The rooftop solar tax could double the pain

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June 15, 2021

The rooftop solar tax could double the pain

Should Australians be taxed for exporting energy from solar panels to the power grid? The Australian Energy Market Commission (AEMC) thinks so.

In its draft rule published on 25 March 2021, the AEMC recommends a range of reforms to the national energy market, including the proposal to tax solar households for exporting surplus electricity to the power grid.

While the proposed tax is the subject of hot debate, there’s now a further point of dispute. A new report finds that the costs of the proposed charges could be twice as much as those projected by the AEMC, potentially depriving solar homes of the income they earn from sharing their surplus energy supplies.

The study, conducted by Victoria University professor Bruce Mountain, who also leads the Victoria Energy Policy Centre, claims the tax could be double due to errors in the AEMC’s calculations and modelling.

In particular, Mountain points out that the AEMC’s figure of 2 cents per kWh for a $100 average residential solar system injection price is too low. The price for network injections sits somewhere between 4 and 4.9 cents per kWh. You can get the full details of the miscalculations here.

Responding to the report, AEMC told RenewEconomy that it’s not backing away from its calculations and that the proposals in the draft rule do not diminish solar as “a very good investment.”

In an emailed statement to Renew Economy, AEMC chief Benn Barr said, “Our analysis factors in the benefits that customers get from self-consuming their own solar power and not just export revenue.” 

On the AEMC website, Barr states, “We want to reassure solar customers that we’re not proposing they should all start paying export charges. We expect networks to deliver pricing proposals in close consultation with consumers, which may include options where they don’t have to pay for exports.”

At Arise Solar, we are watching developments with great interest. Regardless of the errors in the draft rule, the AEMC’s intentions are more about reforming the energy market and less about causing pain to households with solar panels. The broader cost savings remain for both commercial and residential users who install solar panels.

If you’d like to explore your solar energy options, get in touch with Arise Solar today. We install solar panels in South Australia, Western Australia, New South Wales, and Queensland.

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