Stop the Solar Rip-off

Electricity companies have used the introduction of the South Australian solar feed-in premium laws to make a windfall profit at taxpayers’ expense, at the same time as ripping off households who produce power from the solar panels on their roof.

Before July 1 2008, when the scheme commenced, companies like Origin and AGL paid households 16-24c/ kilo watt hour (kWh) for the electricity they produced from their solar panels. Since July 1, when the 44c/kilo watt hour premium came into law, some retailers have chosen to replace what they were already paying to households rather than making the new premium additional.

So instead of earning 20c/kWh from the retailer plus 44c/kWh from the solar premium = 64c/kWh, many people are only getting the 44c/kWh passed on by their energy company. This makes a huge difference to the payback period for solar panels.

Electricity retailers were quite happy before July 1 to pay for the power generated from household solar cells (which saves them the cost of buying electricity from the wholesale market), but now they are choosing not to pay a cent for the electricity they are receiving.

This was definitely not the intention of the scheme. The feed-in incentive was intended to be on top of, not replace, what the electricity retailers were already paying.

The cost of the 44c/kWh feed-in premium is shared across all South Australian households. Therefore, ordinary South Australian electricity consumers are effectively paying almost half of the feed-in law benefit directly to the big end of town, not to the householder with the panels.

This will potentially deliver a windfall profit of about $350,000 (and possibly much higher) to big energy companies - money that should be going to households as an incentive to encourage more people to install solar panels, not as a subsidy to big energy retailers.

Companies like Origin and AGL are collecting windfall profits while expecting the rest of the community to pick up the tab for climate change action.