Review could mean higher charges for solar power users

SOLAR power generating homes connected to the electricity grid could pay higher charges following concerns from customers who haven't installed photovoltaic panels that they are subsidising solar owners.

Energy ministers have requested a review by the Australian Energy Market Commission into the energy market.

The AEMC is the independent body providing policy advice to governments on the electricity and gas sector.

In a report released yesterday, the AEMC said network charges on electricity bills will be examined as part of the consumer priority component of the review.

Network charges typically make up 30-50% of an electricity bill, depending on where you live.

Lismore had the most solar power installations in NSW - 3440 by April.

AEMC chairman John Pierce said stakeholders had questioned how increased network costs of solar installations are structured into network charges.

"One source of stakeholder concern is that network costs of consumers with rooftop solar PV are subsidised by other consumers because the full costs and benefits of distributed generation (such as solar PV) are not reflected in the prices consumers pay for electricity," he said.

Connecting a solar power system to the grid costs more in infrastructure and equipment than mains power.

"Where tariffs are based on the volumes of energy drawn from the grid, such consumers benefit from having the network infrastructure available without paying as much for that network as those without solar PV," the report says.

The review of network charges could result in incentives to reduce power consumption according to the report.

"More flexible, cost-reflective prices would provide incentives to reduce peak demand and minimise the cost of our electricity system over the longer term."

A final report on the review and its impact on prices will be released next year.

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