City Hub

Energy retailers ripping off solar producers

Household Solar Panelling

Michael Mobbs looks forward to receiving his electricity bill. And why not? His most recent statement shows Origin Energy owes him $165.19 for three months of power.

Mr Mobbs, who owns Sustainable House in Chippendale, is receiving 60 cents per kilowatt hour (cents/kWh) for the solar power he exports into the grid from his network of panels. But City Hub found that many other household producers are getting as little as 10 per cent of that amount.

Mr Mobbs is receiving the 60 cents/kWh feed-in-tax as part of the NSW Solar Bonus Scheme that was introduced by the Rees government in June 2009. The scheme was subsequently closed to new applicants by the O’Farrell government in April 2011.

“So everybody’s getting ripped off now because they’re not getting paid what their energy is worth. Even if you are getting 10 cents, all you are getting is the value of your solar to the retailer,” said Mark Byrne, energy market advocate for the Total Environment Centre.

Mr Byrne explained that although the price of solar panelling has dropped by 80 per cent over the past few years, it’s still not financially viable for households to produce solar energy to be exported into the grid.

“IPART [the Independent Pricing and Regulatory Tribunal] has said they should be paid about 8 to 10 cents per kilowatt hour but it’s not mandated so some of the companies are paying 6 cents and some of them are paying nothing,” he said.

NSW Greens MP John Kaye said while solar energy is becoming the most cost-effective form of household energy, the Solar Bonus Scheme was unsustainable.

“The original Solar Bonus Scheme kick started a boom that created more than 5,000 jobs,” he said.

“Falling costs of solar panels…made the original 60 cents/kWh bonus unnecessarily lucrative to attract new entrants. The scheme went into an unsustainable and expensive boom.”

Mr Kaye points out that closing the Solar Bonus Scheme caused businesses to go bankrupt and people to lose their jobs, effectively “driving the solar industry from boom to crash”.

“[But] the scheme left a lasting legacy of more than 300,000 roof-top systems in place in NSW and the need for…polluting fossil-fuel power stations avoided,” he said.

Clean Energy Council policy manager Darren Gladman said home owners need to think about using smaller systems that produce energy just for their homes now that the energy rates have fallen.

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