Feed in tariff
|Under construction - notes only|
In WA, the price the main electricity retailer will pay is seven cents per kilowatt-hour for generation exported to the grid. In SA, the regulator requires retailers to pay 7.1 cents, which will then increase to 11.2 cents by 2013-14. In NSW, the regulator did not impose any mandatory requirement on electricity retailers, but suggested an appropriate rate would be between 5.2 cents to 10.3 cents. Meanwhile, the Australian Energy Market Commission expects that, by 2013-14, the price households pay for electricity they consume from the grid will rise to between 29 cents to 32 cents. Ref
It is better to have the PV off the grid, and use it to charge the electric car, pool pump, air conditioning and other daylight hours jobs. This way the household avoids paying 30c/KWh, and it avoids cost of petrol. If it costs say 8 cents to generate PV electricity, then it is a cheaper way of filling the car than buying it at 30c from the power companies or at ??c from the oil companies.
If you sell the electricity to the retailer at 5-7c you are going to lose money.
It may even be worth having a storage battery and inverter to convert back to 240 AC. It could supply the non essential jobs, while the mains supplies the heat/lung machine, or the freezer.
The idea is to go off grid and not pay for all the poles and wires and overheads of the power companies.
This tariff has been designed to discourage people from putting PV on their roof.
One would have to ask why the government would do this. Is there dishonesty or incompetence? Hardly matters, the result is the same.
Jeremy Rich, the managing director of Energy Matters, a leading solar installer, said his company is working on a leasing product that it plans to launch soon. It expects to be quickly followed by others. These leases will likely be financed by private equity and high net worth individuals, and if successful is likely to be taken up by banks who could offer even more attractive rates.
But this has wider implications. A new surge in the deployment of rooftop solar in Australia could have an impact on generators, who are already worried about the impact it is having on their profits. As we highlighted in this story here, the impact on generator earnings in country with a large penetration of solar, such as Germany and Italy, is already dramatic, and AGL highlighted the potential for this to happen in Australia, which is why it is lobbying to slow down the growth in the solar industry in Queensland, the last state to have a significant feed in tariff.
Such a move poses huge challenges on the electricity retailers’ current business model and, as pointed out by numerous global surveys, it is not entirely clear that they are ready to adapt. Adding to the complication in Australia is the fact that our biggest utilities are “vertically integrated” and are generators as well as retailers. Not only do they face a double whammy effect, but any initiatives in one part of the business to address the issue could cause problems in the other part of the business. Network operators are at risk too of having stranded assets.
conservative governments who have been winding back the tariffs at the behest of the vested interests in the energy industry, as revealed last week by AGL Energy, who boasted that it was mostly responsible for the decapitation of the state-based tariffs for fear its earnings would be adversely affected. Ref.
The Draft Energy White Paper, released late last year, virtually ignores solar, mostly because it relies on advice from “independent” consultants, whose predictions for reductions in the cost of solar PV in 2035 are so laughably wrong that their forecasts are actually higher than the current cost in 2012.
This graph below highlights the problem. It was prepared by ACIL Tasman, one of the expert consultants on whom the energy department relies, on behalf of gas client, Santos. It predicts the energy mix out to 2035. Solar doesn’t exist.
|utility AGL betrayed its own anxiety about the merit order in a submission to the Queensland government that was disguised as an academic paper. AGL complained about a “transfer of wealth” from utilities to consumers, and warned that if left unchecked, feed-in-tariffs and the merit order effect could “raise tangential doubts about the entire sustainability of the industry” and “could make a robust energy market model collapse” – language not heard since another owner of a brown coal fired power station, TRUenergy, warned in 2009 that the lights would go out in 2015 if compensation for the proposed CPRS was not extended. Ref|
How to kiss the grid goodbye
How 3-phase trickery from utilities is ripping off solar households
By Finn Peacock on 20 January 2015
And the scariest part is this: the solar owners being royally screwed will probably never understand why their bills are 30, 50, 80% higher than they should be. Indeed many of them will jump on online forums and Facebook to declare that solar is a complete con. They’ll extoll their friends not to waste their cash on it. The PR people at the electricity companies must be cracking the champagne.
So what are some networks doing to sneakily reduce the payback of solar systems? Well, it’s not a price rise and they haven’t hatched a plan to make people use more power.
Rather, they appear to have simply engaged someone to change a handful of lines of computer code, cleverly rejigging the way some import export meters define the “Net Export” of a kWh of electricity.
