Fixed Charges Hike Could Wipe Out Battery Rebate Savings

In response to a draft proposal from the Australian Energy Market Commission (AEMC) for higher fixed network charges, new analysis projects that a flat fixed fee for energy bills could disproportionally raise bills for energy-efficient households, and largely wipe out the value of the federal battery rebate.

What Does The AEMC Proposal Mean For Solar & Batteries?

The Institute for Energy Economics and Financial Analysis (IEEFA) analysis finds that a plan for bills based entirely on fixed network tariffs could hike bills for low-consuming customers and reduce them for high-consuming customers.

Under a scenario where energy bills are a flat fixed cost instead of based on consumption, low-income households – which tend to use less energy – would be particularly impacted, along with households that have invested in solar and batteries, IEEFA energy finance analyst Jay Gordon warns.

“A household that installed a 10kWh battery in 2025 could pay an additional $5,800–$11,500 in electricity costs over the battery’s lifetime under predominantly fixed network tariffs. This would more than outweigh the estimated $3,300 rebate under the federal government’s Cheaper Home Batteries Program … The shift could also weaken the financial case for most other household energy upgrades. With longer payback times, households could be deterred from installing efficient electric appliances or rooftop solar,” he said.

What Is The AEMC Plan For Fixed Charges?

Limited detail has been provided, but the AEMC has proposed a draft policy for “predominantly fixed” network tariffs. Under the changes, the dynamic charge based on a home’s actual energy consumption would be zero most of the time.

The changes aim to address the growing divide between the energy bills of households with rooftop solar and batteries compared to households that don’t – including renters and people living in apartments.

Fixed network charges currently make up roughly 39% of a typical electricity bill.

What Did The IEEFA Modelling Find?

IEEFA compared retail tariffs available in capital cities in the National Electricity Market against a scenario where network costs are recovered entirely through a fixed charge shared equally across customers.

The analysis found:

• Payback periods for upgrading inefficient electric appliances to efficient appliances at their end of life could lengthen by 0.5 to 2.5 years;
• Homes with rooftop solar could see bill increases of $239–$564 annually;
• Payback periods for new combined 8kW solar and 10kWh battery systems could increase by 1.2 to 4.4 years.

The estimated impact of higher fixed network charges for homes installing rooftop solar and batteries, with current total costs represented in black and projected costs in yellow.

Getting Off Gas Would Still Make Sense

The analysis did note a small benefit for home electrification – by lowering the per-kilowatt-hour charge for electricity, it would become modestly more appealing to switch gas appliances over to electric alternatives.

End-of-life electrification paybacks would be reduced by less than a year for a typical home, or less than 0.3 years for a home with rooftop solar.

The IEEFA has called for an independent review into electricity network economic regulation.

“Our electricity network economic regulations were designed before households had widespread access to rooftop solar and batteries. As more consumers start to rely on these technologies to meet some of their energy needs, and the potential for these technologies to support the broader grid becomes clearer, this raises questions about how costs and risks should be allocated between customers and networks. We are calling for an independent review of electricity network economic regulation because we know changing tariffs alone cannot resolve these underlying issues,” Gordon said.

That’s without factoring in AEMC’s other plans to increase the cost of joining and leaving gas networks.

Solar Owner’s Sense Of Betrayal

New solar-and-battery owner Andrew McDonald told SolarQuotes that if the plan were to go ahead, it would amount to a shifting of the goal posts.

“Last December, my wife and I invested heavily in solar and battery for our home with the economics suggesting a seven year recovery of outlay. We thought that we were following a government initiative by helping grid stability through the easing of demand at peak times. This … however, suggests a major change in the goal posts which makes us feel betrayed by the government,” McDonald said.

Earlier this month, SolarQuotes in-house installer Anthony Bennett argued it was false that solar households aren’t contributing their fair share to maintaining the grid.

“Some operatives whinge that solar customers put expense on the grid, but that’s only because there needs to be some smarter hardware to control the network. What they ignore is that solar behind the meter lowers grid demand. The poles and wires need not be as big so we don’t have to go around gold plating the infrastructure to make sure things don’t melt in a heatwave,” Anthony wrote.

Rewiring Australia Suggests Alternative Path

Among the submissions to the plan submitted so far was one from Rewiring Australia, which argued that the AEMC is correct to recognise that the status quo is no longer fair.

“If non-solar households, renters, and low-income consumers come to perceive that they are subsidising the energy choices of wealthier homeowners, the political coalition for electrification will fracture,” the Rewiring Australia submission reads.

Rewiring Australia however warned against fixed flat charges, and instead recommended “property-value-scaled fixed charges levied on property owners rather than electricity account holders, combined with stronger dynamic network pricing that rewards batteries and flexible loads for
genuinely reducing system costs.”

High Volume Of Submissions

Written submissions to the draft report closed on 13 February. The AEMC noted that “given the high volume of submissions received for the draft report, it will take some time to process and upload them.”

The submissions that have been published so far can be found here.

Final recommendations are due to be released in June 2026.

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