A new report has shown that seeking out the best value retail energy deal can be just as important – and potentially as valuable – for solar households as non-solar households, as Australia’s energy market absorbs surging fossil fuel prices while also adapting to an increasing contribution from renewables.
The report, published this week by St Vincent de Paul Society with research partner Aviss Consulting, is part of a series tracking energy tariffs in Queensland from July 2009 to July 2022.
As you might expect, 2022 is shaping up to be a standout year for tariff watching, with the average electricity market offer jumping by $855 or 44% in July 2022 compared to the same time last year in Queensland.
The report shows that, for non-solar households, there can be a huge difference between the best and worst retail offers – as much as $1,950 a year for households using 8,000 kWh a year. Switching from Origin or AGL’s standing offer (Tariff 11) to the best offer could save up to $485 a year.
And solar households are not immune.
While the report finds solar homes in the Sunshine State are still making big savings compared to non-solar homes – roughly $900 a year for just 3kW of panels, the report finds – the average market offer has increased year-on-year by $585 for solar homes – also approximately 44%.
Of course, solar households – particularly with a small 3kW system – can still use a good deal of grid electricity, and that’s going up for everyone. But as the St Vinnies report notes, it’s not all about the grid tariff. Solar tariffs are changing, too.
First of all, on average, the solar feed-in tariff in Queensland has gone down slightly, compared to last year – the report shows the average FiT rate is 6.4 c/kWh compared to 7.8 c/kWh in July 2021.
But the St Vinnie’s report’s comparison of market offers available to new solar customers also shows that there can be “significant differences” between the bills each retailers’ offers produce.
At the extreme end of the spectrum, for example, it finds that Brisbane residential solar customers with a typical consumption and a 3kW system could save $2,685 a year by switching from the worst market offer (GloBird) to the best (Red Energy).
More realistically, however – as illustrated in the table above – a switch from, say, Alinta Energy, to Red could result in a roughly $400 a year bill reduction for a regular solar household, which, as St Vincent de Paul’s Gavin Dufty puts it, is “nothing to sneeze at.”
“Solar households tend to let the panels do the work, but they can get a lot better financial outcome if they make sure they’re on the best product for them and they can start to shift load into the time they’re generated,” Dufty told One Step Off The Grid.
“Set and forget is not going to work in the best interests of solar households,” he said.
Getting familiar with household consumption patterns, and shifting energy intensive loads into times when the sun is shining and the panels producing, is of increasing importance for solar homes wishing to get the best bang for their buck.
This is evident in the table below, taken from the report, which shows that of the top five highest feed-in tariff offerings in Queensland, four are two-part feed-in tariffs, where retailers offer a relatively high FiT rate for a set amount of kWh exported each day and a much lower rate beyond that.
This, says Dufty, means that solar households on these sort of offers, who are in a position to start to shift around their consumption, are going to see bigger dividends this year than previous years.
As well as two-part feed-in tariffs, customers can expect to see an increase in offers featuring time-of-use tariffs, and time-of-export tariffs that encourage self-consumption when solar generation is plentiful on the grid and incentivise solar exports at times of peak demand.
“It’s part of a general reset across the market, because of what’s going on,” Dufty told One Step, noting that similar trends are appearing in other states, too (Vinnies is set to release a report tracking South Australia tariffs later this week).
‘What’s going on’ at the moment is a combination of volatile market conditions driving high prices for fossil fuelled grid electricity, on the one hand, and the changing shape of demand being wrought by renewables, and in particular by rooftop solar, on the other.
“Customers currently looking for solar offers need to assess both the retailers’ FIT rates as well as the cost of electricity imported,” the report says.