That’s the theory, at least. The problem comes when you consider a whole nation of people doing the same thing at the same time. Thanks to its abundance of sunlight and single-family homes, Australia has one of the highest penetrations of home solar panels in the world. Somewhere in the region of four in 10 households have them.
In the country’s main grid, small-scale systems produce 15 per cent to 20 per cent of electricity during the summer months. For a brief period before midday on Saturday, when renewables were providing 79 per cent of power, rooftop panels accounted for more than half of total generation.
When all those modules are working simultaneously in the middle of the day, the result is typically an excess of power. Instead of receiving money for the electrons they provide, generators are charged for it — something that currently occurs about one-fifth of the time during daylight hours. Shifting such penalties from professional utilities to households is a politically risky move, but the sheer quantities of rooftop solar mean it has become inevitable.
Since the start of July, people in NSW exporting more than about 6.8 kWh a day to the grid during the midday solar peak are having to pay for the privilege. On a back-of-the-envelope calculation, my colleague could be paying $130 a year for her exports, cutting the promised $400 of revenue by almost a third. That solar tax is likely to get steeper as home generation keeps growing and the excess deepens.
There are ways to avoid this penalty. Adding a home battery allows you to shift your exports to the evening peak, when the sun sets and prices spike back into positive territory. Better still, buy an electric vehicle and connect it to a two-way charger that allows it to feed the grid — its battery is far better value than the stand-alone version, and you get a car as part of the bargain.
There’s also automated home-energy-management systems, which use software and apps to move your daily usage to the hours when the sun is high, and even switch off your panels’ grid connection when it starts looking costly to export.
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From the perspective of the entire country, such oversizing might be a good thing. An increasing number of studies in recent years have argued that it’s cheaper to get a clean grid by connecting excess wind and solar and switching them off when there’s too much generation, rather than installing a smaller amount backed up with batteries.
The problem is that few commercial players will volunteer to build such money-losing generators — but households, which are less sophisticated and cost-sensitive than utilities, might be the ideal providers of capital.
Still, those considerations all point to picking a system that’s sized based on what you need, rather than projections of profit and loss on your utility bills.
Turn your home into a power station, and you’re changing your role from that of customer to speculator in one of the most volatile, cutthroat commodity markets on the planet.
Electricity buyers, and sellers, should beware.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.
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