Updated: Mar 31
With the release of the Australian Energy Market Commission draft determination on how to integrate more small-scale solar – and other new energy technology like batteries – into the electricity grid, we provide our thoughts and recommendations about the proposed changes, what it means for you, and how you can maximise the value from your existing or new Solar PV (rooftop solar) system.
In simple terms, this paper is focusing on what changes are required to ensure that electricity generated by Solar PV is able to be sustainably integrated and managed as part of the entire electricity grid. The proposed changes address a number of shortcomings of the current market operation (including the 'traffic jam' claim that at times 'too much' Solar PV is causing grid 'blockages'), and ensure that Solar PV can continue to be deployed. Continued deployment of solar PV brings significant benefits, including increasing the amount of electricity that is generated by renewable sources. This is extremely important not only for the environment, but also for the ongoing operational and commercial sustainability of the electricity grid, and will help contribute to a healthy Australian economy.
So, will these proposed changes impact you, and what can you do to maximise the benefits? The answer is slightly different depending on your position:
If you have Solar PV system already installed.
If you already have a Solar PV installation these changes mean it will become more valuable to utilise the electricity that you are producing rather than exporting excess electricity into the grid when it is not required. This is because the changes mean that solar feed-in tariff benefits from electricity retailers will decrease.
The simplest way to view it, is that the electricity you produce is considered 'free electricity' that does not attract the taxes, network (Transmission & Distribution) costs, and other maintenance costs for which grid supplied electricity is subject to. The highest efficiency you can achieve is to utilise as much of that 'free electricity' as possible.
Consider taking some time to review your existing power usage behaviours, to consider whether you could make any changes that would shift electricity usage into periods where Solar PV generation is active. This will increase the efficiency of electricity usage and as a result, reduce your electricity costs.
Examples of changes that we have seen customers with rooftop solar make, which resulted in lower overall bills were:
Connecting hot water to solar instead of using Controlled Load;
Changing the timer on the pool to operate during Solar PV generating periods instead of at night, and;
Using appliances such as washing machines and dishwashers etc. during the day where possible.
There are also emerging opportunities for extracting value from Solar PV, that at this moment in time are still commercially constrained, that is the introduction and use of local storage - batteries. This is an emerging market with multiple emerging technologies. Over time costs will come down, and new opportunities and products will become available.
Consider in addition, the emerging electric car market. Solar PV + storage introduces an incentive to change your vehicle from a traditional internal combustion engine (ICE) vehicle to that of an electric vehicle, configuring your electric car charger to run during the peak solar generating periods, and thus achieving 'free fuel' for your electric car.
If you are considering installing Solar PV.
The most efficient installation is one that you use as close to 100% of the electricity that you generate, not one that has vast sums of excess electricity being produced, as it is unlikely to always be required by the grid at the time of production. If you are considering installing Solar PV, we recommend that you view the installation from the perspective of how you can reduce your electricity usage from the grid, and not as an opportunity to 'make money' by selling excess electricity into the grid.
The first step towards installation of Solar PV, is to request the installation of a Smart Meter to replace the existing basic meter/s in use at your premises. This is a no cost activity for Bright Spark Power customers, that we can arrange with you for your premises as part of your electricity plan (email us to request more information).
Once installed, the Smart Meter supports the collection of electricity usage time stamped throughout the day, which is accessible via your Customer Portal. This granular data will enable you to understand how much electricity usage you actually use during the periods of the day that are prime solar generating periods. With this granular data, you can then be in the position to make an informed decision as to how much Solar PV generation you will actually need.
And if you keep in mind that the most efficient solution is to use 100% of the electricity you generate, this means that you can more accurately target and install the most appropriate size Solar PV system to best meet your needs. In many cases, the size of the Solar PV system may in fact be much smaller than first realised, thus reducing the capital investment required to install your Solar PV.
Approaching this from a data based decision making position can also enable you to consider other aspects associated with the installation of a Solar PV system. Considerations such as:
whether the Solar PV solution installed is a Serial deployment utilising Micro-inverters (lower risk of major failure, higher generation output, superior assurance options, and is more easily able to be expanded at a later date)
or to install a parallel deployment installation with a single inverter unit (performance of parallel installations is limited to the lowest performing Solar PV Panel, increased single failure points, more difficult assurance options, and are difficult to upgrade).
As micro-inverter in-Serial installations are more expensive compared to the less efficient and less resilient in-Parallel installations, installing a smaller system than originally thought necessary can also allow for a superior quality solution (which can also be more easily be expanded if required at a later date) instead of a less efficient over-provisioned Solar PV system installation.
If you do not have or cannot get Solar PV.
If you do not have Solar PV or are unable to install Solar PV, then the impact of these discussions are a little more indirect, but meaningful none the less. The importance of integrating as much renewable energy generation into the electricity grid is better for our environment, better for reducing the cost of electricity generation, and better for the electricity grid health and operation.
As an individual that is not able to install Solar PV, these proposed changes will help to continue the evolution of the electricity grid, which will provide additional opportunities for you to reduce your electricity costs and to take advantage of newer technologies and commercial pricing that has previously been unavailable.
As industrial scale renewable generation continues to grow, the market as a whole will increasingly have access to the benefits that individuals with small scale Solar PV have been able to have access to, that is, increased availability of renewable electricity at progressively reduced usage pricing. This will unlock previously unavailable options such as the opportunity of changing to significantly reduced maintenance and fuel costs provided by changing your vehicle from a traditional internal combustion engine (ICE) vehicle to an electric vehicle.
New products and solutions to better take advantage of electric car charging during peak renewable generation periods will soon be available which would only be possible by the types of changes and evolution in the electricity grid that the AEMC paper describes.
It is our hope that this article provides an overview and suggestions on how you can make the most from the proposed changes to the electricity market as they become to come into effect. The next decade is going to be a period of significant change for the electricity network, and have impact on the retail market as a result. One of our core objectives is to help the transition to increased renewable generation, of which these changes encompass. As new technologies and market changes become available, we will continue to provide our customers support and recommendations to help them get the most out of their electricity service, in the most simple way possible.
As always, if you have any questions about how your particular scenario is impacted by these changes, or you would like to discuss with us what you could do to maximise your efficiency from your existing or proposed Solar PV solution, send us an email at email@example.com or give us a call on 1300 010 277 Monday to Friday between 8:00am to 6:00pm. We are happy to help.