Proposed changes to SA retail tariffs could have dire implications for rooftop solar uptake

The uptake of rooftop solar in South Australia could be halved over the next five years if a change in the state’s electricity tariffs proposed by SA Power Networks is adopted.

SAPN is proposing a new form of billing known as “demand tariffs” which it concedes would cut the uptake of new rooftop solar systems, but could encourage more battery storage and electric vehicles.

SAPN unveiled the proposed changes this month as part of a move to “cost reflective” tariffs. The new tariffs – which the network wants to make compulsory from 2017-2020 – will focus on the maximum use by consumers in any month, but overall use outside of those peak times will become relatively cheap.

Critics of the scheme say the tariffs are being structured in such a way that they will penalise solar households, push up their bills, and make solar less attractive for those yet to install.

They say the networks are simply trying to shore up their revenues. Networks in Queensland have lifted fixed network charges, while NSW networks are considering a “solar tax” on exports to the grid.

As SAPN itself admits, it does not want to accept less revenue. “It (the grid) won’t shrink if we just use it less,” it says.

But this goes against years of driving towards energy efficiency, and it also underlines the massive cross subsidy paid by city users to regional users (70 per cent of the cost for 30 per cent of the use) and the cost of building the grid to meet a few hours of peak demand driven by air conditioning use.

SAPN – which earlier this year tried to impose a special $100-a-year network tariff on solar households – appears to agree that demand tariffs will hurt solar.

Under the existing tariff, rooftop solar PV is expected to surge over the next decade, trebling the number of installations to nearly 600,000 by 2024.

But under the proposed changes to a demand tariff, SAPN expects growth over the next five years to be halved, adding just over 100,000 news systems in the next five years from more than 200,000 under the current scenario.

By 2024, the number of rooftop solar PV systems under the demand scenario is still trailing, but regains most ground by 2034.

However, in this scenario, the uptake of battery storage is accelerated, although it still only believes widespread uptake will happen from 2019 onwards. Battery storage will enable consumers to avoid using more electricity from the grid at peak times. The uptake of electric vehicles also accelerates under the demand tariff arrangement, although it is not clear why.

© 2015 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson