Are Solar Subsidies Fair?

The boom in rooftop solar is changing the grid, raising technical and equity concerns. Total Environment Centre and Renew have released a discussion paper on the implications for Australia.

The Solar Subsidies Report just released by TEC and Renew (formerly the Alternative Technology Association) addresses concerns expressed by some networks that rooftop solar is causing problems for the grid. Welfare groups have also suggested that the costs of solving these problems is being borne disproportionately by people who don't have access to rooftop solar.

“There has been a lot of hysteria recently in the media about technical issues like voltage control, and related equity issues - in other words, who benefits from and who pays for the solar revolution?” said lead author Mark Byrne, TEC’s Energy Advocate. “Our paper identifies the technical issues and potential cross subsidies involved and develops a principles-based approach to overcoming them.”

Damien Moyse from Renew explained that “the solar cross-subsidies relate to the loss of network revenues caused by lower grid consumption by solar owners, as well as the engineering costs associated with managing high levels of export in local parts of the distribution network.”

“A number of strategies can be implemented to target and address these two cross-subsidies, including tariff reform, minor technical upgrades to network infrastructure and possibly the dynamic management of inverters,” Moyse added. “In most cases these solutions are relatively simple and cost-effective.”

The paper also discusses the proposal, first flagged by the AEMC in 2017 and since backed by some welfare groups, to change the rules to allow networks to charge solar owners to export their surplus energy to the grid.

“There may eventually be some value in a dynamic pricing system for solar, battery and EV energy exports to the grid, but not when there are cheaper, easier and fairer solutions to the issues we are currently facing,” said Byrne.

“We hope that developing an evidence-and-principles-based approach will help everyone involved to have a more nuanced discussion around these issues. Rooftop solar, batteries and EVs can have multiple benefits to the whole energy system, and they are critical the reducing our dependence on fossil fuels to generate energy.”

“There is more than one way to tackle cross-subsidies,” added Moyse. “Welfare and environmental groups should work together to better harness the benefits of solar and make it available and affordable to the renters, apartment dwellers and other households currently locked out of the solar market.”


For more info please contact:

Mark Byrne, TEC: 0403070442

Damien Moyse, Renew: 0439 900 692

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