Solar Slashes Peak Electricity Demand On New Year’s Eve

Rooftop solar's impact on electricity demand

Image: moerschy

The Australia Institute (TAI) has taken EnergyAustralia to task over recent claims it made regarding the cost of small-scale solar to electricity customers, while ignoring its value.

According to TAI, on December 31 rooftop solar cut peak electricity demand in New South Wales by 776 MW, in Queensland by 550 MW, in South Australia by 411 MW and in Victoria by 601 MW.

“Solar slashes peak demand, which drives down electricity bills for everyone,” TAI tweeted.

NSW electricity demand

Image: The Australia Institute

It’s during peak demand periods when the wholesale cost of electricity can really crank up – particularly on hot summer days when air-conditioner use skyrockets. The National Electricity Rules stipulate a maximum spot price1 of $12,500 per megawatt-hour  – $12.50 a kilowatt-hour2 – although pricing at this level is usually for very short periods. Even without hitting anywhere close to the maximum spot price, periods of peak demand can be a very profitable time for electricity generators. Generally speaking, the lower peak demand is, the cheaper the wholesale electricity price is.

Solar Savings For All Electricity Customers

TAI states while electricity generator/retailer EnergyAustralia’s claims in a recent Daily Telegraph article that the Small-scale Renewable Energy Scheme (SRES) costs NSW electricity consumers on average $45 a year, the company ignored “$ billions” saved through solar alleviating peak demand.

As an example, it points to an article by RenewEconomy’s Giles Parkinson last year that states an analysis of electricity price surges during the February 2017 heatwave in New South Wales suggests residential and commercial rooftop solar across the state likely saved electricity customers close to $1 billion – over just three days.

The Australia Institute says cutting Australia’s solar subsidy prematurely, which EnergyAustralia would love to see happen, will drive up power prices (and EnergyAustralia’s profits).

Meanwhile, back at the Daily Telegraph, Tim Blair weighed in on the subsidy issue with a subsequent blog post bearing a title screaming “Poor Subsidising The Solar-Loving Rich.”

Queensland University of Technology’s Dr Jeff Sommerfeld would probably disagree with what that headline infers. A 2017 QUT study revealed the highest uptake of solar power subsidies in that state was among families on medium to lower incomes. It would be fairly safe to assume the same applies in New South Wales.

While it’s true some families who could reap the benefits of solar power still cannot access it, instead of axing the SRES more needs to be done to help them do so – and there will be flow-on benefits for all.


  1. The spot price for a 30 minute trading interval is the average of  six dispatch interval prices. In 2017 the Australian Energy Market Commission made a final rule to change the settlement period for the electricity spot price from 30 minutes to five minutes, but this won’t start until 2021.
  2. In these situations, electricity consumers don’t see their next bill go sky-high, but peaks in pricing are factored into what electricity retailers charge.
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.


  1. The feed in Tariff for Tasmania has now been reduced from 28 cents to 8.5 cents for those who received 28 cents an extra 5 cents per KW Hr. has been added to “CUSHION” the blow.(for one year only)
    All the others receive 8.5 cents per KW Hr. its called discrimination -onya LNP/IPA !
    Best part is those who were on 28 cents will get an increase of about $250 per quarter in their “BIG STICK(it) accounts.(based upon 20 panels).
    Then the rip off occurs any excess power returned attracts a rate of 26 cents perKW Hr. This is called theft, gouging, stealing, robbery by Government and a rip off and reflects the religious ideology of the Grinning Minister in Abetzland!
    We are encouraged to buy returned excess power at a 309% markup….hooray.

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