A proposal for households with rooftop solar panels to be charged for exporting electricity into the power grid at certain times has been softened, with regulators guaranteeing a “free option” under which people will not face any cost.
The Australian Energy Market Commission said its final decision on changes designed to prevent “traffic jams” of electricity at sunny times in the middle of the day, would also prevent network operators placing a blanket ban on customers sending energy to the grid.
Under changes to be announced on Thursday, electricity network companies would have to offer solar customers an option under which they would not face a financial penalty, but would probably face a limit on how much electricity they can export.
Other options would involve solar users paying an upfront cost in return for being paid a higher rate for energy exported when demand for grid electricity is higher. One of the goals of the paid option is to make it more attractive for people to invest in batteries, electric vehicles (EVs) and appliances that allow them to timeshift household energy use.
The commission said proposed network offers for solar offers would be assessed by the Australian Energy Regulator, which would have to consider the “long-term consumer interest”. Existing solar customers would not move on to the new system before July 2025.
The shift follows a pushback against a draft declaration in March that critics said could penalise people who had installed solar in good faith and give too much power to networks in proposing consumer charges. A final decision was delayed due to the extent of public feedback.
In a statement released to media ahead of the final announcement, the commission said the changes would impose “tough new obligations” on network companies requiring them to make their businesses solar and battery friendly. It said it was part of a plan to have more solar households, cut greenhouse gas emissions and keep costs down.
The commission’s chief executive, Benn Barr, said it had listened to feedback and tightened protections for consumers to ensure people would not have to pay to export solar if they chose not to. He said people could earn by sending electricity to the grid when it was needed, or save by using delay-start functions to set appliances such as dishwashers to run on solar energy in the middle of the day.
The commission’s chair, Anna Collyer, said it would turn the “current one-way street delivering power to people’s homes into a two-way super-highway where energy flows in both directions”.
“Power network companies will need to deliver services to support solar and they’ll be judged on their performance on how much solar exports they allow into the grid,” she said. “These new measures to drive smart solar are fundamental to enabling a modern electricity grid.”
She said the changes reflected widespread concern from industry, consumers and environment groups that the grid would not be able to handle a forecast doubling of household solar power over the next decade.
About 2.8m Australian households now have solar systems. At peak moments in the middle of the day, slightly more than half the electricity across the national market is from renewable sources, compared with about 30% across the year.
Advocacy group Solar Citizens has been sharply critical of the commission’s proposed change, describing it as a “sun tax”. It argued solar users should be rewarded for helping cut emissions, and that changing the rules after the fact was unfair.
But the fairness principle was also invoked by those broadly supportive of the commission’s proposal. The change was a response to proposals from power distribution company SA Power Networks, the Total Environment Centre and welfare organisations the Australian Council of Social Service (Acoss) and St Vincent de Paul.
Kellie Caught, senior adviser on climate and energy for Acoss, has said the country needed a rapid transition to renewable energy, but increased network costs to deal with the influx of household solar should not be paid by people without panels, including the third of households who rent.
She told Guardian Australia last month it was important that people with solar were given a choice over whether they paid to send electricity to the grid at busy times or could accept a limit on how much they exported.
State governments raised concerns about the commission’s draft proposal to varying degrees. Victoria and Queensland indicated they did not support export charges.
The commission estimated under a worst-case scenario solar owners choosing paid plans would still earn at least 90% of what they do now from their panels. It said it should lead to a power bill reduction for 80% of customers.