Households Advised to Compare Solar Sharer Offers for Maximum Savings
Families are being advised to explore various options to optimise their savings under the newly enforced Solar Sharer tariffs, as a recent report reveals striking differences between the standard tariff and some market alternatives.
A briefing note issued by IEEFA Australia highlights that consumers can save hundreds or even thousands of pounds annually by utilising tariffs that offer free electricity during daytime hours, provided they have the right technology and adapt their behaviours accordingly.
Understanding the Solar Sharer Offer
The Solar Sharer Offer (SSO), which became accessible to consumers through the Australian Energy Regulator’s Default Market Offer (DMO) from July, allows users in Queensland and New South Wales three hours of complimentary power between 11am and 2pm, and in South Australia from 12pm to 3pm. A similar offer for Victoria is set to launch in October.
This scheme mandates all electricity retailers to provide a default SSO designed as an “opt-in energy plan” for customers equipped with smart meters, not limited to those under the DMO.
Analysis of Tariffs and Consumer Benefits
The default SSO entails elevated rates during the periods before and after the free electricity hours, a strategy implemented to enable retailers to recoup their costs. Additionally, this default sets a limit on the amount of free grid electricity—currently capped at 24 kWh—that households can utilise per day. Any consumption beyond this cap typically incurs higher peak or shoulder rates.
Criticism concerning the default SSO has emerged, suggesting that although the plan is designed to share solar savings with consumers unable to install solar panels, its structure might inadvertently increase bills for some households.
IEEFA argues that large families or those owning multiple electric vehicles may inadvertently exceed the daily cap or consume power outside the designated three-hour window. In contrast, market-oriented solar sharer tariffs generally offer longer periods of free power, significantly higher caps—such as GloBird Energy’s 50 kWh—or even no caps at all, provided fair usage policies are followed (e.g. OVO Energy).
Exploring Competitive Market Offers
Research indicates that switching to the regulated solar sharer tariff yields varying results for households with solar panels and batteries, revealing no savings in Brisbane, moderate savings in Sydney and Adelaide, and notable savings in Melbourne. The disparity between the regulated offer and the most advantageous market solar sharer tariffs is remarkable.
At least two retailers are now providing solar sharer tariffs with a generous four-hour window of complimentary electricity, alongside others presenting various alternatives, such as a limited two-hour free window with reduced peak charges. Some plans even combine free solar sharer intervals with attractive evening export rates, making them appealing for households with batteries but no solar power.
Jay Gordon, an analyst at IEEFA, commented, “Our findings consistently reveal that market-driven solar sharer plans often deliver greater savings compared to regulated offerings.” Some of these plans offer lucrative evening feed-in tariffs, thereby rewarding households for sending energy back to the grid from their batteries—an approach that can enhance the overall energy system.
Regulatory Recommendations
The report suggests that while it is reasonable to anticipate the retail electricity market to present more competitive products than the default option, regulators need to scrutinise these market offerings for potential enhancements to the default schemes to boost their efficacy.
IEEFA proposes several adjustments, such as extending the hours of complimentary electricity for part of the year, instituting a standard minimum evening feed-in tariff, or reevaluating the 24 kWh daily limit.
Cost-Saving Opportunities and Barriers
For households that opt for either the default SSO or more attractive retail offerings, significant savings can be achieved through strategic utilisation of free power. Households can harness this energy to charge home batteries or electric vehicles, enabling them to shift power usage to peak times.
Non-solar homes capable of purchasing a 20 kilowatt-hour (kWh) battery could potentially save between $1,377 and $2,202 annually by storing this free electricity and using it during peak hours. Furthermore, a standard apartment without solar could save an additional $366 to $644 per year by installing a 5 kWh storage system and switching to a solar sharer tariff.
Homes equipped with electric hot water systems can unlock annual savings of between $577 and $1,028 by timing their energy use to coincide with midday free power, while those with gas hot water systems may see savings of $323 to $623 yearly by transitioning to electric systems controlled by timers.
Additionally, a household with a single electric vehicle could save between $731 and $893 by charging during the free hours, while homes with two electric vehicles could experience savings ranging from $1,341 to $2,257.
Challenges to Overcome
Despite these potential benefits, the report identifies significant barriers that could hinder the effectiveness of the solar sharer scheme. The continued reliance on gas appliances in roughly half of Australian homes, particularly rental properties, poses challenges, as does the existence of regulations preventing access to portable home battery units.
“For households to realise savings from Solar Sharer schemes, they must have electric appliances for significant energy demands,” the report explains. “Households with gas systems will likely see diminished benefits from battery solutions.”
To enable more widespread access to flexible energy solutions, IEEFA recommends a federal review aimed at fostering the adoption of plug-in solar and battery products, including necessary updates to technical standards for safe installations in residential settings.
Gordon concludes, “Households that are unable to adjust their energy consumption are unlikely to reap the benefits of solar sharer tariffs. For broader participation, it’s essential for governments to prioritise policies that facilitate greater adoption of flexible electric appliances and energy solutions for renters and apartments.”
