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Payback: Green Investors Face Solar Tax Down Under

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Graham Lloyd, The Australian

AUSTRALIA’S one million rooftop solar households could be forced to pay new fixed charges to help recover billions of dollars in taxpayer subsidies and make electricity prices fairer for all consumers.

A series of electricity industry reports has highlighted the inequity in existing power pricing where customers without solar panels are unfairly subsidising those with them.

Queensland Energy Minister Mark McArdle has warned that existing rooftop solar contracts will cost the state more than $2.8 billion over the next 15 years and is preparing a major submission to cabinet within a month recommending more user-pays charges. Electricity tariffs could be changed to include a higher network access charge and lower unit prices per kilowatt hour, a move that would increase the cost for rooftop solar users.

A national meeting of electricity executives in Sydney this week discussed a potential “death spiral” for the industry as high electricity prices force more people off the grid, increasing costs further for those who remained.

Mr McArdle said the number of households with rooftop solar had continued to grow despite a cutback in government subsidies and the gap between the haves and have-nots in electricity widening.

“If one group of consumers enjoys a benefit in excess of the true savings they make, other electricity customers have to pay the price of those excess benefits or lower prices,” he said.

“When those doing the paying are likely those least able to afford it, and those enjoying the benefits are those likely to be most able to afford to meet their true costs, then something is truly wrong.”

The problem was compounded because power companies were forced to buy high-priced electricity from rooftop solar when there was no demand for electricity from customers.

And baseload power generators were forced to run inefficiently to be ready for when “intermittent” solar power was not available.

Renewable industry lobby groups have rejected calls for a new fixed charge.

Clean Energy Council deputy chief executive Kane Thornton said: “It would be like telling early adopters of email that they need to chip in to pay for stamps.”

The Greens said yesterday they would spend $405 million a year on a new federal government agency to cut spending on electricity infrastructure, improve energy efficiency, and set higher prices for renewable energy produced by households which generate solar power.

Leader Christine Milne said the Greens were the only party with innovative ideas to help Australians live a fairer, cheaper and cleaner future.

The cost of the new agency would not include the higher charges paid by electricity companies from rooftop solar under the Greens scheme. An investigation by the Queensland Productivity Commission found that, by 2015-16, most Queenslanders would be paying $276 a year or 17 per cent of their annual power bill to subsidise other residents having solar power on their roofs.

Mr McArdle said this did not include the cost of upgrading the electricity network to cope with widespread power flowing back into the grid.

A report by consultancy ACIL Tasman for the Electricity Supply Association of Australia said solar customers were overcompensated when they generated electricity and used it on site because they were not making a contribution to the cost of providing network services.

There were also issues of equity and fairness, as some customers were unable to install rooftop solar systems because they were renters or lived in an apartment.

Fairness was an issue because one customer’s choice to install rooftop solar forced other customers to pay more for network service.

“The distortion could give rise to a ‘price spiral’ where the rising cost of electricity, driven by the ongoing reallocation of network costs, made solar increasingly attractive to customers,” ACIL Tasman said.

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