Payment from electricity providers for solar feed-in?

Solar
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You also need to adjust each tariff for gst?

AGL show all charges and the FIT excluding GST.

GST Is simply a grossed up number at the bottom of the bill!
This disguises the comparison between exported power (credits) and the daily connection charges or purchased in power.

GST is not applicable (exempt supply) to the exported (FIT) power credits. It does however apply to the other charges.

Eg per our billing
FIT benefit: $ 0.20 per kWh gst exempt!
Usage cost: $ 0.255 displayed on bill
True usage cost: $ 0.2805 per kWh not displayed on bill

The difference between costs and credits is sub totalled without gst.
We paid $20.10 in gst on top of the bill calculated to be only $42.00. :upside_down_face:

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22

You are totally correct and I was aware but wanted to highlight a couple of points that may not have been obvious to potential Solar users.
The GST will get you every time.

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23

Since the GST is paid on the net bill (eg $consumption - $FiT = $charges, $charges+$GST= $bill) I do not understand your issue unless it is only pointing out that GST is and always has been payable by the end customer (at least since GST was ‘never ever’ going to be enacted).

edit:
I just analysed my final Red bill and it was educational. It was a dog’s breakfast because it included non-solar and then solar tariffs so was in multi-parts, with a single GST amount shown.

After using my trusty HP28C they did in fact add up a bill with the GST included, and then gave credit for the FiT sans GST applied to it.

I don’t know about every time, but now I understand…

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In our instance the true formula is

($consumption + $dailyconect + $meterread + $gst) - $FIT_no_gst = $bill

AGL if they were being more transparent would present the bottom lines on the bill, actuals rounded for this example.

$ 250.00 Supply charges and usage
$ 20.00 gst
————————
$ 270.00 total cost to supply
$ 210.00cr solar feed-in-Tariff
————————
$ 60.00 total due

Compare this with how AGL present the Bill

$ 250.00 Supply charges and usage
$ 210.00cr solar feed-in-Tariff
————————
$ 40.00 new charges and credits
$ 20.00 gst
————————
$ 60.00 total due

How AGL determined the gst amount is unfashionable from the bill as presented.

Optus used to do something equally confusing on our multiple user bill making it difficult to see how all the costs subtotalled and how the gst was applied.

P.s. we have a smart meter with mobile data connection device. The meter readings and billing have gaps for consumption and feed-in. I wonder why we pay for a solar metering charge?

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25

My provider seems to do this:

  • add off peak to peak, both excluding GST - for a total usage ex GST.
  • take total fed back (as an ex GST figure) from total usage.
  • result is a credit amount, ex GST
  • calculate GST on the credit amount
  • credit me the credit amount plus the calculated GST on the credit amount …

hmmm :slight_smile:

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26

I did take make the effort to ring AGL. After discussing the bill it was suggested by the service rep that I woukd be transferred to their resolutions team. However after the rep spoke to the team I was not transferred. I was advised I should wait until the next meter reading after which AGL would make any corrections and adjustments to my current bill.

Our dumb meter was changed out for a brand new smart meter one month into the billing cycle. The meter at new read zero. AGL reports the first meter reading as 7units?

When the plan changed 2 weeks after that to a better feedin tariff the end reading and start readings reported are also not the same. There is a gap in the readings. I suspect the smart meter is not so smart, or it may not be phoning home reliably or AGL is not getting the data, or option 4 on the answering service - ‘something else’.

There are three parties in this apparently. Energex, AGL, and Macquarie who own the meters. And a forth party who provides the mobile data link.
Perhaps they will revert back to a manual read!

While it may be practical and cost and time effective for AGL, I still miss being able to eye ball the person across the counter at the local electricity suppliers offices. It’s a little more satisfying and seemed to always get a result.

P.s. we do have a working ADSL2+ service. Perhaps if Energex upgraded our power line to include Fibre we could both benefit?

27

Just received my first Tango bill. Unlike Red it looks like they do the right thing and add the useage and supply charges, then credit the FiT to get a net balance, and then apply GST.

