NSW Feed In Tariff Changes – Channel 9 Adds To The Confusion

Last night Channel Nine News in Sydney ran a short segment on how NSW’s high gross solar feed-in tariffs are ending in a few days time.

Many of the details in this segment were not correct.

Where To Begin…

First off, Channel Nine News is correct that the 60 and 20 cent gross solar feed-in tariffs are ending.  I wrote about this here and gave some suggestions on what people can do.  But when I wrote that article I spent at least six or seven minutes checking that my information was correct.  I don’t see any evidence the makers of the news segment showed a similar level of diligence1.

They start off by describing how a home owner with solar will soon have to begin paying money to his electricity retailer instead of getting money from them, and that’s not a bad way to begin.  But then they say:

“Home owners currently receive a 60 or 20 cent rebate per kilowatt-hour for the solar energy they put back into the grid.”


No they don’t.

Only people who applied from the 1st of January 2010 to the 28th of April 2011 received those high feed-in tariffs.  This comes to around one-third of NSW solar households.

I can imagine there are probably a few people who saw the news segment and became upset they’re only receiving about a 6 cent a feed-in tariff instead of 10 times that much.

Also, it’s not a rebate.  A rebate is a refund on money that’s been paid and that’s not what a feed-in tariff is.  Thanks to Channel 9, thousands more people will now mistakenly believe that the actual solar rebate is ending. Grrrr.

They Say People Should Do Their Homework

We are told by presenter Vicky Jardim that:

“With rebates varying significantly between different energy providers, experts are urging people to make sure they do their homework and search for the best deal.”

 

That’s a great idea, Vicky.  In theory. Unfortunately, if you had done your homework, you would be aware that it is almost impossible for normal human beings to work out what is the best electricity plan for them.  I know I find it incredibly difficult and I’m not even normal.

Online feed-in-tariff comparison tools like ours can be used to try to find a good deal.  But even they can only do so much, as electricity retailers quite intentionally make their plans confusing.

I have written about how difficult it is for people with rooftop solar to find the best plan for them.  At the bottom of this article I give a ranked list of electricity retailers in Sydney that are most likely to give people with rooftop solar the lowest electricity bills overall.  I found the amount of feed-in tariff retailers offer has very little to do with which plan is the cheapest.

I think a news segment on how difficult it is for people to select the best electricity plan for them would be a very good idea2.

A Change In Technology?

As far as technical matters are concerned, I think the segment really goes off the rails when they inform viewers:

“On top of that, there’s a change in technology.  Most households currently use a gross meter.  All power generated from solar panels is sent back to the grid.  Homeowners are then credited for any excess they produce.  With the changes to rebates homeowners are better off using a net meter.  Your home uses the solar electricity first.  Any excess is sent to the grid.”

 

This part made me groan out loud.  I acquired a definite greenish tinge to my complexion and my height reached about seven and a half feet.

First off, most solar households don’t currently have gross meters, they have net meters3.  Only about one-third have gross meters.

Secondly, while gross meters are being replaced, nothing changes with regard to the electricity generated.  The solar panels on the roof and the grid keep doing their thing exactly the same as before.  The only thing being changed is how electricity use is measured and how people are charged for it.  Apart from the new meter it is an accountancy change only.  Houses certainly aren’t being rewired to use electricity differently.

The Difference Between Gross and Net Feed-In Tariffs

The high 60 and 20 cent gross feed-in tariffs, which are ending at midnight on Saturday, are paid for each and every kilowatt-hour a home’s solar panels produce.  It doesn’t matter if the electricity is then used by the home and not sent into the grid, the payment will be the same.  But all the electricity the household uses has to be paid for as if it came from the grid, no matter how much solar electricity is produced.

With a net feed-in tariff a home only pays for the electricity from the grid they use, but they also are only paid for surplus solar electricity that is exported to the grid and not every kilowatt-hour produced, as with a gross tariff.

