Outrage as Aussies are slugged with hidden tax: ‘It’s not fair’

A hidden ‘solar tax’ for Australians who switch to solar power has been criticised as ‘madness’ and a ‘scam’ by energy campaigners, with energy companies accusing them of ‘trying to make people pay money’ for generating energy from sunlight.

Distributors in some Australian states have introduced the stealth tariff, commonly known as a solar tax, as households increasingly switch to renewable energy sources in the hope of lower energy bills.

However, the new measures will see households fined if they feed their solar power back into the grid during peak times. Suppliers hope this will encourage households to store and use their self-generated energy, rather than hoping for a rebate if the energy is fed back into the grid.

Renewable energy advocate Heidi Lee Douglas is highly critical of the plan, saying it’s “not a smart idea” to punish people for “taking control of their energy bills with cheaper, cleaner solar” during a cost-of-living crisis.

“Energy companies want to charge people with solar panels to generate energy from sunlight, and that’s just not fair,” said Douglas, CEO of Solar Citizens, a renewable energy organization.

‘The new two-way tariff is a blunt instrument that makes people with solar panels pay for delivering their energy to the grid during the day, rather than helping them store their energy or deliver it back to the grid at another time.

‘Rather than punishing people for not having batteries they can’t afford due to a cost of living crisis, households should be given more support to take advantage of the benefits of battery storage.

“People in New South Wales were furious and Queenslanders will be furious when they learn more about the massive tariff fraud being planned for solar homeowners.”

A solar tax is a new export tariff for solar customers. It is part of a two-way pricing structure that effectively penalizes users for exporting solar power when the grid is overloaded, such as in the middle of the day.

According to Canstar, the tariff also rewards people who feed the energy produced by their solar panels back into the grid during periods of high demand.

Energy suppliers typically pay households for electricity fed back into the grid in the form of tariffs called ‘solar feed-in tariffs’ (FiTs).

Canstar says the tax is designed to prevent grid congestion by encouraging households to use their own solar power first, rather than feeding it back into the grid.

Ms Douglas said one of the biggest impacts of the solar tax was the message it sent to households considering installing solar panels.

She explained that it would stop them from doing that. She said, “It’s madness to charge people for sunlight.”

“What we really need to do at a time when the cost of living is so low is accelerate the pace of rooftop solar installation by making solar energy available to people who have not been able to benefit from it before, such as renters, people in social housing and apartments,” Douglas said.

The rates were introduced in mid-2022, but for most households and businesses, much will not change until next year.

This is because distributors must submit a price proposal to the Australian Energy Regulator (AER) to demonstrate why they need this.

Some distributors in NSW and the ACT have already outlined the changes and the costs for the average household or small business.

Ausgrid, the largest energy supplier on Australia’s east coast, announced in July that it would introduce such a two-way tariff, charging customers 1.2 cents/kWh for electricity they produce during the peak export period of 10am to 3pm.

The company said customers would receive a payment of 2.3c/kWh for electricity fed into the grid during peak hours between 4pm and 9pm.

Ausgrid said in a statement that it wants to encourage customers to use their self-generated electricity while providing a “safe, reliable supply” for everyone.

Solar batteries are generally seen as a way to store unused energy from solar panels so that it can be used at another time.

However, the measure is costly, costing households between $8,750 and more than $20,000, depending on the size of the battery and the supplier.

The New South Wales state government has announced a $1,600 rebate will be introduced on battery storage systems from November 1.

Queenslanders won’t face a solar tax until 2025, but the state government has introduced a rebate on home solar battery systems, allowing people to offset the cost of purchasing and installing them.

However, it closed in May.

“The Queensland Government needs to find ways to bring solar to more homes and create incentives to encourage people to use solar and batteries,” Douglas said.

‘About 60 percent of the population is currently not enjoying the benefits of solar energy. This includes tenants and people living in apartments or social housing. They have the most to gain from lower energy bills.

This is according to data from the clean energy regulator, which shows many Sydney suburbs are using solar power and battery storage.

In Marsden Park, in Sydney’s west, households are 87 per cent more likely to have such a system, followed by Tumbulgum and Tweed Heads with 71 per cent adoption rates.

But in the state’s more developed suburbs, those percentages were much lower.

Only 2.9 percent of homes in Elizabeth Bay, Potts Point, Rushcutters Bay and Woolloomooloo had solar and battery storage.

In Ultimo, only 4.8 percent of households have embraced the new technology, while in Darlinghurst and Surry Hills 5.3 percent of homes have solar energy.

According to David Sedighi, chief operating officer of VoltX Energy, an energy solutions provider, these numbers may be due to government regulations on new home construction.

“Apart from the energy savings, these new homes have become more energy efficient thanks to solar energy, allowing people to meet the requirements for a Building Sustainability Index (BASIX) certificate,” he said.

‘We know that solar panels will also make a new home more attractive to potential buyers in the future, as energy costs rise.

‘The so-called solar tax, where energy suppliers charge customers a fee for solar panels on their roof that are exported to their grid, will also boost demand for batteries.’