Getting the facts right on Solar | OCCASIONAL PAPER | December 2013

What is really driving higher electricity network costs…

… and how can they be fairly shared between consumers?

This report, prepared for CPD by the Australian PV Institute (APVI), is the first to examine the interaction of new technologies with network tariffs, rather than wholesale electricity prices.

Key findings include:

Rooftop solar has been reducing higher network costs driven by air-conditioning.
The current direction of electricity reform unintentionally increases cost impacts of air-conditioning for households, while limiting solar’s ability to offset it.
Time-of-use pricing could make the so called ‘death spiral’ for networks worse by reducing their revenue, or increasing household bills.
A network tariff based on customers annual peak demand is a better solution than the ‘blunt instrument’ of higher fixed charges or disconnection fees.

Households installing air conditioning increase everyone else’s bills, while rooftop solar saves for all

Adding rooftop solar to the network reduces bills faced by other households due to air-conditioning. The Centre for Policy Development, along with with the APVI (Australian PV Institute), quantify the real impacts of rooftop solar on other households’ bills. This shows there are more equitable and effective ways to share network costs – rather than the blunt instrument of charging solar consumers extra levies.

The issue of network costs is highly topical, especially in light of the price ‘hikes’ to be confirmed in Queensland next week. As consumer demand for electricity peaks for the year thanks to air conditioning, what better time to consider policy solutions to protect responsible use of resources – including household budgets?

Download CPD OP35 – Getting the facts right on solar

Download APVI impacts of technologies tariffs