Household solar faces threat of costs spike

Solar panels are likely to become more expensive and less lucrative under new regulations being formed by the Australian Energy Market Operator.

Energy Minister Angus Taylor. Picture: AAP

Solar panels are likely to become more expensive and less lucrative under regulations being formed by the Australian Energy Market Operator.

Owners of solar panels may also be forced to undertake costly upgrades of their systems as regulators scramble to limit grid instability because of the high uptake of household renewables.

Energy Minister Angus Taylor said new national standards for household solar was a “high priority” and could require legislation to be passed by state and territory governments. AEMO is formulating recommendations on regulatory changes for the sector after releasing a report showing “uncontrollable” and “invisible” electricity being generated by solar panels was causing problems in the energy market.

“It will probably have to be done through (Council of Australian Governments) which requires state-based legislation but again we will await the recommendations,” Mr Taylor told The Australian. “There are a number of ways these things can be done. I have made it clear that having enough dispatchable electricity to complement the intermittent renewables coming into the system has to be a priority of all governments, state and federal.”

AEMO is considering mandating new technology requirements for solar panels that would allow regulators to forcibly turn off household systems in emergency circumstances. It is also considering forcing owners of existing solar panels to undertake upgrades of their systems.

Government sources expect AEMO’s technology recommendations will likely only apply to new systems as nationwide retrofits may be unfeasible.

Grattan Institute director Tony Wood said the coming regulatory changes would likely make household solar less lucrative for owners.

“For those people who were sold a PV system and thought they were always going to get a certain price per kilowatt hour and now that is going to change, they may be very seriously annoyed,” Mr Wood said.