Almost 200,000 WA households with solar panels will be spared increases to their power bills worth hundreds of dollars a year as the State Government backs away from plans to shake up electricity tariffs.
Two years after the increases were mooted and a year after Treasurer Mike Nahan announced a review, The West Australian understands the Government has shelved plans to recover the huge cost to the grid caused by solar panels.
It had been pushing to overhaul electricity tariffs so that households paid significantly more in fixed charges.
Under the current tariff system, most of a householder’s electricity bill stems from the amount of electricity used. Fixed costs such as the supply charge by comparison, make up only about 15 per cent of the bill.
The rapid uptake of solar panels has thrown the tariff structure into chaos, with households that have the systems drawing far less power from the grid but costing the same to service.
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Despite a short-term reprieve, households still face having to paying significantly more for the right to stay connected to the network as the Government moves to handball responsibility for the issue to electricity retailers.
Instead of pursuing the changes itself and facing a major public backlash, it is believed the Government will allow retailers to offer their own tariff structures when the market is thrown open to competition in coming years.
The backdown comes amid the continued popularity of solar panels in WA.
About 170,000 households in the South West grid have solar panels. The technology has slashed consumption for those households, cutting revenue to State-owned power companies, including retailer Synergy and network operator Western Power.
The situation has prompted warnings from energy chiefs of a potential “death spiral”, in which people install solar panels to avoid rising power prices, forcing tariffs higher to cover the costs and fuelling the rate of solar uptake.
WA’s economic watchdog Economic Regulation Authority has also called the trend inequitable, arguing poorer households that cannot afford solar panels are being disadvantaged by those which can. Dr Nahan said the Government continued to work on how to best address the issue.
“There is still a long way to go but we think there is a better way to tackle this, one that is more innovative, more equitable and one that fits in with technological changes in the future,” he said.
Any changes to electricity fees and charges would be outlined in Thursday’s State Budget, Dr Nahan added.