NSW Rooftop Solar Tariffs Reduced Amid Uncertain Impact of Sun Tax

New South Wales solar households are facing a reduction in the amount they will be paid for exporting energy to the grid starting in July. The NSW pricing regulator, IPART, has recommended cuts of around 3 cents per kilowatt-hour, setting a benchmark range for electricity retailers between 4.9 to 6.3 c/kWh for 2024-25, down from 7.7c/kWh to 9.4c/kWh in the previous year. However, retailers are not obligated to follow these recommendations.

The time-of-day benchmark range has been established at 4.7 to 6.0 c/kWh between 6am and 3pm, increasing significantly to 18.4 to 22c/kWh during the peak hour of 6pm to 7pm. IPART attributes these changes to the decrease in wholesale electricity prices, driven primarily by the rise in rooftop solar installations.

Impact of Solar Export Charges

These adjustments coincide with the introduction of rooftop solar export charges, set to commence in July for customers who choose energy plans with the new tariffs. The purpose of these charges is to provide pricing signals to consumers regarding the optimal times for the grid to receive energy from sources like solar panels. However, the full implications of these changes on the value of solar exports remain uncertain until the new network charges are implemented.

IPART plans to conduct further stakeholder consultations in September to evaluate the impact of network charges on solar exports and to review its methodology. The focus will be on how retailers incorporate these charges into their tariffs and whether adjustments to the benchmark ranges are necessary.

Maximising Solar Benefits

The key message from regulators and networks is that the greatest benefit of solar energy comes from self-consumption. By using solar electricity to power homes instead of purchasing it from retailers, consumers can achieve significant savings on their energy bills. This emphasis on self-consumption has been a driving force behind the increasing adoption of home battery storage systems.

According to IPART, a typical consumer in NSW can save over $520 annually by utilising the solar electricity they generate. Additionally, they can earn around $210 in credits on their electricity bill each year through feed-in tariffs.

IPART’s data reveals that the majority of rooftop solar exports occur during the daytime, aligning with the period when network companies plan to implement charges for solar sent to the grid. Conversely, only a small fraction of solar energy generated during the late afternoon and evening is exported back to the grid.

As NSW solar households navigate these changes in solar feed-in tariffs and export charges, the focus remains on maximising the benefits of solar energy through self-consumption and efficient energy management.