Regulator Hints Electricity Bills Finally Set To Drop
The NSW state regulator gave biggest hint yet that prices will finally dip
Finally, it seems there’s relief coming for households struggling with over-the-top electricity bills. The state price regulator has given his biggest hint that prices are on the way down.
Which means after four years of rising prices and electricity bill-shock, there may be some relief for Aussie households.
Solar panels are the clue to expected cuts. With an iPart decision about the price households with solar panels get when they feed electricity back into the grid giving a sign about prices in the future.
“The forward market indicates that the wholesale price will drop on average by about 40% next year,” iPart Chairman Peter Boxall said.
iPart recommends that, from July, the feed-in tariff drop from 12.8 to 7.5 cents per megawatt hour.
But when wholesale power prices drop, everybody wins.
However, while a 40% cut in wholesale electricity prices sounds big — and it is — consumers need to remember that just 40% of your bill is made up of that wholesale price. The majority of your bill is network charges — which is poles and wires.
Still, 40% of 40% means a 16% cut in your power bill — which is certainly very welcome after the recent year’s big increases.
But it’s the big electricity price rises that have caused an explosion in solar installations. With the rebates and subsidies available for homes who install solar panels, it can be an attractive prospective to homes who are able to pay the outright installation cost.
There is certainly a swell in interest in NSW, as solar panel specialists can attest.
“For us at the moment, demand is a bit endless. Inquiries come in every day,” Andrew Hanna from AHE Group — who provide and install solar panels — said.
Castle Hill-based Hanna is one of the top-rated solar installers in Sydney — he says the feed-in tariff should be higher.
“If they reduce (the feed-in tariff), that gives people less incentive to install a system,” Hanna said.
But the iPart Chairman argues that if the feed-in tariff is the same as the ordinary price of electricity — around 25c per megawatt hour — then everybody, with solar panels or not, would pay more.
“If we were to do that it would probably add around $50 to the bill of each household in NSW,” Boxall said.
Even so, the benefits of solar remain — including selling a percentage of their energy output back to the grid.
“For an average household, that exports say a third of their output, they save about $200,”
With big falls expected, the Federal Government stepped in, to make sure retailers don’t con you with discount offers that are nowhere near as good as they seem.
The new rules from the Australian Energy Market Commission came after a request from the Federal Government in late 2017, and mean that energy providers can only offer discounts on their standard rates, instead of offering discounts on higher rates which can be misleading to customers.
“Discounting can work to benefit consumers as long as the details are properly disclosed,” Mr Pierce told the Sydney Morning Herald.
“Big discounts on an energy offer can seem very attractive, but if the discount is only available because the price of energy is artificially inflated, the consumer can end up worse off,” Federal Minister Josh Frydenberg said. “The new rule will prevent retailers from attempting to confuse consumers, providing them with the confidence that a discount is exactly that – a discount.”