Based on the data collected by the Australian Bureau of Statistics, one in five Australian households now use solar power. Although it is clear that solar energy is saving homeowners a lot in their energy bills, it is not widely known that a homeowner choosing to install solar panels also reduces his neighbour’s electricity bill.
The cost of Australian household electricity is a prime contributor to the cost of living and the ability of each homeowner to balance a budget. The cost of residential power bills also featuring highly in the recently scrapped RET.
Solar panels and the Australian energy market
However, if government officials are really serious about cutting the prices of electricity, they should give a closer look at the rooftops of 1.3 million Australians.
This is how the system works: the ‘merit order system’ is used by the Australian energy market to figure out the cost of a household’s electricity. This system requires energy generators to bid in order to sell their energy on the market.
The market operator then chooses the lowest bidder, working up to the more expensive bidders to buy energy, until it is able to meet the energy requirements of every household in an area at that particular time.
Meanwhile, those who have solar panels installed in their rooftops reduce the demand for energy since their electricity comes from their solar systems, especially when the sun is up and when the energy demand is at its peak.
Households using solar energy ‘cancelling out’ of expensive energy bids
The result of this process is the same as ‘cancelling out’ some of the more expensive bids in the energy system. This makes all energy prices cheaper even if a certain household does not have solar panels installed in its roof.
Therefore, a government who is really serious about reducing the cost of electricity should seriously think of investing in household solar power. This will really facilitate the cost savings across the network for every energy user.
Instead of scrapping the Renewable Energy Target (RET), the government should instead support initiatives that will help a community install more solar systems, not less. The RET is currently targeting 41,000 GWh by 2020, but this figure is now being reviewed.
Data shows that reducing the RET will only increase the cost of rooftop solar by up to 50 per cent. This will effectively make it inaccessible to ordinary Australian households.
Scrapping of the RET set to increase the cost of solar rooftop installations
An energy networks investigation conducted by a Federal Senate Inquiry also found out that solar rooftop owners felt that they have been treated unfairly by the big energy companies.
These people also experienced their service charges increasing after solar installation. Additionally, they were also charged exorbitant fees if they install solar poles and wires in rural areas.
These attack by power companies towards solar panels and the RET is motivated by their profits, rather than easing the plight of Australians from the pressure of higher cost of living expenses.
If the federal government decides to reduce the RET, the country will experience higher power prices. Therefore, it is for the good of all Australian citizens to protect the RET whether they are using a solar panels or not.
