How Australia can support more sun for everyone

Solar households have been able to significantly cut the size of their bills by using the sun to power their own energy use and being paid to export their excess energy back to the electricity grid.

This take up of rooftop solar as a renewable energy source is an important contribution towards acting on climate change and reducing power prices. This is an Australian success story.

However, the design of our energy grid has seriously lagged behind Australian households.

The rapid take up of rooftop solar has outstripped the current capacity of the energy grid.

In many parts of the country, the energy grid is not able to cope with the level of solar energy being export to it, particularly when the sun is bright and demand for energy is low.

In some locations, household solar energy is now going to waste and new customers are being prevented from exporting their solar energy at all.

We are rapidly reaching the point where many solar systems won't be able to export to the grid.

That's not good, it will halt the growth of solar, people's ability to saving on their energy bills plummet and decarbonisation slows.

The current limits in the energy grid needs to be fixed if our Australian success story of rooftop solar is to continue.

But there is a solution. We can upgrade the grid in ways that increase the hosting capacity so current solar owners no longer face export limits and another 2.1 million plus households can install and export solar.

More households save on their energy bill and more clean energy can be exported to the grid.

After a year of consultation, the Australian Energy Market Commission has proposed a suit of changes to energy market rules that will require grid operators to make smart investments in the grid to support more energy exports like solar.

It will also enable costs for the smart investment to be recovered through export tariffs rather than consumption tariffs.

This means that households that benefit the most by being able to export their energy will contribute more to the grid improvements and people who don't export energy and benefit less will contribute less.

We support these proposed rule changes as a crucial next step to accelerate household use and supply of solar energy in a fair and equitable way.

Right now, access to solar power is heavily confined to people who own their homes, with renters and people experiencing financial disadvantage being largely excluded.

Every household deserves affordable power. There are three million people in poverty who spend disproportionality more of the income on power bills. They pay more in four different ways.

Firstly, most of the current solar investments for households are being funded by adding costs to energy bills, which means that people experiencing financial disadvantage, who get least benefit from the subsidies, are paying proportionately more for them to be delivered.

Secondly, they are forced to use more energy because they can't afford energy efficient measures.

Thirdly, they are largely excluded from generating their own energy.

Fourthly, because grid costs are partially recovered via how much energy households use and, as noted, financially disadvantaged households are less able to reduce or generate their own energy, they pay proportionately more for the costs of essential grid maintenance, upgrades and enhancements.

So how energy grid upgrade costs are recovered through power bills matter.

The change would ensure that current solar owners will still maintain financial benefits, and some solar owners would gain in terms of financial benefits.

Solar owners would not be forced to pay every time they export to the grid and would be given options to manage their solar exports.

Those who are currently export limited could have a choice to pay to export over the limit and earn more than they currently do.

Part of the proposals is to also reward solar owners more when they export solar energy to the grid when the grid needs it.

So, savvy solar owners should be able to come out ahead.

Importantly, the changes help accelerate the clean energy transition.

Solar owners would be contributing to enable the growth of solar and energy exports, which will help Australia transition to 100 per cent renewables and zero emissions faster.

This initiative would reduce electricity bills for people who rent, live in apartments or are financially disadvantaged and therefore can't access solar, while maintaining significant financial benefits for those who are able to access solar.

It ensures we have the electricity grid of the future that supports rapid decarbonisation, readies us for the increasing variety of household and community energy technologies such as electric vehicle and batteries; and supports a just and fair transition to a net zero economy.

Over the last year, we have seen the powerful benefits that flow when we work with evidence and take a whole of community view, ensuring no one is being left behind.

We must back the changes needed to our energy grid in a way that ensures we don't leave people with the least behind.

Dr Cassandra Goldie is the chief executive of the Australian Council of Social Service, which advocates for action to reduce poverty and inequality.