Power network reforms to help solar get on the grid

Reforms designed to inject more small-scale solar into the grid, and support the growth of batteries and electric vehicles, have been finalised by the Australian Energy Market Commission (AEMC).

The reforms will obligate power network companies to make their networks ‘smarter’ and their businesses solar- and battery friendly. A key part of the changes will remove companies’ ability to put blanket bans on customers sending solar energy back to the grid. Power networks will be able to offer a range of options — including a basic free service — to encourage solar owners to limit solar waste, save money and benefit the grid.

The reforms are part of a long-term sustainable plan to have more customers benefit from solar, put downward pressure on electricity prices and help decarbonise the energy sector faster.

“These new measures to drive smart solar are fundamental to enabling a modern electricity grid that delivers out to 2030 and beyond,” AEMC Chair Anna Collyer said.

“They represent a profound change to the way poles and wires businesses must think about how they manage their network and turn the current one-way street delivering power to people’s homes into a two-way super-highway where energy flows in both directions. Power network companies will need to deliver services to support solar — and they’ll be judged on their performance on how much solar exports they allow into the grid.”

The reforms acknowledge that Australia has the fastest rate of solar take-up in the world, and reflect concerns from industry, energy market bodies, consumer and environmental groups and other experts that without action, the grid will be unable to handle the volume of solar forecast to double over the next decade. This is already an issue for some solar owners who are being blocked from sending energy back to the grid to avoid daytime supply disruptions. The changes aim to move solar around to when it’s most needed so solar owners can get more from their panels and more solar can get onto the grid.

“By carving a path for smart solar, batteries and electric vehicles, more solar can be used, we will keep costs down for all consumers and protect the value of household solar investments already made,” Collyer said. “We don’t want to see solar going to waste. That costs everyone more because less cheap renewable energy gets into the system.”

“We’ve listened to the feedback we have received and have tightened protections for consumers to increase certainty,” AEMC Chief Executive Benn Barr said. This means networks will have to offer a free basic service alongside any paid solar export plans, so people won’t have to pay if they don’t want to. If they choose a paid plan where they earn more at some times and less at others, there will be more ways to earn and save.

“Those with a battery or an electric vehicle could earn for sending energy when it’s needed or save by consuming more of their own solar. There are smart devices and set-and-forget systems out there now to help customers navigate a more dynamic energy system — like delay start functions on dishwashers, and automated systems that control solar inverters to send energy when it’s most beneficial to the grid and the household budget. All of this can be as easy as using a mobile phone.

“This is about getting ahead of the curve and preparing the grid for change that is happening now and only going to accelerate over the next 10 years,” Barr said.

“Getting this right means adapting the grid to handle more solar in a smart way that keeps costs down, keeps significant financial benefits for those who choose to go solar and saves money on electricity bills for those who don’t or can’t. Getting it wrong means less clean energy in the system and existing and future solar and battery customers miss out.”

Smart solar reforms at a glance

• Obligations on power network businesses to support energy flowing both ways. Includes a performance framework, mandatory reporting on how companies are delivering on expectations to deliver more solar and removing blanket export bans.
• Power network companies will be able to offer a range of options — including a basic free service — to encourage solar owners to limit solar waste, save money and benefit the grid. Guaranteed free options will apply for 10-year periods up until 2041 when we will monitor the situation and make changes if required. Those choosing paid plans could earn more for solar export at some times and less at others but they’ll have more opportunities to earn and save.
• Australian Energy Regulator has oversight. All new network plans will be scrutinised and signed off as being in consumers’ interest. Networks will have to consult widely and test and trial the options they put forward.
• No new pricing plans for existing customers before July 2025 giving customers more certainty.
   

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