When the GST is applied prior to crediting the FiT would not the ATO be the beneficiary rather than the utility supplier?

Curious both approaches are apparently above board. One would have thought it would be defined by the responsible government and consistent. Looking back a few words I think I see the problem.

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28

Yes, it wouldn’t affect the income of the energy supplier…but would increase amount of GST paid by the customer.

29

This assumes that AGL remit all the GST collected according to the billing details?

I’m asking AGL in writing for a reconciliation of the GST against the line items noted on our bill?

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30

Then the ATO would be interested as it is possibly an offence under the relevant Act.

Usually businesses pass on all that is collected to the ATP as GST recepts are an accounting line item. To go back and dodgy the books would be a significant exercise, and a large company would not be able to keep it quiet (either through audits, whistle-blowers or disgruntled staff).

31

This might be relevant. …

32

I have a transcript of my web chat with AGL. It seemed easier than trying to email them a request. Especially since I failed to easily locate a customer email enquiry address.

Point 1
AGL apply Gst to every chargeable item on a bill.

Point 2
AGL also apply Gst to any credits due other than solar feedin tariff items.

Point 3
AGL does not add gst to any feedin tariff items.

Point 4
AGL add up all the charges including Gst before deducting any Credits.
Note some credits that include a Gst component also reduce the GST due.

Hence AGL apply Gst to all costs and charges before any feedin credit is applied.

It may not be apparent up front looking at a solar bill for the first time. The only GST amount shown on an AGL bill is the final amount included In the bill.

AGL could have a column next to each line on the bill with the applicable Gst amount (may be zero if exempt). For each line displayed it would be self evident. That’s how I was taught to show line items on an account by BHP and my accountant.

Alternately AGL could show the sub-totals of all the items to which Gst applies, and it would then be a simple 10% of the final sub-total prior to the credit for the GST exempt items (solar feed in).

Where subsequent bills include payment balance adjustments of prior bills, AGL’s bills as presented and the reconciliation of any gst credits may require some honours degree accounting assistance? :worried:

I’ve left some polite and direct suggestions re how the Bills might be better presented with the AGL service representative in the Chat Session record!
I’m still amazed at how the companies providing public services such as power and phone (that’s you Optus) are permitted to be so evasive about how Gst is applied in their billing. Perhaps we are not meant to know!

It is interesting to hear that perhaps other electricity retailers only apply Gst to the difference between consumption costs and feedin credits? My guess is the ATO pulls in closer to $2B yearly in gst from residential electricity usage? This would be much less the more solar PV generated.

In one instance exported PV is being treated as though it is a marketable item, that is Gst exempt.

In the other instance exported PV is simply being stored for your future benefit and returned to you by the retailer. There may be a cost for the storage, eg like car parking, but it is just your power you are getting back at a later time. So how can you apply Gst to something you already own?

Another interesting consideration in how to get the best return on your solar investment.

33

We’ve recently re-examined solar FITs and selling back to the grid is not looking good:

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34

IMO the article missed out one way that PV powered households can maximise their own production usage- by not facing all their panels to the North.
I wrote about my ‘Virtual Tracker’ concept back in 2013 here: https://forums.energymatters.com.au/solar-wind-gear/topic5064.html which increases morning and afternoon output, and removes the big solar noon peak.
Currently commercially available battery energy storage systems can’t pay for themselves on purely economic grounds, so energy diversion into hot water and panel arrangements similar to the virtual tracker offer a much better economic outcome in almost all cases.

EDIT: Michael Bloch sums up why commercially available batteries are far from a good idea in his blog post here: https://www.solarquotes.com.au/blog/solar-batteries-investment-mb1177/

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Feedin tariffs and the overall cost of electricity. We have a parallel thread on electricity price increases which is also relevant but with a different focus.

A recent blog on Solarquotes explored the current pricing trends with feed in tariffs.

A readable consumer friendly assessment of how and why.

Two takeaways that were surprising.

  • On the back of political debate over power pricing in the recent state election, Brisbane has potentially the lowest costs of electricity of all the capitals. There is a table and summary in the linked article. No need to reproduce it here.

