Solar export rule not the consumer “win” it’s cracked up to be

The Australian Energy Market Commission’s (AEMC) recent decision to allow solar export charging was widely reported in the mainstream media as a win for consumers.

Even now, more than a week on, it’s still being reported that these new rules will stop network service providers from limiting solar exports – but the fine print of the final determination tells a different story.

It’s time to set the record straight. Here at Solar Citizens, we’ve gone through the final determination in detail so that consumers can know what to expect if these new rules are implemented in their State or Territory.

A ‘no charge’ option for 10 years, but only with an export limit

One of the key consumer measures touted by the AEMC is giving consumers the ability to opt-in to network charging. If you don’t want to pay, you don’t have to, for 10 years. It sounds pretty good, but what’s not talked about is that a solar household taking up this option will almost certainly face a strict curtailment on their exports.

South Australian Power Networks (SAPN) have released their proposed implementation of export charging, which shows that the “no charge” option means a 1.5kW export limit, down from the existing 5kW currently available free in South Australia. That means solar households that choose to opt-out will see their export income cut to less than a third of what is currently available in South Australia.

While it’s good to see SAPN transparent in releasing this proposal, what it shows is the potential for a substantial curtailment of existing rooftop solar exports across the grid if people take up this no-cost option.

Rooftop solar is Australia’s clean energy success story – and is on track to surpass coal capacity by 2024. But if those panels are prevented from exporting we won’t see the positive emissions reduction and wholesale power price benefit.

No charges until July 2025

Protecting existing solar owners from the impacts of export charging until 2025 is mostly a concession to the states, many of which have expressed concerns about the impact on people who invested in solar in good faith before this rule change was even anticipated.

However, the draft determination noted that the export charges would most likely come in after the current revenue determination period, which for most DNSPs is 2024, given the complexity in negotiating new tariff arrangements in the middle of a determination period. So the 2025 date looks like just an extra six month breather on what was going to happen anyway. And important to note this is not ‘grandfathering’ existing customers, where existing solar owners are protected from fees for as long as they have their rooftop solar systems, which was supported by a number of States.

Zero export limits

One of the biggest reasons some in the solar industry have supported the proposed rule change is the promise that it will end the imposition of static zero export limits. However, if you read the fine print of the rule change networks do retain the ability to impose zero export limits if it’s necessary for the ‘safe, secure and efficient provision of the network.’ I would have hoped that’s why they were imposed prior to the rule change, so this looks just like a codification of existing practice.

Larger distribution connected generators

One additional issue that’s been little discussed is the impact on larger distribution connected generators; for example the 46MW Canunda wind farm in South Australia that is connected to the distribution network. Solar Citizens has been advocating for community owned renewables for many years now but these larger community owned projects, like Haystacks Solar Farm in regional NSW, will be impacted by these new changes.

These distribution connected generators will now be subject to export fees, even though their larger cousins connected to the transmission network don’t have to pay. Attempts to impose export fees on transmission connected generators have been lost recently as part of the CoGATI process.

This is a real concern for a number of reasons: it disproportionately impacts medium-scale renewables, which is where most community owned energy is; and there are also potentially lost efficiencies if the larger generators are forced to connect to the transmission network in order to avoid the fees.

So where does that leave consumers?

The final determination is not a significant departure from the draft, which raised concerns among stakeholders that consumers would not be adequately protected under the new rules.

In its final ruling, the AEMC has reinforced its guidelines, but still ensured that networks are given spacious and sweeping outs. We fear the burden of ensuring fairness and adherence will still fall on under-resourced community groups.

But the fight over solar export charging isn’t over yet, because at the end of the day the state governments still have the final say and can derogate from the rules. Victorian energy minister Lily D’Ambrosio has already said firmly that export charging won’t be implemented in Victoria, and Queensland will likely follow suit.

For those States still looking to introduce export charging, the Clean Energy Council is calling for a reform to their management of voltage as a necessary first step before export charging can be considered – otherwise we risk solar households paying to manage voltage problems that are decades old.

For consumers, it’s hard to know what to expect next. The AEMC’s rule change is full of uncertainties and it’s unclear where it will be implemented. But one thing is for sure: the final determination isn’t the win for solar consumers that it was reported to be.

Ellen Roberts is the national director at Solar Citizens