28/06/2025
☀️💸UNDERSTANDING THE 'SOLAR TAX' (two-way pricing), effective 1st July 💸☀️
If you have solar PV, or are considering getting it, it's a good idea to understand "two-way pricing" whereby you can be charged for exporting excess solar power back to the grid. It's currently being phased in, with some significant changes from 1st July 2025. I'll do a brief summary of the financial implications, and ways to avoid it, with links below to more detailed information for NSW residents on the Ausgrid and Essential Energy networks.
In effect, two way pricing means homes with solar won't always receive a credit when they sell their solar power to the grid. Gone are the days when it was financially viable to cover your roof in solar panels and pay for them in a few years by exporting most of the power they produced back to your energy retailer. That doesn't mean that solar is no longer a good idea financially, you just need to be more strategic about the equipment you install, relative to the power you need.
⚡HOW MUCH will we be charged?
The amounts charged for exporting solar energy will quite small, and depend on where you live, which determines which network provider supplies your energy, for example Ausgrid in Sydney area or Essential Energy in the rest of NSW. These providers have indicated how much they will be charging, but ultimately it will be up to your energy retailer (who bills you) to determine how they pass this on to you. It likely that the amounts will vary depending on the retailer and the plan you're on. As a guide though, here's what Ausgrid and Essential are indicating the prices will be:
💸 Ausgrid: 1.2 cents per kWh, between 10am - 3pm
💸 Essential Energy: 0.7 cents per kWh (10-3)
There are however 'free thresholds', so you only pay these fees after you have exported some energy for "free". For Essential that's 7.5 kWh and Ausgrid it's 6.8 kWh. Sounds reasonable, until you remember that until now you've probably been earning about 5 cents per kWh for that energy, rather than nothing.
⚡WHEN will this start?
You may have heard that this is starting from 1st July 2025 for Essential Energy customers, and already started in July 2024 for Ausgrid. However, it has been an 'opt in' program for Ausgrid until now, and for Essential customers will be opt in for many solar households until 2028. There are some circumstances when it will start sooner, such as when you:
* install a battery,
* install new solar, or upgrade
* install a smart meter
* start a new energy connection.
So one upshot is that all the households taking advantage of the new battery rebate will automatically go onto two-way pricing.
⚡ HOW can I minimise how much I need to pay?
Some strategies to avoid paying for solar exports, in brief:
✅ If you're getting a solar system, size it to what you actually need, don't 'oversize' it - be wary of solar salespeople who tell you you need a system that produces much more energy than you could possibly use. One option is to seek independant analyis of optimum solar size but an energy advisor (like me!)
✅ Get battery storage, or an electric vehicle. Batteries and EVs give you a way of 'soaking' up your excess solar power during the day, instead of exporting it. Of course with an EV it needs to be home during the day to do that... And with a battery it needs to be the right size relative to your solar - if your solar is too big and battery too small, the battery will be fully charged by say 10am and then you'll start exporting anyway.
✅ 'Load shift' other appliances. 'Self-consumption' is still the best way to get financial value from solar. That is, schedule when you use appliances so they soak up the solar you're producing in the middle of the day, and you export less. The big players are electric hot water (see previous posts) and pool equipment if you have it.
One last point: the flip side to two way pricing is that there will be an OPPORTUNITY TO EARN more than the usual feed-in tariff if you export power when the grid needs it the most, in the early evening. For Essential customers that will be about 11 cents/kWh between 5-8pm, and Ausgrid: 2.3c/ kWh between 4-9pm. The Ausgrid figure is lower than what most people are getting now. And of course, because these times are mostly after the sun has set you'll only be able to earn these if you have a battery and get export from it to the grid.
It's all a bit complicated! or at least not what we're used to... but I hope that this post has helped clarify a few things for you.
If you'd like a more detailed appraisal of your optimal solar and battery requirements, I'm providing TAILORED CONSULTATIONS to households. The cost is $180 for
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