Like any other business, electricity retailers strive to increase profits and retain as many customers as possible. With energy use in decline and renewable energy gaining an ever-increasing footprint across Australia, they are always trying to find new ways to recoup revenue lost when customers install solar panels.
As consumers we can either pay what they demand or look for alternatives, but what would it take for us to leave the grid altogether?
How your bill has changed for the worse
In recent times there has been a philosophy shift among retailers, charging less per kWh consumed but increasing fixed fees. Traditionally charging per kWh generated more than enough revenue to fund network expansion and maintenance to existing infrastructure.
In the modern age, this is simply not the case. Through over-reaching and sometimes unnecessary infrastructure upgrades, the network operators are now seeking a larger piece of the pie than ever. This is a loggerheads with the public appetite for affordable energy alternatives.
Individuals and businesses looking to reduce their electricity bills are turning to solar power systems in such alarming numbers that the incumbent operators are starting to get worried. As such, retailers are subtly adjusting their billing system with higher fixed fees, consumers will no longer simply pay for what they use.
As a side-effect, this means that the dream of completely eradicating your electricity bill is virtually impossible for those considering solar for their homes. Even if a solar system is perfectly sized to compensate for all the daily household electricity usage, consumers will still have to pay the connection fee and thus contribute to, and in some cases subsidise, the cost of maintaining the grid relative to their power usage.
Overcharge at your peril
Ross Garnaut, a leading economist and former Labor party climate change advisor, is now warning that this trend away from a “pay for what you use” pricing system could have unintended consequences.
“The unintended consequence of applying fixed charges indiscriminately is uneconomically large incentives to disconnect from the grid,” says Garnaut.
As energy advisers ourselves, we see our fair share of customers unhappy with their electricity providers, but is it realistic to assume there will eventually be a mass-defection from the grid altogether?
Currently, leaving the electricity grid is an expensive exercise, and it’s one that we wouldn’t recommend unless it was necessary. However research conducted by the CSIRO a few years ago suggests that as energy storage becomes an affordable reality as many as one third of Australians would be willing to decouple themselves from the grid altogether.
Already solar storage systems allow battery banks to be charged throughout the peak solar hours of the day for use later in the evening – all before anything is drawn from the mains power.
Although leaving the grid completely remains cost-prohibitive for most, storage options illustrate the public’s intent. If demand continues to decrease, and fixed fees continue to increase this isn’t as unlikely as it sounds.