Energy campaigners have branded a hidden “solar” tax targeting Australians who have switched to solar power “madness” and a “scam”, accusing energy companies of “wanting to charge people” who produce energy from sunlight.
Retailers in some Australian states have introduced a stealth fee, colloquially known as the solar tax or sun tax, as households begin to embrace the switch to renewable energy in the hope of easing their electricity bills.
But the new measures will result in those households being penalized for sending the solar power they generate to the grid during peak hours, something suppliers hope will encourage households to store their self-generated energy and use it, rather than waiting for a credit if it is exported back to the grid.
Renewable energy advocate Heidi Lee Douglas has been highly critical of the plan, saying it was “not a brilliant idea” to penalize people for “taking control of their energy bills with cheaper, cleaner solar power” during a cost-of-living crisis.
“Energy companies want to charge people who have solar panels to produce energy from sunlight, and that’s just not fair,” said Douglas, executive director of the renewable energy advocacy organization Solar Citizens.
‘The new two-way tariff is a blunt instrument that charges people with solar panels to feed their energy into the grid during the day, rather than helping them store their energy or feed it back into the grid at another time.
‘Rather than imposing penalties on people for not having batteries they cannot afford in a cost of living crisis, households need more support to access the benefits of battery storage.
‘People in New South Wales were absolutely furious, and Queenslanders will be furious when they hear about the huge tariff rip-off planned for homes with solar panels.’
Energy campaigners have branded a hidden “solar” tax targeting Australians who have opted for solar power “madness” and a “scam”, accusing energy companies of “wanting to charge people” for producing energy from sunlight (file image)
A solar tax refers to a new export fee for customers using solar power, part of a two-way pricing structure where users are effectively penalized for exporting solar-generated power when the grid is overloaded, such as at midday.
According to Canstar, the tariff also rewards people who export the energy produced by their solar panels to the grid during periods of high demand.
Energy providers mostly pay households for the electricity they feed back into the grid in the form of fees called solar feed-in tariffs (FiTs).
Canstar says the tax is designed to prevent grid congestion by encouraging households to use their own solar power first, rather than sending it back to the grid.
Ms Douglas said one of the biggest impacts of the sun tax was the message it sent to households thinking about installing solar.
She explained that this would deter them from doing so, saying: “It’s crazy to charge people for sunlight.”
“What we really need to do in a cost of living crisis is accelerate the pace of rooftop solar installations, providing access to solar energy to those who have not had it until now, such as renters, social housing and apartments,” Douglas said.
While the tariffs took effect in mid-2022, most households and businesses won’t see any major changes until next year.
This is because distributors need to submit a pricing proposal to the Australian Energy Regulator (AER) to demonstrate why they need it.
Some retailers in New South Wales and the ACT have already outlined the changes and what the costs would look like for the average household or small business.
Ausgrid, the largest energy provider on Australia’s east coast, revealed it was imposing a two-way tariff in July: charging customers 1.2c/kWh for electricity they produce during the peak export period of 10am to 3pm.
The company said customers would be paid 2.3c/kWh for electricity exported to the grid during peak demand hours between 4pm and 9pm each day.
In a statement, Ausgrid said it wanted to encourage customers to use their self-generated electricity while providing a “safe and reliable supply” for everyone.
Solar batteries are widely seen as a way to store unused energy generated by solar panels, so that it can be used at another time.
But the measure is expensive: it costs households between $8,750 and more than $20,000, depending on the size of the battery and the supplier.
The New South Wales state government has said it will introduce a rebate starting at $1,600 for battery storage systems from November 1.
Queenslanders won’t be hit by a solar tax until 2025, but the state government has launched a rebate for home solar battery systems that allows people to offset the cost of purchase and installation.
However, it closed in May.
“The Queensland Government needs to find ways to get more homes using solar and create incentives for people to switch to solar and batteries,” Douglas said.
In a statement, Ausgrid said they wanted to encourage customers to use their self-generated electricity while providing a “safe and reliable supply” for everyone (file image)
‘Currently, around 60 per cent of the community is excluded from the benefits of solar energy, including renters and people living in apartments or social housing, and they have the most to gain from reduced energy bills.
This comes as data from the clean energy regulator reveals that many of Sydney’s outer suburbs are embracing solar power and battery storage.
In Marsden Park in Sydney’s west, households are 87 per cent more likely to have these systems installed, followed by Tumbulgum and Tweed Heads with a 71 per cent adoption rate.
But in the state’s more established suburbs, those rates were much lower.
Only 2.9 per cent of homes in Elizabeth Bay, Potts Point, Rushcutters Bay and Woolloomooloo had solar and battery storage installed.
In Ultimo, only 4.8 per cent of households had adopted the new technology, while in Darlinghurst and Surry Hills 5.3 per cent of homes were using solar power.
David Sedighi, chief operating officer of energy solutions provider VoltX Energy, said these figures could be attributed to government mandates for new home construction.
“Energy savings aside, solar energy has made these new homes more energy efficient, allowing people to meet the requirements for the Building Sustainability Index (BASIX) certificate,” he said.
‘We know that having solar power also makes a new home more attractive to potential buyers in the future, as the cost of energy increases.
‘The so-called sun tax, under which energy providers charge customers a fee for solar power installed on rooftops and exported to their grid, will also boost demand for batteries.’
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