1246 GMT February 18, 2020
He has been getting 60 cent for every kWh he sells back to the grid. That’s much more than the 25 cent he pays for each kilowatt hour (kWh) he buys from the grid.
But that’s about to change. “We’re about to get a major reduction, I think,” said Shaw.
Like many solar customers, Shaw is aware that something is going to change, but is unsure what precisely is going to happen and what he needs to do about it, according to the Guardian.
He’s one of more than 275,000 people across Australia who will see the subsidized payments they receive for their solar energy disappear over the next six months, replaced with rates up to 80 percent lower.
The solar boom in Australia, which has led to 1.5 million households generating their own electricity from the sun, was accelerated by subsidized payments for people who sell solar-generated electricity back to the grid.
In some cases, like Shaw’s, solar customers were able to receive more than twice the money for the electricity they put in the grid, compared with what they paid for electricity they took out of it.
But for a lot of homes and businesses, those schemes are coming to an end over the next six months and, if they’re not prepared, they will be heading towards some serious bill shock.
Customers in New South Wales (NSW), who got the most generous rate, will be in for the biggest hit and will need to do the most to adapt to the changes.
“At best, they’ll cop a turnaround of about $1,000 or a bit more,” said Damien Moyse, energy policy manager at the Alternative Technology Association. “But if they’ve got a big system their turnaround will be two or three thousand or even more next year.”
In NSW, very generous deals were on offer between 2010 and 2012. People who signed up then have been on those rates ever since.
What’s more, the NSW scheme offered that rate for every kWh they produced, rather than just the excess they didn’t use themselves.
But from Jan. 1, 2017, they will get paid as little as 5.5 cent per kWh for the power they put back into the grid. That means the economics will completely flip, and rather than being able to rake in cash by selling electricity back to the grid they’ll want to use as much as they possibly can.
“If you use the solar on site, then you’re avoiding paying 25 cent for every kWh,” Moyse said. “That value to you is five times higher to you than putting it into the grid at 5 cent.”
While about 150,000 homes and business will be kicked off these schemes in NSW on Jan. 1, 2017, the party is ending for about 130,000 customers in Victoria and South Australia too.
Regardless of how much people are getting hit by the changes, the principle is the same for everyone coming off a subsidized scheme – and indeed for anyone with solar or anyone planning on getting solar without a subsidized feed-in-tariff: the way to make the most of the system is to use as much of it as people can to run appliances, displacing energy people would otherwise buy from the grid.