Australia’s battery boom has expanded so far it accounts for one in every 10 units of new capacity installed around the world, but industry leaders say proposed power bill changes would lead to thousands of dollars of losses for households that have invested in government schemes.
The Australian Energy Market Commission on Thursday released a proposal, which it is aiming to finalise by June, to change the way customers are charged for the costs of maintaining the poles and wires network.
While the commission is promising savings for most electricity customers, Energy Minister Chris Bowen is sceptical of the change.
But clean energy groups said the commission’s proposal would “change the ground rules” laid out in years of campaigns and financial incentives from state and federal governments encouraging home owners to invest in batteries.
Jackie Trad, chief executive of the Clean Energy Council, which represents major renewable developers, said sudden increases in fixed network charges could undermine Australia’s green energy transition.
“The Clean Energy Council has cautioned against sudden increases in fixed network charges as part of the proposed rule changes,” said Trad.
“The more of an electricity bill that is made up of fixed charges, the less of an incentive there is for households to generate or save energy.”
Electricity costs paid by households are largely made up of two parts: the cost per hour of electricity used, and a network charge for maintaining the grid that provides power to homes.
The energy market commission is scrambling to find ways to pay for the grid upkeep as the surging uptake in solar power – 4.3 million solar-powered homes and 500,000 residential batteries – dramatically cuts household electricity use.
Currently, network costs are levied via variable charges, calculated on the amount of electricity used from the grid. The commission warned that as the number of households with batteries grows, the amount of network electricity will decrease, leading to a shift to a higher, fixed network charge, which it said would create “more equitable sharing” of costs in maintaining the grid.
The commission’s modelling suggests a household battery owner would be $3312 worse off over 10 years under its changes. It said new forms of compensation to benefit battery owners should be developed alongside its reforms.
However, lobby group Solar Citizens, which represents solar and battery owners, said the commission’s scheme would short-change home owners who were encouraged by state and federal governments to buy batteries.
“Our concerns include changing the ground rules for Australian home owners who have or are considering making an investment in solar and batteries, undermining government incentives for home batteries and solar,” said chief executive Heidi Lee Douglas.
Victoria has provided financial incentives to for batteries since 2018.
“Victoria is the home of batteries, which soak up cheap renewable energy during the day to drive down bills for Victorian families,” Victorian Energy Minister Lily D’Ambrosio said in March last year.
NSW Energy Minister Penny Sharpe said in July last year that her government “wants to be world-leading” in battery installations.
Bowen last year announced changes to the popular home battery scheme, which delivers a 30 per cent rebate on new installations, so that smaller, cheaper models reap the greatest benefit.
Record levels of large, grid-scale and household batteries are being installed, Bowen said on Thursday.
“We’re not 10 per cent of the world’s economy. We’re not 10 per cent of the world’s population, but we are 10 per cent of the new battery capacity that’s being installed,” he said.
Bowen also said bill changes must “balance the interests of those who’ve invested in solar and batteries, and those who haven’t”.
The Australian Energy Market Commission expects the changes to take effect from 2030.
Experts have calculated that adopting fixed charges could lower costs for wealthy, large, energy-hungry families, who may benefit by as much as $1400 a year. But it could also leave low-income households $200 a year worse off, and those with solar panels and batteries $700 out of pocket.
“We don’t want people who have invested in solar batteries to be disadvantaged by this reform,” said commission chair Anna Collyer.
“We think there’s a way it can be implemented to deliver benefits to everyone through reduced network charges to make sure we look after customers who can’t invest in [batteries] so they are paying a fair share of network costs without impacting the value of investments people have already made.”
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Nick Toscano is a business reporter for The Age and Sydney Morning Herald.Connect via X or email.