Currently the feed-in tariffs for solar electricity are not high and are only roughly equal to the wholesale cost of electricity during the day.  Getting 60 cents for every kilowatt-hour produced is obviously far better than getting around 6 cents for every kilowatt-hour of surplus electricity.  But rooftop solar only costs a small fraction of what it did 7 years ago and so is still more than capable of paying for itself, even with today’s low feed-in tariffs.

It Is Unlikely You’ll Save Money With Batteries

The announcer then said:

“Or you could buy a battery to collect the extra solar energy.”

I am quite proud of myself that I managed not to scream, “HULK SMASH!” at this point.

However, I think I may have screamed something along the lines of, “HULK WISHES ENGAGE IN CONSTRUCTIVE DIALOGUE TO CORRECT MISAPPREHENSIONS NEWS SEGMENT CREATE IN PUBLIC!”

Everything would have been fine if the announcer had just gone on to point out that it is almost impossible for households to save money by installing batteries.  Even with a Powerwall 2, which will provide the cheapest battery storage available if Tesla is telling the truth, it will not be possible for normal households in NSW or anywhere else to save money.  I’ve written about this quite extensively here.

But rather than doing the useful thing of informing their viewers that batteries don’t pay for themselves at the moment, they instead cut to John Grimes4 from the Australian Solar Council who asks a question:

“Why would you buy electricity from the grid at 35 cents per kilowatt-hour or more when you can use your own solar power that you’ve produced during the day?”

 

Well, the answer to that is, firstly electricity in NSW normally doesn’t cost 35 cents per kilowatt-hour.  In Sydney it’s about 26 cents on a standard tariff, which is the cheapest tariff for most solar households.

Secondly, while with a time-of-use tariff in Sydney grid electricity during peak periods costs around 50 cents a kilowatt-hour, this is still not sufficient for a normal household to save money by installing batteries, even with the lowest cost system that has so far been announced.

I’m On A NSW Gross Tariff, What Should I do?

If you are on a NSW gross tariff, your electricity retailer should have already contacted you about getting a net meter, or what they probably call an import/export meter, installed.  Hopefully it’s already been done, because if not, after the end of the year you won’t get any feed-in tariff at all5.

If you haven’t been contacted about getting a new meter then it would be a good idea to call your electricity retailer and find out what is going on.  If they don’t want to install one for free, I’d suggest contacting other retailers and seeing if they’ll install a meter for you if you switch to them.  But note they probably have a long list of people wanting their meters changed, so it may take them a while to get around to you.

It is now very likely you will have a smart meter installed at the same time as they are now being gradually rolled out across the country.  If you have a smart meter installed you are not required to change the electricity plan you are on. If your retailer tries to put you on a ‘time-of-use’ plan with your new smart meter then you should decline. I wrote about why time-of-use tariffs are usually a bad choice for solar owners here.

Installing More Solar Is A Good Option

Most people currently on the high gross feed-in tariffs only have small solar systems with the average size being around 1.5 kilowatts.  But with the high tariffs ending on the 31st there is nothing to stop people from reducing their future electricity bills by installing more solar.  For most people, the cheapest option will be to leave their old system where it is and install an additional new system.  This is generally far easier than trying to upgrade the old system.  If this is an idea that appeals to you, feel free to grab a few quotes for more solar on your roof.

Footnotes

  1. In their defence, they probably only had six or seven minutes to make the entire segment.  People who work in television are expected to produce a minute and a half news segment in the time I spend deciding if my word order wrong is in a single sentence.
  2. If they want to go into detail about how the retail electricity sector is a market failure which results in huge losses for consumers due to a lack of clear information that is necessary for a market to properly function, that would be great.
  3. Net meters are generally called import/export meters because they keep track of how much electricity a home imports from the grid and how much solar electricity it exports to the grid.
  4. A bloody good bloke – but I have to beg to differ with him on this point
  5. There is no reason why people couldn’t receive an estimate of what their feed-in tariff would be based upon the size of their system if there is a delay in getting their new meter installed.  But I guess notions of fairness don’t actually extend to paying people for clean solar electricity supplied to the grid if their electricity retailer is a bit slack about getting a new meter installed.
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. hey its snowing

    • I know! – So much for this ‘Global Warming’ warming conspiracy 😉

      • Jack Wallace says

        ……er, I think theigloo is referring to the snowjob published above. 😉

        (NSW Feed In Tariff Changes – Channel 9 Adds To The Confusion)

        ….and don’t forget :- your freezer only generates cold by creating heat..

