Solar export tax proposal put on hold after flood of competing ideas

The Australian Energy Market Commission has put on hold a proposal to impose a tax on rooftop solar exports while it considers a flood of competing ideas on the best way to integrate rooftop solar, batteries and other new technologies.

The solar tax – despite coming from several different consumer advocacy groups, and one network – has been one of the most controversial proposals put before the market rule-maker, and its support of the idea has elicited a huge response from market participants, analysts and consumers.

The AEMC has extended the date for publishing its report until August 12, after receiving a large number of what it calls “diverse views”, and it wants to consider these in detail. It received 50 responses from energy companies, governments and other organisations, and more than 100 responses from individuals.

“Stakeholders have presented us with valuable and differing options – exploring these fully deserves some more time,” AEMC Chair Anna Collyer said in a statement.

“Extending the publication date for a further month will help us work through the key considerations.”

The solar tax was put forward as a proposal in part to ensure that no rooftop solar household could face arbitrary “export limits” often imposed by networks.

It was argued that the money raised from the solar tax would cover the small cost of upgrading networks to cope with the influx of rooftop solar. A tax of around 2c/kWh on electricity fed back into the grid was suggested, although this could also depend on timing, and from state to state.

Many argued that the tax was a retrograde step, would severely crimp economic gains from rooftop solar for households, and sent the wrong signal to consumers, particularly as the cost of network upgrades were not significant.

Ron Ben-David, a former head of the Victorian regulator, the Essential Services Commission, wrote that the solar tax proposal was futile because it didn’t tackle the real issue about regulation.

“Unfortunately, the AEMC has completely sidestepped its responsibility to tackle these two difficult questions. Instead, it seeks refuge in an outdated regulatory framework, and kicks the can down the road to the Australian Energy Regulator,” he wrote in an article on RenewEconomy.

Some big energy companies, such as EnergyAustralia, expressed concern that the solar tax could extend to bigger installations, such as grid scale battery storage and gas generators.

Tesla, meanwhile, argued that solar tariffs could become more dynamic. It suggested a system where households getting paid at peak times, but paying a fee to export during periods when solar is not needed, while also getting paid to charge when the grid needs it, and to pay higher import charges during peak periods.

The AEMC, meanwhile, said its focus is on designing rules that can accommodate the predicted growth of rooftop solar and can effectively integrate new technology like home batteries and electric vehicles.

“We are committed to designing a long-term solution that works for all energy consumers,” Collyer said in a statement.