As solar power adoption grows, so do the challenges of managing energy distribution. Ausgrid, the largest electricity distributor on Australia’s east coast, is set to introduce a new pricing model to address these challenges. Starting in July, solar owners in New South Wales will experience two-way pricing, a strategy designed to balance grid stability and incentivize efficient energy use. Here’s an in-depth look at what this means for solar consumers.
What is Two-Way Pricing?
Two-way pricing, also known as a two-way tariff, differentiates between peak and off-peak electricity exports. Unlike traditional feed-in tariffs, which offer a flat rate for all solar exports, two-way pricing applies different rates based on the time of day. This model encourage solar owners to optimize their energy consumption and export patterns, aligning with grid demand and supply.
Ausgrid’s Approach
Ausgrid’s two-way pricing plan involves both charges and rewards to manage solar energy exports effectively:
Charge for Midday Exports: Solar electricity exported between 10 am and 3 pm will incur a charge of 1.2 cents per kilowatt-hour (c/kWh). This period typically sees the highest solar generation, leading to network stability issues if not managed properly.
Reward for Evening Exports: Exports during peak demand hours (4 pm to 9 pm) will earn a credit of 2.3 c/kWh. This incentivizes solar owners to store energy during the day and export it when the grid needs it most.
Free Threshold: A certain amount of solar energy can be exported during the day without charge. This threshold varies monthly, ranging from 192 kWh to 212 kWh, providing some leeway for solar owners.
Impact on Solar Owners
For most solar owners, the financial impact of Ausgrid’s two-way pricing will be minimal. Here’s a breakdown based on Ausgrid’s example:
November Scenario: A system exporting 307 kWh during the 10 am – 3 pm window will incur charges for 102 kWh after the free threshold is applied, resulting in a charge of approximately $1.19 for the month. Conversely, exporting 52 kWh during peak hours earns $1.21, leading to a net credit of 2 cents.
During winter, when evening solar exports are minimal, the net impact might slightly increase. Overall, a typical solar customer with a 5 kW system could see an annual bill increase of around $6.60. However, this will vary based on individual energy consumption patterns and system sizes.
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Encouraging Efficient Energy Use
The core aim of two-way pricing is to motivate solar owners to maximize self-consumption and manage exports effectively. By encouraging energy use during peak solar generation times and exporting during high-demand periods, Ausgrid hopes to alleviate grid stress and enhance stability.
Comparison with Other DNSPs
Other Distributed Network Service Providers (DNSPs) are exploring different methods to manage solar export congestion. For example:
South Australia’s SAPN: Implementing dynamic solar exports, where inverter outputs are remotely adjusted based on real-time network conditions.
Victoria’s Initiative: Requiring all new inverters to support remote and dynamic export limit adjustments.
Conclusion
Ausgrid’s two-way pricing model is a significant step towards modernizing electricity tariffs to better integrate solar power into the grid. While the financial impact on individual solar owners may be modest, the broader benefits of enhanced grid stability and incentivized efficient energy use are substantial. As this model rolls out, it will be crucial for consumers to stay informed and adjust their energy consumption habits to maximize their benefits.