        Which is to say that without global warming snow would be impossible.

        Sweat, too ~ here in Vic.

    • Thought it was just me. Regarding Ronald’s comment, can’t find it now, where he said that electricity costs would be more for those with larger PV systems. His example was 1.5kw compared with 3kw so 2x larger bill. I am puzzled by this.

      • Ronald Brakels says

        I am also puzzled. All else equal, a home with a 3 kilowatt rooftop solar system will definitely have a lower electricity bill than one with a 1.5 kilowatt rooftop solar system.

  2. The outcome of policy changes by one state government after another with regard to coal fired base load generation could well push consumers in some areas toward building their home with self sufficiency in mind. The cost of delivering power from the grid to homes on rural properties is massive, and the combination of quality electricity storage systems with larger panel arrays, and possibly a small wind generator is likely to become a real option. There is no mains water where I live, and no sewage service, so I don’t pay water, drainage or sewage rates. If I build again, further out, the power will be generated and stored on site.

  3. Jack Wallace says

    ,,,and such a good start you made , too!
    ,,,,until you stuffed up your whole argument with this bit of nonsense:-

    “Everything would have been fine if the announcer had just gone on to point out that it is almost impossible for households to save money by installing batteries.”

    As I’ve pointed out in a dozen different ways:- Going stand-alone is EASILY the cheapest way to save on your power bill.. You’ve yet t o challenge the reality that the price of standard lead-acid batteries is more than paid for by the savings made from NOT paying the ‘service-to-property-charge’ alone over the life of the batteries,, without even factoring the potential savings.

    • Jack the lead acid battery in my car lasts 4 years .How long do the ones for energy storage last ?
      The last time I had a battery replaced it cost $300.00 so how much would it cost for me to install lead acid batteries capable of supplying me with 10KW of power over night.?

      • Jack Wallace says

        Hi Eric.
        Just spent two hours writing a manifesto in answer to your questions, only to lose it to cyberspace with the final stop. Will try to recompose it when I get a chance.

        Salient points:- Can’t imagine using 10kw overnight (I used 2kw per day for years without feeling deprived.
        As with anything you can find ways of spending as much as you like, However, for that 10kw a bit of shopping around can provide that sort storage (in realistic terms ~ eg installing 30 kw of LA storage for best battery-life) and STILL save $10k on the touted price of a power-wall.
        And that doesn’t even count in the fringe-benefits.

        I WILL try to get the details off to you soonest, but will say the reduced prices (and counting) available these days makes the KISS principle a no-brainer. Panels for 80-cents per watt and suitable batteries with a three-year warranty (from which I’d expect a good SIX years of use, properly configured) for $1.50 per AH. ie. 10kw = 800-some AH x $1.50 = $1200.
        Multiply by 3 to allow for a 30% DOD = $3600.. Replace after 6 years (maybe ; I’ve bought second-hand ones that lasted me EIGHT years before 2 out of 12 gave it away.) and you get 10 years worth of 10kw storage for $5K or $6k. And it IS possible to do much better.

        Gotta go.

        Get me on [email protected] if you like.