You may have thought that the term “net export” is pretty clear-cut? Surely it’s simply the number of kWh that, due to the laws of physics, flow out of the home into the grid whenever more solar is generated than consumed on the property?
On a property with a single phase supply, yes, it is pretty clear cut. The ambiguity arises where the home or business has three phase power.
Some networks appear to be taking advantage of this grey area. Many solar owners with 3 phase may never even know that the box on their wall that silently counts their solar exports has now been subtly reprogrammed to increase their bills.
How can this three phase trickery happen? Here’s how:
Many homes in Australia have a 3 phase supply. Many 3 phase homes who have solar have a single, 1 phase inverter connected to one of the home’s phases (usually the blue one).
This is a perfectly reasonable way to install solar. My personal solar system connects to a single phase of the house’s 3 phase supply.
The house’s 3 phases are then connected to a 3 phase solar import/export meter. This meter calculates how much solar is exported to the grid, and how much of the solar energy is being ‘self consumed’.
For most homes, self-consuming solar energy saves about 35c per kWh. Exporting solar energy is generally worth only around 8c per kWh.
So obviously you want to maximise self-consumption and minimize exports.
How 3 phase meters usually calculate exports:
Traditionally all 3 phase import/export meters have calculated exports like this:
1) Look at the total amount of energy being consumed on all 3 phases
2) Look at the solar being generated on the single ‘solar’ phase.
Subtract (1) from (2) to calculate the exported energy.
This is good for the homeowner. If the sun is shining and they are generating, say 3.5kW of power, but their appliances are consuming 1 kW on each of the 3 phases, they are officially exporting 0.5kW (3.5kW – 3kW) and importing zero kW from the grid. So they are earning about 4c per hour for their efforts. Not a lot, but better than paying for electricity!
How 3 phase meters could be hacked to benefit the retailers and networks:
Let’s stay with the scenario above and consider what is actually happening to the electrons in the 3 wires.
On solar phase, we are generating 3.5kW but consuming 1kW. Therefore we are sending 2.5kW back to the grid on the solar phase.
On the other 2 phases, we are consuming (importing) 1kW per phase.
So if the meter gets reconfigured to only count exports on the solar phase, then the financial effect is this:
The homeowner will be earning 2.5 x 8c = 20c per hour for their exports. But will be paying 2 x 35c = 70c per hour for these imports. The net effect is a cost of 50c per hour to the homeowner instead of them earning 4c per hour.
Do you think the electricity retailer would prefer to pay out 4c per hour or earn 50c per hour from hundreds of thousands of 3 phase solar homes with a 3 phase supply?
According to my contact, he’s tested some 3 phase meters and has discovered that at least some 3 phase meters in NSW are configured the latter way: i.e. to calculate exports only on the solar phase, to benefit the electricity company at the expense of the unknowing solar owner.
To my knowledge, there is no standard or contractual basis to enforce how these meters should calculate the exports. The electricity companies that own them may well be legally able to change the software in the meters at their whim, as I’ve never seen it specified in a supply contract. If anyone can clarify the legal definition of “net metering” please let me know in the comments.
Further, my contact told me that the networks are refusing to specify on paper how their 3 phase meters calculate exports.
What should a solar buyer with 3 phase do to protect themselves from being charged for these ‘phantom’ imports of electricity?
One option is to get a 3 phase inverter. Unfortunately this will add approx. $500-$800 to the price of a 5kW system compared to using a single phase inverter. It will also simply spread the exports evenly over the 3 phases. So you can still be generating more than you are using in total, but get screwed because the generation does not exceed consumption individually on all of the 3 phases.
If you want to use a single phase inverter (or microinverters) you should ask your electrician to connect as many daytime loads as possible to the solar phase. Ironically, the electrician has a duty to “balance the phases” with the loads, so by helping you not get screwed by the networks, they are actively decreasing the stability of the network’s beloved grid.
I’ve checked the meter on my home (a Landis+Gyr EM5100 provided by SA Power Networks) using a 3rd party energy meter and it calculates net exports the correct way. But I’m very aware that they could simply upload new firmware to re jig the export calculations. Perhaps after reading this they will.
Finn Peacock is ex CSIRO, a chartered electrical engineer and the founder of SolarQuotes.com.au . This is an edited version of a blog post that was originally published here. Reproduced with permission.