Australian Energy Market Commission to introduce major changes for rooftop solar, including fee to earn more money from exporting

Rules for houses with solar power are about to change significantly, allowing householders to earn more when they export power – but they will have to pay a fee first.

Major changes to the electricity grid will overhaul rules around exporting solar power and potentially cost some households $70 a year – while cutting bills for homeowners who don’t have solar panels.

The new rules to better manage peaks and troughs in supply and demand and accommodate more households taking up solar were announced by the Australian Energy Market Commission on Thursday.

The new rules enshrine the right for households to export solar to the grid in exchange for feed-in tariff payments. While many households currently do this, they could be blocked by electricity distributors such as SA Power Networks.

Instead, solar households would be able to choose from a range of market offers, from a basic service with no fee for selling power into the grid to sophisticated contracts where they would pay a fee, potentially $70 a year, but earn a higher feed-in tariff by exporting power when it’s most needed.

Distributors are currently banned from charging the householder a fee for solar power fed into the grid.

The changes will shield households the two-thirds of homes in South Australia – and 80 per cent nationally – which don’t have solar. They would not have to bear the brunt of costs to upgrade the power grid.

The non-solar homes will save an estimated $15 a year off their power bills, the Australian Energy Market Commission said.

The existing rules were designed for an old system and needed to be changed so more consumers benefit from solar, prices fall and the energy sector cuts carbon emissions, commission chair Anna Collyer said.

“These new measures to drive smart solar are fundamental to enabling a modern electricity grid that delivers out to 2030 and beyond,” she said.

The “profound change” would turn the existing “one-way street delivering power to people’s homes into a two-way highway where energy flows in both directions”, she said.

The Australian Energy Market Commission is an independent statutory body which makes the rules for the market and advises governments.

Requests for changes were made by SA Power Networks, which said upgrades were needed for a system which was saturated in some areas; the Australian Council of Social Service and St Vincent de Paul Society, which said it was unfair for non-solar homes to pay for upgrades; and the Total Environment Centre, which argued more solar was beneficial.

“It was a good mix of the environment, social service and the distribution business,” Ms Collyer said.

“It looks forward to when more households have batteries and electric vehicles. We want customers to be able to invest in those assets and get the most out of them.”

Commission modelling found a household with a typical 4-6kW solar system now has a benefit of about $800 a year from using their own power and earning a feed-in tariff for selling excess to the grid.

“If you do nothing as a customer, that could reduce by about $70, worst-case scenario,” Ms Collyer said of the changes for solar owners.

However, customers will have new options such as exporting from a battery during the evening peak “which is when networks will reward you”, she said.

It will be compulsory for distributors to offer a fee-free service and any introduction of a fee would have to be approved by the Australian Energy Regulator as being in customers’ interests.

Now, SA Power Networks has a 5kW default limit on exports. The commission has not set any new minimum capacity limits for the basic, fee-free service.

The changes will begin from July 2025 and apply to new and existing customers.

In South Australia, there are about 300,000 households and businesses with solar.

This included just over 34,000 new installations in each of the past two financial years.

In SA there were 155,000 early adopters who benefited from state government mandated feed-in tariff incentives of 44c/kWh or 16c/kWh – but the rest are only able to earn whatever their retailer offers.

Retailer feed-in tariffs have been falling from about 20c/kWh a few years ago to about 10c now.