Subsidies to West Australian households that pump solar power to the grid during the middle of the day are set to be slashed in a bid to avoid the risk of renewable energy overloading the state’s electricity system.
- More than 300,000 households in WA’s south-west have solar panels
- A new subsidy scheme will slash daytime payments for excess solar but boost those at peak times
- The changes come into effect from August 31
The WA Government, however, will boost payments to customers exporting solar power into the network during peak times under a long-awaited shakeup of a key green energy incentive scheme.
Experts say the overhaul is a sign of things to come for the rest of Australia — and long overdue, given that millions of rooftop solar systems are installed across the country.
The WA revamp follows escalating warnings from the Australian Energy Market Operator (AEMO) that the state’s biggest grid risked becoming “inoperable” unless the flood of solar was better managed.
There are now more than 300,000 – or one in three – households with solar on the South West Interconnected System, which spans the continent’s southwestern corner, up from practically zero 10 years ago.
Combined, rooftop solar accounts for more than 1,200 megawatts of generation capacity, compared with an overall system capacity of about 6,000MW.
‘Giant, invisible power plant’
Last year, AEMO boss Audrey Zibelman said rooftop solar in WA had effectively become the single biggest power plant in the state and threatened to crowd out the baseload generators needed to keep the grid secure.
Energy analyst Matthew Warren, a former head of industry body the Electricity Supply Association of Australia, likened the number of solar panels in WA to a “giant, invisible power station” that could not be controlled.
He said WA was at the leading edge of the technical challenges posed by solar, meaning its decisions were closely followed by the rest of the country.
“WA is incredibly important,” Mr Warren said.
“It’s probably, if not the most important, then one of the most important grids in the world.
“That’s because it has a very high level of rooftop solar penetration and it’s completely isolated.
“So, in a sense [WA is] getting there first.
Daytime subsidies down, peak periods up
Under the changes, a new program will replace the Renewable Energy Buyback Scheme (REBS), which pays eligible customers a flat rate of 7.13 cents for every unit of electricity their solar panels export.
Instead of the flat rate, customers will be paid just 3c per kilowatt hour for their excess solar throughout most of the day as part of the new “distributed energy buyback scheme”.
But in an effort to encourage people to invest in batteries or use more of the power their panels generate, the Government will boost to 10c/kWh exports into the grid between 3:00pm and 9:00pm.
The changes come into effect from Monday August 31.
State Energy Minister Bill Johnston stressed the changes would only apply to new solar customers or those upgrading their systems and that everyone else could remain on the old scheme if they chose.
Despite this, Mr Johnston said the revamp was desperately needed to put the electricity system on a more secure footing and make sure the benefits of abundant renewable energy were more equitably distributed.
“In January of 2019, [the AEMO] said that if there was nothing done about the uncontrolled growth of solar power then there would be blackouts in Western Australia starting in 2023,” he said.
“So no change is not an option.
“We need to make changes that support the electricity system.
“There are costs built into the system that are potentially being exacerbated by excess renewable energy.
Changes to encourage batteries, EVs
Perth-based energy lawyer Luke O’Callaghan said even though new solar households would miss out on the flat REBS rate, the “distributed energy buyback scheme” would still provide a financial incentive to customers.
Mr O’Callaghan said shifting the incentive program from a flat to a time-of-use rate would “nudge” people towards behaviour that best capitalised on the value of their solar power.
He said this would encourage householders to use more of their own solar power, which he noted was cheaper than paying State-owned provider Synergy 28.8c/kWh.
“The driver of rooftop solar uptake is really not around what people get for export for the grid anymore,” Mr O’Callaghan said.
Jodene Skeet, a married mother-of-two from the south coast town of Albany, said she was prompted to invest in a solar system by economic and environmental factors.
Since installing the panels in March, Ms Skeet said the family’s power bills had fallen by as much as $300 compared with previous periods.
She said the decision to invest in solar would not have been any different, even if the changes applied to her family.
“We took solar panels as an idea of becoming more accountable about our energy usage,” Ms Skeet said.
“Yes, we wanted to save some money to make the investment back.
Better management imperative
Mr Warren said solar power would be “critical” to efforts to decarbonise the electricity system as its cost and capability improved further over coming decades.
As a result, he said it was crucial to ensure the adoption of the technology was better managed.
“What we’re seeing in Perth is a trend we’re going to see roll out across the rest of the world over the next decades,” Mr Warren said.
“Solar, both as a rooftop technology and a power station level, is just going to keep coming this century.
“It’s a remarkable technology that is changing the way we generate electricity, but it comes with its own challenges.