        • 10kW overnight is normal during peak summer and winter.You can turn off most of your lights, switch on two computers, the television cook dinner, boil a kettle a couple of times run the air for 90 minutes and of course on top of that the heating cycle for the hot water kicks in and leave all your other chores to the day when you produce solar and you will be hovering around 10KW consumption. It’s not so bad on the fringe season autumn and spring when the air is off most of the time.Just looking at Monday May the 8th my low was 2 cents an hour and my high was 48 cents an hour between 4pm to 6am the next day . daily consumption was between $1.69 and $1.97 so thats 5kw to 7kw .
          My bill for this quarter which is a low quarter for my will be just shy of $300.00 , so that’s $20 to $25 dropping to $11.50 a week for some weeks not including my discounts,rebates, feed in etc.

      • Erik Christiansen says

        Eric: “Jack the lead acid battery in my car lasts 4 years .”

        The batteries in my 17 year old Ford Ute have each lasted over 7 years.
        Before that I had a Mitsubishi Scorpion, and it went through only 3 of its smaller battery in the 21 years I had it. Admittedly, I do some long runs (>250 km), and nothing under 5 km, ever.) The Ute is usually garaged, but the Scorpion only had a carport for cold weather protection.

        The only battery maintenance is topping up the electrolyte once or twice in the battery’s life, using distilled water. My cars have always started within a few seconds of cranking, or gone to the mechanic, pronto.

        It’s doubtful that the climate here in The Dandenongs, at an altitude of 200m, is any kinder to batteries than elsewhere in Australia, I figure.

        A little 2 kW generator is cheap to buy, and can run lights and a TV for 5 hrs per night for about $5-$6 fuel cost, especially after I switched to LED lights. It is an order of magnitude less capital cost than extra batteries for sunless days, and need run so infrequently that running costs are probably less than the interest on the money saved. (We stop ours by cutting fuel, not with the kill switch, on the basis that unburnt fuel can dilute the oil on the cylinder walls, leading to greater run-off, and cylinder wear being much greater at starting, with unlubricated walls. Dunno how true that is, but the motor has put in around a quarter century of service so far, but the two preceding motors on that generator did less than that between them.)

    • Jack,

      For super efficient homes – like yours – whose residents are happy to modify their behaviour to work around a small off grid system, and DIY the installation and source cheap batteries, then yes going off grid may be cheaper.

      But for the average Aussie home (16-20kWh per day, 5kW peak load), it is absolutely not cheaper to go off grid.

      Best Regards,

      Finn

      • The lifestyle thing is the key.

        Had a friend who built about 250M from grid. Needed a HV extension pole and tranny. Cost $26K. She wanted to go off grid and approached me for advice, I said pay the money (her mum and kids lived with her). After a few terse meetings I was termed a non believer and she went her own way. Decided she would go off grid with a $26K budget. Now this is in Southern Vic – think near Ballarat. I said well if off grid at least get an ICE. Nope – wanted to 100% green.

        Several times over winter bumped into them in local pub. Can’t eat at home. Batts nearly flat again. Trying to preserve them for fridges and pressure pump so could have a shower in the morning.

        Looking at spending another $30K again to get through next winter.

        So if you can’t make it work when you are $30K in front, will be a hard battle when you are already connected.

    • Ronald Brakels says

      Jack, a while back I wrote about taking my parent off grid using lead-acid batteries under a very optimistic set of assumptions. It didn’t pay for itself:

      https://www.solarquotes.com.au/blog/an-off-grid-solar-system-can-pay-for-itself-but-cant-beat-on-grid-solar/

      If it was possible for a company to install lead-acid battery systems at a cost that enabled people to save money by going off-grid I would expect them to be doing a roaring trade. But I don’t see this happening. So I conclude that either companies can’t install lead-acid battery systems at a cost that will enable people to save money by going off-grid or for some reason they have all decided not to. Perhaps out of a sense of environmental solidarity as they want people’s surplus solar electricity to go into the grid and reduce fossil fuel use?

  4. Well it just goes to show how many ignorant bumble heads we have in well payed jobs.With Hawke now blaming the media for poor quality politicians is it any wonder that Santa Claus is now the Prime Minister ?

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