How will the end of the NSW Solar Bonus Scheme affect you?

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On the 31st of December 2016 the NSW Solar Bonus Scheme will expire, affecting 130,000 solar owners who currently export all their solar production to the grid at the subsidised Feed in Tariff (FiT) rate of 60c or 20c per kwh. From the 1st January 2016, the FiT will drop dramatically to around 6c per kwh; much lower than the rate that you are purchasing electricity at from the grid - resulting in a sizeable electricity bill, instead of a deposit in your bank account. Are you one of these solar owners?

NSW Solar Bonus Scheme expiry 2016

Although many of you may have benefited from receiving cheques from your energy retailer for a number of years, there will understandably be significant shock around your new electricity bill in 2017. In addition, you will need to have your gross meter removed and a new net meter installed, to allow you to self-consume on-site before exporting to the grid. 

The Department of Industries as well as energy retailers and industry bodies will be communicating with NSW solar owners about these changes (costs, options, requirements) over the next few weeks. There is likely to be conflicting information provided, and potential for confusion and mis-understanding amongst solar owners. In addition, there will be a variety of offers emerging from the energy retailers including potentially free smart meters and installation and a variety of rates, FiTs and contract requirements. The good news is that you definitely have options. Let's take a look at them:

1. Install a Net Meter

The most economical solution is to swap over your existing gross electricity meter for a new net meter. This will allow you to use your solar electricity in your home (called self consumption) before exporting any excess solar electricity to the grid. 

Many energy retailers will offer to install this new net meter for free since they can replace your existing meter with a 'smart meter' (see below for definition of smart meter) that provides them more frequent energy readings, and hence enables them to offer you a range of alternative energy plans. Some energy retailers are making this opt out, so unless you tell them otherwise they will automatically come and replace your existing gross meter for a net smart meter. Before accepting this change over it is important to check:

a) You will continue to receive your gross 60c FiT up until the 31st Dec, and then net from 1st Jan 2017, and
b) Will there be any changes to your your existing tarrif - this can only be done with your permission (other than regulated IPART rulings), and 
c) If there is a lock in contract period - we understand that many retailers will make this meter change without requiring a lock in contract, and
d) Any other benefits or offers the retailer will provide.

It is also essential to make sure your solar power system (panels, interverter, cabling) is functioning correctly and performing to capacity (solar monitoring will provide this). You will also need to understand how you consume electricity during the day (again, solar monitoring will provide this information), and make some serious adjustments to your usage habits to reduce your electricity bill. Many appliances, pool pumps and cleaners have timers that can be set to operate during your peak solar production periods.

2. Install a Net Meter and storage (batteries)

Batteries are still a little way from being economical in the short term for most people. If you would like to get a head start on solar battery use, or simply like the idea of minimising your reliance on the grid, then the addition of a battery (or batteries) may make sense. Batteries will enable you to store the solar energy that your solar power system produces during the day, and use it in the evening or at any time. You will need to install a new net meter in combination with your new storage system.

3. Choose Calculated Net Metering

If you want to move to net metering, but do not want to install a new meter, you may have the option of calculated net billing. If available, this is only going to be possible for customers in the AusGrid region (greater Sydney) since these customers have an Interval Meter. Refer to information on the AusGrid website. With this option, your energy retailer will continue to read your current meter physically, and calculate your net production, based on interval data. This option while technically feasible, is yet to be formally approved by AEMO (Australian Energy Market Operator), and also needs to be offered by the energy retailer. Check back with us as we find out further information on this option.

4. Do Nothing

This is the least economical of your options. If you choose to do nothing and stay with your gross meter, you will still be able to export all your solar to the grid, but at the reduced rate of around 6c per kwh from 1st January. You will still be off-setting your electricity costs, but only by a very small amount. You won't have to install a new net meter of any kind, and you won't need to renew or change contracts with your electricty provider. This option may be appropriate for people who are moving house and don't want the hassle or cost of these changes. Be aware that you will not be able to self-consume any of your solar production.

Net meter types

So! You've decided to install a net meter. Again, you have several options that you can choose from (see below). It's important to note that electricity meters are never owned by the residential owner or the electricity retailer, whether they pay for them or not. They are currently mostly owned by the Distributed Network Service Provider (DNSP, who also owns the poles and the lines in your area) - in NSW these are Transgrid, Ausgrid, Essential Energy and Endeavour Energy. In the future, all meters will be installed and owned by a private registered Meter Data Agent who provides this service to the energy retailer. You can read more about meter types on the Energy Networks Association website, but in a nutshell:

1. Basic Accumulation Meter

Basic accumulation meter

Image: Ausgrid

You may already have a basic accumulation meter in your home (about 70% of homes do). This meter only records the total energy consumption since the last meter reading. The electrcity retailer needs to send a person to your residence to physically read the meter and note the accumulated figure. The energy retailer can only bill you at a flat rate, and there are no monetary rewards for using less electricity or penalties for using more electricity at peak times.

