Proposed tariff would keep solar households connected to the grid

Australia’s main network lobby hopes to encourage more than one million households with solar and storage to stay connected to the main networks, rather than quit the grid, with the proposal of a new tariff for stand-alone power systems.

A new report commissioned by the Energy Networks Association predicts that by 2050 some 10 per cent of consumers – or 1.25 million households – will leave the grid because solar and battery storage will offer a cheaper solution.

It believes that by offering a “stand alone power system” discount, it can provide an incentive for most of these to stay, thereby avoiding added costs to other consumers, who would be required by networks to pick up the revenue lost from households leaving the grid.

The way the SAPS discount might work is by requiring those with significant solar and battery storage arrays to disconnect from the grid at times of “critical peaks” – effectively acting as a load shedding feature on the grid and trying to avoid those pricing surges that are passed on to all consumers.

This proposal indicates a slight evolution in thinking from the network lobby, which in the past has rejected accusations of network “gold plating”, as well as any calls for write downs, and has even canvassed penalties to consumers who do leave the grid.

The new tariff appears to be a means to tap into the solar and storage resource of those households, and presumably use those assets and reward them for their ability to help meet peak demand, defer grid spending and provide grid security.

However, the forecast of a 10 per cent defection rate by 2050 contrasts sharply with recent work by the CSIRO through its Future Grid scenarios, which suggested that one-third of consumers could leave the grid by 2040 unless the network operators changed their business models.

© 2016 Solar Choice Pty Ltd

Giles Parkinson