Solar Energy, Not the Cause Of Rising Electricity Prices


Let’s Get To The Bottom Of Misguided Claims Trying To Pin Renewable Energy As The Cause Of Electricity Prices Spikes

In an energy-rich country like Australia, it’s baffling that we’re plagued with extortionate power prices, that are forecasted to rise even further! These rising electricity prices have caused everyone to look for somewhere to blame and some Energy Retailers are hoping to take themselves out of the spotlight by claiming that the movement to renewables like solar energy is the biggest contribution to power bill increases.

Despite these misguided claims, there’s no evidence that renewables are the cause for price increases. In fact, for individuals, the most effective way to combat increasing energy retail prices is to use as little power from the main grid as possible. Households can do this by installing solar panels and battery storage, essentially giving themselves energy independence.

So, with the blame off renewable energy what is the cause of rising energy prices?

Electricity prices and fluctuations in rates are generally reflected in the costs associated with building, financing, maintaining, and operating power plants and the electricity grid.

Research done by the Clean Energy Council was able to break down the main factors of these associated costs showing 4 main components that contribute to electricity rates.
rising electricity prices

Generating Electricity (Wholesale Power)

Power prices and rates incorporate the costs of maintaining and upgrading supply networks. Due to old coal power plant closures in states like South Australia and Victoria, there is less supply in the market, which has hiked prices up due to operators needing to find new sources, in place of these plants.

Poles and Wires (The Grid)

Possibly the biggest contributor to power prices is the cost of the poles and wires that carry electricity from power plants to households and commercial properties. According to the Australian Competition and Consumer Commission, poles and wires were responsible for 48 per cent of the average residential electricity bill in 2015-2016.

Electricity Company Administration and Marketing Costs

Electricity companies have administration costs that assist in areas of the business like maintenance of databases and processes associated with billing. Marketing costs can also be a factor and may include money spent on research, advertising and implementing new promotions.

Environmental costs

Meeting the national Renewable Energy Target is a small component to power price rates. According to a recent inquiry into power prices by the Australian Competition and Consumer Commission, the cost of environment schemes makes up about 7 per cent of the average bill.

Defend Yourself Against Rising Power Rates

According to CEO of Energy Action, Ivan Slavich “The Government are doing all this advertising about prices going down, but prices are going up”. So how should you protect yourself from these price spikes and reduce your power bills?

Investing in solar energy for your home is the best defence against rising electricity prices. Not only will you be generating your own energy to use how you please, but with the addition of a solar battery, you are able to store the excess energy you don’t use throughout the day, to use during peak utility cost times.

Solar Government rebates, known as the Small-scale Renewable Scheme are still available across Australia which contributes to the initial costs of a solar system and the installation, as well as some states providing additional schemes to assist in the cost of batteries.

 Do you want to defend yourself against the price spikes of electricity?

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Understanding Batteries

Off-Grid Systems

For some households a battery system can be of great benefit and minimise a home’s reliance on the grid. However, it’s important to understand for a battery to be useful your solar system needs to be generating excess energy for the battery to store, which you can then use at night or when the sun is not out.

When selecting a battery, you’ll want to invest in a system that is most suited to your home and can drive the best return on investment (ROI). Despite a larger upfront cost, a higher quality battery may significantly increase your ROI.

    Battery systems start from $6,000 and costs can vary greatly based on the following factors:

  1. Cycle Life-Time

    The number of times a battery can fully charge and discharge.

  2. Battery Power (kW)

    How fast it can be charged or discharged.

  3. Storage Capacity (kWh)

    The maximum amount of energy a battery system can store.

  4. Battery Management System (BMS)

    An electronic ‘smart’ system that gathers data and manages the battery ensuring it does not overload or operate outside of its safe functioning zone..

  5. Inverter

    Battery systems require their own inverter if your solar system does not have a hybrid inverter.

  6. 'All-In-One Unit’

    A system which includes the battery, BMS and an inverter all in one unit.

  7. Warranty

    Length of time or cycles the battery system is under guarantee.

  8. Blackout Protection/Backup

    It’s important to note this is not a common feature of a battery system and could cost thousands of dollars to include. Blackout protection not only requires additional components but also a specialised installation and rewiring. For grid-connected homes, the cost for blackout protection can outweigh the benefit.

Additionally, if your purpose for adding battery is to go Off-Grid and become completely independent from the grid you will need to ensure your solar system can generate enough energy to power your home and your battery system is large enough to store this energy. For homes in metro areas going Off-grid is not cost effective and is only recommended for those in remote areas with limited access to the grid. Off-grid solar systems with battery start at approximately $30,000.

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