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Energy Retailers Tactics To Get Rid Of Solar Power

By Kristy Hoare on in Solar Power New Zealand

Energy Retailers Tactics To Get Rid Of Solar Power

I was not surprised at all to hear Meridian Energy's chief executive Mark Binns announce last week that he thinks solar power is producing a social divide.  He said that people who can't afford solar will be paying a higher cost for maintaining the grids and networks. 

Rather than just change the pricing to what they see fit, they have come out to make solar power look like the bad guy. But I suspect there's more going on behind the scenes.  Is it possible that Meridian and other energy retailers feel frightened by the disruptive nature of solar power and hiding it behind a social injustice?

The energy retailers approach is no surprise here because it's the exact same rhetoric Australians have been hearing from their electricity retailers for the last 5+ years. 

Solar has grown fast in Australia because of the Government subsides and feed-in tariffs.  The energy retailers have spoken out against solar power in any way they can - the large energy retails have argued this exact same point that Meridian are now claiming.

AGL one of Australia's largest energy retailers, along with other energy retailers, went as far as lobbying the Government to cut the Solar Feed-in tariff on the basis that it was a "regressive" tax that penalised other users.

In 2012 AGL put out warnings in the Australia media about the possibility of a "death spiral". The idea of a "death spiral" is that if consumers generate their own power from solar panels and supplement this at night with battery storage, they will opt out of the being on the grid completely. The network companies will have to charge their remaining customers higher prices for the cost of maintaining the grid. Higher prices in turn will drive more people to unhook from mains power.

But as of February 2015, AGL have done a U-turn and are offering a solar leasing arrangement to residential customers. It must be their plan B option; 'if we can't bet them, then join them'.

But the combined amount of anti-solar material that the energy retailers put out to the media would have seriously hurt the solar industry. Many Australian's are under the influence that solar power is a bad thing. And now AGL are trying to convince people to lease a solar power system of them - this is a massive contradiction.

The lines companies are becoming very anti-solar as well.  In October 2014, the lines companies said in a Herald article "Homeowners who install solar panels to cut their power bills are pushing up prices for everyone else, lines companies say".  With all this anti-solar media as of late, it sounds to me that we are going down the same exact track as Australia.

The fact of the matter is that grid-connect solar power owners are still connected to the grid.  They still pay for power bills, which includes the monthly lines charge (that $30 a month fee - they still have to pay that).  They still do use some power from the grid which, the incremental charge includes a percentage that goes towards the lines fees.  Because solar owners don't buy as much power, it is true that solar power owners don't contribute as much towards lines charges - but they are paying a proportional amount towards the lines costs to the electricity they use. Also remember that solar power makes up less than 1% of electricity generation in New Zealand, so there will not be a noticeable difference yet in the revenue going to the lines company.

It is argued that it is unfair that non-solar users will pay more for lines charges. Alright, if that is really the case - if the electricity authority can prove this then they should go ahead and put up the monthly lines fee for solar power owners.  It's not particularly tactful to be making solar power owners look like the bad guys without any proof. Especially for Meridian, who have lured thousands of new customers in by offering them a good buyback rate for solar power - then to pull the rate from under their feet (as of February 2015). 

We don't have to go down this road of the big energy companies attacking solar power to then do a U-turn in a few years time.  There is a way all companies can benefit from the solar power revolution.  Even the Energy and Resources Minister Simon Bridges says the industry will just have to deal with the situation... not what I would have expected Simon Bridges to say...

The transition to solar power is necessary.  It's not going to happen over night, so it will not hurt any large corporations as long as they realise they are going to have to change with the times.

Showing 3 comments

Posted by Ian Williamson on 14th Jul 2016 12:50:36

I agree with most of Kristy's comments but a slight point of clarification.
The line charge that is fixed (typically $30 approx) per month is supposed to be the local lines company charge and so long as you are grid connected you will pay that whether you use no power or lots. It is the lines company that are charging the higher rate for solar customers which is not fair as they are getting what they are meant to already.
They are actually referring to the transmission line costs which they don't pay but the retailer does (and you in every unit of power you use). If you use less they get less. but their losses are less on the network if the load is reduced due to back feeding

It would be good to challenge them in court for this "bogus" surcharge on solar customers.

Are they charging people with wind turbines? No
What if you change from electric to gas water heating and save 30-40% of your power bill. If their argument holds up in court then gas users should pay the surcharge.
Where will it end.

Posted by gerald weed on 14th Apr 2015 16:55:31

The german government put into law, That all energy companies re inverse the cost per unit to be the same as that supplied . A very fair deal I believe . Why could our government do the same . 'food for thought '

Posted by Robin Hoare (Rawene) on 6th Apr 2015 09:40:24

A fixed charge for line connection is reasonable and it should not depend on the power consumed: or generated. It shouldn't depend on where you live either, or there is a penalty for those of us who live on rural areas, where most of the country's wealth is produced.

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