 paces across the room. ↩
  3. Aluminium is still a valuable metal: $2.74 a kilogram at the moment.  So when you get 10 cents for taking an aluminium can to a South Australian recycler you’re receiving 2.5 times the market price of the metal in it. ↩
  4. Back at the end of last century we were told electricity reforms would lower prices and increase consumer choice.  It looks like they’re aiming for zero out of two. ↩
  5. This is in the centre of Melbourne.  The figure may be slightly different in the suburbs.  The figure for Sydney is also from its “centre” and may be a little different in the western suburbs. ↩

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