Decline of financial incentives for solar panels causing surge in household batteries

James Coleman 7 December 2021 14
Solar panels on roof of house

Solar panels are now so popular in the ACT that excess electricity is pooling at the grid and it can’t cope with the excess. Photo: Mondiaux Solar.

From the day solar panels are on your roof and sending precious electrons through to an episode of Squid Game in your living room, you are effectively kissing goodbye to the dreaded electricity bill.

Rather than paying the likes of energy retailers such as ActewAGL, solar panels are effectively paying you to supply them with your power.

However, this could be about to change as financial incentives for installing solar panels continue to plummet.

Slowly but surely, energy retailers are paying homeowners less for their excess electricity, causing many to turn to ‘energy storage options’, or batteries.

READ ALSO: Canberra clean-tech company takes out global startup competition at COP26

This money – called a ‘feed-in tariff’ (FIT) – takes the form of credit on your electricity bill. It is basically money you earn by not using all of the electricity you make, instead feeding it back into the electricity grid.

During the years, the FIT rate has decreased to the point it now sits at an average of eight cents per kilowatt. And it hasn’t finished dropping.

The exact amount differs between Australian states, and depends on the plan you’re on and how much energy you’re feeding back.

In the ACT, this amount is decided by the electricity retailer. There is no legislation in place requiring it.

Howard Lian from Mondiaux Solar

Mondiaux Solar project manager Howard Lian. Photo: Region Media.

Mondiaux Solar project manager Howard Lian says there is a proposal currently being discussed that would see this situation reversed. The household owner would then pay the retailer to export their energy into the grid.

“Solar panels are now so popular that all the excess electricity is pooling at the grid and it can’t cope with the excess,” he says.

Therefore, your power is now worth less to the retailer so they pay you less for it. The theory is that this eventually would get to the point where the retailers would need to spend extra on infrastructure to cart your extra energy away, and this expense would be passed on to you.

Much of the motivation for homeowners to swallow the substantial upfront cost and install solar panels is built on the promise of receiving FITs, but Howard says people don’t seem put off by the drop.

Mondiaux Solar typically completes 15 to 20 jobs a week in the ACT, but Howard says there has been a substantial increase in 2021. Chances are people who were working from home during COVID-19 lockdown received an enormous electricity bill, quietly swore, and then decided enough was enough.

The ACT Government is attempting to remedy the oversupply situation and make up for the unreliability of renewable energy by constructing a large energy storage facility.

In other words, a very big battery.

Mondiaux Solar staff standing outside warehouse

Mondiaux Solar is one of Canberra’s most reputable commercial solar panel installers. Photo: Region Media.

It would play a similar role to that of a dam, keeping back the bulk of the electricity and only allowing some over the top when there is too much.

The ACT Government is also helping out people who want to drop their reliance on energy retailers altogether with a rebate called ‘Next Generation Energy Storage’. Launched in 2016, this is one of the biggest battery rollouts in the world and engages local companies such as Mondiaux Solar to install batteries across homes and businesses in the ACT.

On average, a five kilowatt system will deliver a rebate of $4125 off your total battery installation cost.

Howard says when his company transitioned from providing security services to solar in 2017 it recommended its customers hold back on going down the battery route.

READ MORE: Is it worth adding a battery to your home’s solar system?

Not only were they still wildly expensive at the time, they were also still in their infancy and carried the risk of malfunction, leakage or fire.

Because it was new technology, Mondiaux Solar advised a wait-and-see approach.

“We did quite a few calculations to see whether it was worth it, but the price was just too high,” says Howard.

But he says the time has come when batteries make sense given the technology is now relatively mature and there is government support.

The situation with the energy grid may also correct itself when demand for electricity surges with the influx of electric vehicles. Charging thousands of these vehicles every day could easily see ACT houses and businesses consume twice the amount of electricity they do today.

The electricity grid and your solar panels would then have plenty of work to do.

For more information, visit Mondiaux Solar.


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14 Responses to Decline of financial incentives for solar panels causing surge in household batteries
Philip Cristallo Philip Cristallo 12:06 pm 11 Dec 21

batteries should be what people are aiming towards, but my question is if there is to much power going back into the grid why is the electricity prices still going up... something doesnt really add up here and i think its corporate and governmental greed

Bek Clark Bek Clark 4:36 pm 09 Dec 21

What’s stopping solar power generators in a neighbourhood forming their own grid? For too long the planet-consuming industries have been parasitically piggybacking off consumers, whether through gold-plated infrastructure, privatisation, or very handsome subsidies. Can-do capitalism indeed.

Onelia Herriot Onelia Herriot 9:42 am 09 Dec 21

Electricity spot price is assigned by a government agency. Electricity companies are being paid less for all electricity generated regardless of its source.

If you were getting paid 30c per kw and are now being paid 15c per kw, you can't afford to pay the person who generates the power 23c per kw.

Capital Retro Capital Retro 8:48 am 09 Dec 21

That $4125 tax-payer funded rebate is a dead loss too.

Tammy Britt Welsh Tammy Britt Welsh 8:24 am 09 Dec 21

Electricity infrastructure is now critical, pokes and wires ( and funding) need to be redirected towards battery and storage. The people should never be charged for collecting energy for private companies to profit from

Cube Starr Cube Starr 10:53 pm 08 Dec 21

It's becoming irresponsible for electricity providers to not install community batteries where everyone benefits and the environment benefits.

    Onelia Herriot Onelia Herriot 9:43 am 09 Dec 21

    Cube Starr what is the benefit for the electricity provider?

    Are people willing to still pay substantial bills so they can access the community battery?

    Cube Starr Cube Starr 10:35 am 09 Dec 21

    Hi Onelia, one in four houses have rooftop solar in Australia. This is causing a problem for electricity generators (coal and gas powered) because it is creating an excess in the grid. If electricity providers supplied batteries for communities it would increase the uptake of solar and reduce carbon powered electricity generation. It would lower everyone's electricity bills.

    Onelia Herriot Onelia Herriot 12:24 pm 09 Dec 21

    Cube Starr why woukd energy companies by interested in reducing their customers electricity bills?

    Cube Starr Cube Starr 12:45 pm 09 Dec 21

    Onelia Herriot competition. We can all get our electricity from a number of companies.

    Charles Godworth Charles Godworth 9:56 am 10 Dec 21

    Onelia Herriot There is no benefit for the electricity providers. They are publicly listed companies and they exist to make a return to their shareholders. Any notion that they are simply going to roll out community batteries and kill off parts of their revenue streams is just plain nonsense.

kenbehrens kenbehrens 7:36 pm 08 Dec 21

Lower feed-in tariffs need to be pit in some perspective. The cost of panels is also substantially cheaper.
The warranty on the batteries is less than the payback period. Better to install more panels than buy a battery, IMO.

nobody nobody 3:56 pm 08 Dec 21

We have just sorted out the problem from asbestos insulation, have only just begun to sort out the issue with flammable cladding, and are now rushing to install flammable batteries in our garages. Will they all need to be removed by another government program in 10-20 years?

Capital Retro Capital Retro 7:05 am 08 Dec 21

I made enquiries about batteries 5 years ago and the supplier said they had to be installed in a garage and needed bollards around them which effectively took away one car space.

I wasn’t sure that they were “fireproof” either which is alluded to in this article.

If I did buy them then I would be looking at replacing them soon because they degrade. Anyone considering them should factor in this.

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