Bad Utility Pricing Creates Solar Problems


bad utility pricing creates solar problems

In Australia, bad utility pricing creates solar problems for generators, utilities, solar installers, and customers.

I have indicated before that what is happening in Australia is a harbinger to what the U.S. will see with regard to solar energy and utilities’ reaction.  Australia has very high variable electricity prices, over 30¢/kWh, because they include fixed costs in the variable price. Solar produces power more cheaply than buying from the utility. The high variable prices have caused a deluge of solar installations, with over 1 million households and 2.5 million people having installed solar at an aggregate cost of over $8B AUS.

Now the utilities and state price regulators want to change the price structure of electricity, which will make many of these solar investments uneconomic and forestall additional solar installations. Existing solar customers as well as solar installers are forming lobbying alliances to fight these changes. They may very well be successful because they have grown so large.

I think the cost-effectiveness of solar is inevitable and I welcome it as a keystone to fighting global warming. But making it cost-effective as a result of bad pricing decisions by government and utilities is just sad. It’s too late for Australia, but not for the U.S. if we start to act now. Unfortunately, the utilities are only worried about the next quarter and the regulators are (mostly) living in the monopoly world past. Odds on we will repeat Australia’s (and Germany’s) mistakes even though we have had the benefit of their experience.

In the US, utilities are now seeking to protect their business models by pushing hard against net metering and seeking to influence the pace and manner of deployment of other technologies and new energy market concept that don’t fit the decades old model.

In Australia, much the same has been happening. RenewEconomy reported on the concerns of utilities in this article last month. Feed-in-tariffs have been wound back, as they were supposed to have been as technology costs fell, but now the pendulum is swinging the other way, and utilities – with the apparent complicity of state-based pricing regulators – are now trying to extract as much revenue from solar customers as they can.

It is a dangerous game. Leading electricity executives and market analysts suggest the rollout of rooftop solar is inevitable and “unstoppable” – unless, of course, by regulation and changing tariffs.

Little wonder then, that solar consumers and rooftop solar providers are starting to organise themselves to protect the interests of individual consumers, and the industry as a whole.

In Australia, a new solar campaign initative known as “Solar Citizens” is being launched this week to ensure the interests of solar owners are protected from changes to laws and policies by power companies and governments.

Solar Citizens sees its mandate as helping existing and would-be solar owners to advocate for their rights as energy investors and aims to push for panels on every Australian rooftop.

Solar Citizens Manager Dr Geoff Evans says 2.5 million Australians now live under a solar roof (one million homes have rooftop solar PV systems), and have invested about $8 billion. Some forecasts expect those numbers to triple by 2020.

via Rooftop solar owners vs utilities – the battle begins : Renew Economy.


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