Solar rooftop changes pave way for SA to be entirely powered by the sun, SA Power Networks says

Massive changes to rules around rooftop solar systems that give households more money also pave the way for SA to be run entirely on the sun.

Changes to rules on rooftop solar will pave the way for the entire state to be regularly powered by the sun, SA Power Networks says.

The electricity distributor already aims to facilitate double the solar in South Australia by 2025 but wants to go further.

The company will conduct extensive consultation over the next four years about the new rules that were announced by the Australian Energy Market Commission on Thursday.

The changes which take effect in July 2025 allow for distributors to charge a fee – potentially of about $70 a year – for households to export more solar power into the grid.

Now such fees are banned but SA Power Networks and others say the money is needed to upgrade the grid.

“The dominant purpose of the rule change is to enable efficient investment to support continued take-up of solar photovoltaic and other distributed energy resources (such as batteries),” SA Power Networks spokesman Paul Roberts said.

The Clean Energy Council welcomed a new rule which creates a right for households to be able to export power.

Incentivising more investment in the grid was a positive step, council director Darren Gladman said.

However, lobby group Solar Citizens criticised the introduction of a “sun tax”.

It was “deeply disappointing”, Solar Citizens’ national director Ellen Roberts said.

Victorian Energy Minister Lily D’Ambrosio signalled that her state would oppose the fee changes.

“We won’t be allowing Victorians to be charged for the extra power they send to the grid,” she tweeted.

A spokesman for the South Australian Government said the fee structure would “enable households to continue to install and benefit from rooftop solar systems”.

SA Power Networks would need to consult consumers to ensure the changes were done “in an equitable manner”, the spokesman said.

The Australian Council of Social Service, which had called for change, said the reforms would “reduce electricity bills for millions of people who rent, live in apartments or are financially disadvantaged”.

It was a “fair and equitable” way to grow solar and tackle the climate crisis, ACOSS chief executive Cassandra Goldie said.

Australian Council of Social Service CEO Dr Cassandra Goldie. Picture: Mick Tsikas

The commission has ruled that distributors must offer a fee-free basic service – similar to current arrangements under which most solar households earn money through a feed-in tariff.

However, the commission wants the distributors to work with retailers in creating innovative new offers where consumers pay a fee but are able to earn more by targeting solar exports to when extra power is most needed.

Mr Roberts said it was too early to say what SA Power Networks would propose but it could include:

THE compulsory, fee-free basic service;

A PREMIUM service at a cost which would attract customers such as those with batteries enrolled in virtual power plant who could sell power at high value but which would need investment from the distributor;

A FLEXIBLE service at a modest fee offering high levels of exports for much of the time, but which would be constrained during periods of network congestion.

SA Power Networks is now trialling a flexible service in a few suburbs. The trial does not change settings for existing solar customers which have a 5 kilowatt limit but new connections are offered a fixed limit of 1.5kW or a flexible limit of up to 10kW.

The commission has not set a minimum ceiling for the new, compulsory fee-free, basic service, so it could be reduced from the current 5kW.

All new offers post-2025 need approval from the Australian Energy Regulator.

SACOSS CEO Ross Womersley. Picture: Tait Schmaal

ETSA sell-off made wealth gap worse

By Chris Russell

The privatisation of the electricity system in South Australia shows how such a move can worsen inequality, the SA Council of Social Service says.

An analysis of the former government-run ETSA being handed to private operators found two technical economic reasons why the outcome was undesirable, SACOSS said.

The findings were reported in a submission to a Legislative Council select committee on privatisation.

The private owners now delivering electricity network services were making a higher rate of return than the growth of the economy. This gap was a cause of increasing inequality, SACOSS said.

Secondly, because private companies pass on to consumers the costs of capital investments and ancillary services, this was less equitable than if those costs were covered by taxpayers.

“It is pretty clear that the privatisation of the electricity network in SA has contributed to increased inequality,” SACOSS chief executive Ross Womersley, pictured, said.

The analysis is based on work by researcher Thomas Piketty, from the Paris and London schools of economics.

On the rate of return issue, SA’s economy growing at about 2 per cent a year since 2016, while electricity companies earned about 6 per cent, under a rate set by the Australian Energy Regulator.

Mr Womersley said the AER was not allowed to consider inequality as a factor.

“We really need legislative reform to ensure that the regulator takes account of social impact,” he said.

On the capital costs issue, the tax system is progressive – that is, the more you earn the higher percentage tax you pay. Conversely, poorer consumers generally spend a larger proportion of their income on services such as electricity, even though the unit cost remains the same. Therefore, if the people pay as consumers, rather as taxpayers, the inequality gap will worsen.

The select committee on privatisation meets on Monday, with SACOSS due to give evidence on housing.