The $500-a-day service charge designed to kill solar in Queensland  

Posted by Big Gav in , , , ,

RNE has a look at moves in Queensland to shift from usage based pricing for electricity to a model with heavy "service charges" for grid connection, punishing on-premise generation - The $500-a-day service charge designed to kill solar.

Queensland businesses are being hit with daily service charges of more than $500 a day on their electricity bills, in a move the solar industry says is designed to kill the roll-out of commercial-scale rooftop solar across the state.

The charges were quietly unveiled by the Queensland Competition Authority and the state government in July. But their implications are only now being absorbed as business operators do the numbers on proposed solar installations. ...

The changes have horrified members of the solar industry, businesses looking to install solar, and those who have invested tens of thousands of dollar in energy efficiency measures such as LEDs or upgraded machinery.

That’s because, according to Steve Madson, director of Country Solar, one of the country’s largest installers of commercial-scale solar, the new tariffs reduce any incentive for businesses to lower consumption from the grid, either by installing solar panels for their own use, or by investing in more efficiency machinery and lighting.

Madson says the charges appear designed to stop the rollout of commercial-scale solar in Queensland. “The changes are clever in their design,” Madson told RenewEconomy. “They do not actually result in an increase in total electricity costs, and in some cases they actually cause a fall. But they kill the possibility of reducing the bills by installing solar. ”How can they charge $500 a day to read the meter, that is what the daily service charge is after all.”

The QCA, and the state government has long been accused of acting only to protect the interests of the network operators and retailers, and to boost the dividends paid to the government. Last year, as RenewEconomy reported, QCA came out in favour of special tariffs on residential solar customers, even though it admitted that they would be more costly, ineffective, unfair and possibly illegal. But they favoured the move because it would protect network revenues.

The raising of fixed charges has been a common response among utilities fearing the impact of rooftop solar and a “death spiral” of falling revenues on a fixed asset base.

Analysts such as Morgan Stanley have ridiculed the practice of imposing high fixed charges, saying it was ultimately self-defeating and could simply accelerate that death spiral, and encourage people to go off-grid, particularly when battery storage became commercially viable. “There may be a ‘tipping point’ that causes customers to seek an off-grid approach — higher fixed charges to distributed generation customers are likely to drive more battery purchases and exits from the grid,” the Morgan Stanley researchers wrote.

Madson agrees: “In three years’ time (when battery storage improves), this will also be enough for a mass exodus from the grid altogether.”

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