2. Interval Meter

Image: Ausgrid

An interval meter collects your electricity consumption in 30 minute increments and stores it on-site. There is no communication device in a standard interval meter, so the electrity retailer needs to send a person to your residence to collect your consumption data. The electricity reader may use a device to download your consumption data, or they may simply read the accumulated usage amount (same as an old-school accumulation meter with one number reading). If the reader downloads the data, they can then take this information back to the electricity retailer who may offer you a Time Of Use rate (peak, off-peak or shoulder) and possibly other billing types.

3. Smart Meter

Image: Ausgrid

A smart meter (or 'advanced meter')  is an interval meter that can communicate via 3G with an energy retailer, and with internet-enabled appliances and in-home displays in your residence. Your electricity consumption is collected in 30 minute increments, which you can see via an online portal (or in-home display) and is intermittently transmitted to your electricity retailer. This allows the electricity retailers to offer different types of billing instead of billing you at a flat rate for the total accumulated electricity usage over three months. These different billing types can include Time Of Use rate (peak, off-peak or shoulder), high and low-demand rates, and shorter billing cycles. This can affect your electricity bill, depending on when you use your electricity the most. Without changing your consumption behaviour, there is the potential for electricity bills to increase for most users, with Time of Use billing in particular. There is also potential for your electricity retailer to change the Time Of Use times remotely to cater for issues like daylight savings, or other needs. See more about the use of Smart Meters in NSW here on the Department of Industries website.

What about a dual meter?

A dual or twin element meter is an accumulation meter, interval meter or advanced/smart meter that has both gross metering and net metering capabilities. This will allow you to export all your solar production to the grid at your bonus FiT right up until 31st December 2016, and you can close off the gross metering and switch to net metering on the 1st January 2017. You will then be able to measure your total solar production, and net energy consumption independently (useful if you don't have solar monitoring). However, it's not clear whether or not dual meters will be made available from energy retailers - keep an eye out for them. Check whether the net meter options from the energy retailers you are considering offer dual metering capability.

When should I change to net metering?

Here are the current options:

1. Find a Dual Element Meter

Check if your energy retailer can provide you with a net meter that can continue to provide gross metering right up until 31st December 2016. This meter may be referred to as a dual or twin element meter. If this option is available to you, it makes sense to install it at any time before the end of the year. Bear in mind that there will be an increased demand for qualified electricians and meters over time which may delay installation. You may also want to wait to see if any of the electricity retailers offer promotions on dual element meters with price and contract requirements that are acceptable to you. 

2. Wait for the Electricity Retailer Offers

There are likely to be offers made by most of the Electricity Retailers around the installation of a new net meter. You may elect to wait and see what each retailer offers - whether they are standard interval meters, smart meters, or dual element smart meters, for free, subsidised, at differing rates, tariffs, and/or contract requirements. Your electricity network distributor (not your retailer), may be able to install these meters in conjunction with your gross meter, and then switch to net metering in the new year (check your retailer contract very carefully). If not, it makes sense to have the net meter installed late in the year so that you can continue to take advantage of your bonus FiT for as long as possible. Bear in mind that there will be increased demand at the end of the year, and you may risk installation being delayed until the new year.

Intelligent solar monitoring

Even the most sophisticated advanced/smart meter is relatively dumb. It is only going to give you 30 minute interval data, a day behind, and a range of capabilities that tip the balance of benefit to the energy retailer or DNSP, rather than the consumer.

An intelligent solution is to install the Solar Analytics smart monitor in addition to your net meter (of any type) to measure live solar energy generation and household consumption in real-time (5 seconds), providing a whole host of extra value and savings opportunities. The Solar Analytics smart monitor will provide you with a beautifully-designed overview of all your real-time energy consumption and solar production data so you can change your usage habits and seriously reduce your new electricity bill in 2017. Monitoring will also provide advice on whether your solar power system is performing to capacity, and how to change it so that it will. It will continue to monitor at all times in 5 second increments and notify you as soon as there are any faults that need to be rectified; great insurance for when you need to keep those panels functioning at high capacity.

Find out more about intelligent solar monitoring here

Please feel free to leave comments below with any other questions you might have.