  • There is a discussion on how to more fairly determine solar feed in tariffs. This might include payment for the energy exported at the full market rate as well as credits for environmental outcomes and avoided long distance transmission costs. That some customers with solar plans pay more for electricity purchased from the grid than those who don’t only complicates practical assessment.
    .

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36

The Energy Council of Australia has their own version of the latest CEC data on solar system uptake. It’s available as a downloadable PDF. You will need to follow the hyperlink to the ECA website and navigate to the following report.

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Of interest is the change in feed in tariffs in WA to a time of use basis. This has been applied to all new and upgraded solar PV systems from early November 2020. The previous very average 7.135c/kWh feed in tariff is now 3.0c/kWh except for the peak evening 3pm to 9pm period when it jumps to 10c/kWh.

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An observation is that WA still has control over it’s electricity industry. The cost of wholesale generation does not swing as wildly in WA as it does for the NEG where supply is contestable.

The real cost of electricity in WA Perth if a customer elects to move to a TOU tariff for supply is much greater than 10c/kWh. Canstar Blue:

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At near enough to 55c/kWh for peak consumption the payback on a battery would look almost reasonable. Although Customers currently still have the option to purchase electricity at an average fixed unit rate of approx 28.83c/kWh on top of the daily fixed connection charges.

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37

An article regarding falling solar feed-in tariffs.

"Then, on January 1, EnergyAustralia dropped its NSW feed-in tariff for customers from 10.5 cents per kWh to 9.5 cents per kWh.

That was followed by news of the another reduction, from 9.5 cents per kWh to 7.6 cents per kWh, that will come into effect from October 1."

If they think that those F.I.T’s suck, then they should try Ergon’s even lousier rates.

Solar feed-in tariff for regional Queensland

Customers in regional Queensland with an eligible solar power system can access the regional feed-in tariff for the power they export to the network.

The feed-in tariff for regional Queensland is set each year by the Queensland Competition Authority (QCA).

From 1 July 2021 RATE
All exports per kWh $0.06583
From 1 July 2020 RATE
All exports per kWh $0.07861
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38

Cross link…

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39

It’s a challenging question for consumers.
Is there a net benefit to all consumers from subsidising batteries?

For solar PV owners, there is a contradiction that large scale generators are not charged for the costs of the grid infrastructure. However ongoing proposals that rooftop solar exporters will be, is a significant consideration. The long standing industry practice has been that the costs of the grid are included in the cost of consumption, and not to supply.

There is an alternative to more investment in additional generation capacity. The article highlights the cost and environmental benefits of investing to increase residential storage as well as larger scale distributed energy resources.

My take as a Solar PV owner.
A residential battery reduces the amount of electricity we’d export in the middle of the day. This has a benefit in reducing the notional ‘reverse power flow’ impacts, IE demand fluctuations, on the grid. A second benefit is the ability to consume at peak times power from the home battery rather than the grid, reducing peak demand variations.

The double benefit to the NEG is less variation in demand, and less peak demand. For generation less variation is more efficient and hence lower costs to supply. For the grid there are reduced peak demands and less issues from ‘reverse power flow’. The current grid infrastructure is put under less stress, and pressure to upgrade.

P.S.
I’m not confident that a subsidy at this time would be all that cost effective. The ABC offers a similar observation. Subsidies tend to get taken up by the suppliers as increased profits rather than reduced costs to the purchaser. Supply and availability needs to exceed demand to create genuine competition. Residential batteries are currently very expensive (over priced)?

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I agree, and causes subsidising individual wants (PV system owners) over community interests as a whole.

What is disappointing is the ABC continues to frame residential PV solar systems as an investment where there is an expectation to generate a financial return (through FITs). PV systems purpose isn’t for a financial return through FITs, but to minimise the amount of imported electricity thus reducing bill costs. If one has installed a PV system to achieve a financial return through FITs, I question their motives and they need to accept the risks they have taken. The community (grid connected electricity users) as a whole shouldn’t be subsidising these PV owners and the financial risk they took.