“I’ve heard that we’re in for some changes.”

You’ve heard correctly, unfortunately. Two-way pricing is on the horizon, and it will affect both residential and commercial properties with solar. However, while this may sound concerning, the reality is not as significant as some media reports are suggesting.

Let’s break down what it means and how it can impact you:

Understanding Two-Way Pricing

Traditionally, solar users have benefited from net metering policies. These policies, delivered through what is known as a feed-in-tariff, have allowed homes and businesses to receive credits for the excess electricity they generate, but don’t consume – and therefore, export back to the grid.

In the early days of solar, the financial value of these feed-in-tariffs served as a powerful incentive for investing in solar systems, as they substantially helped reduce the cost of electricity bills. However, over the years, as you likely already know, the value of these tariffs per kilowatt hour has dropped significantly.

What is the Change and Why is it Happening?

Under two-way pricing, the feed-in-tariff will remain, but alongside this, solar users will incur charges for using the grid to export the electricity they don’t use.

This system is designed to encourage solar users to consume the power they generate themselves, especially during peak periods, or to export it at a time when the grid is under less stress. With the volume of solar forecast to double over the next decade, the change aims to alleviate the pressure on the grid, allowing energy distributors to power their catchment areas more safely and efficiently, by better balancing supply and demand.


Distributor Updates

The three distributors here in NSW have announced a free threshold for daytime solar exports and a network fee charge when solar owners exceed that. They have also shared that they will pay rewards for customers who shift their exports to times of peak demand.

In terms of when these changes will be imposed, Ausgrid and Endeavour Energy have so far announced that they will allow retailers to opt-in to two-way pricing from July 2024.

Neither distributors will enforce the penalties as mandatory until July next year, but even then, they will only at first be applied during certain hours of the day, and it will vary at different times of the year.

Impact on Solar Users

Financially, considering solar users will continue to earn their typical feed-in-tariff, the change is not all that noteworthy. It just means that the value of this will be reduced at particular periods.

In Ausgrid areas, for example, the electricity you export to the grid during 10am and 3pm (above the free threshold) will be paid 1.2c/kWh less than what you usually receive from your retailer. Conversely, between 4pm and 9pm, Ausgrid will pay 2.3c/kWh more.

What these rates will look like in the future, we don’t know, so it’s worth exploring what you can do to continue reaping the benefits of your system.


Maximising Your Solar Investment for Years to Come

Here are some actions you can take to help ensure your savings:

  1. Use more of what your solar generates during peak production times. This might involve running appliances, charging vehicles, or heating water during daylight hours to minimise excess energy being exported to the grid.
  2. Invest in a battery to store excess solar energy for use during times when your panels aren’t producing electricity. This can help reduce your reliance on the grid and maximise your self-consumption, during peak periods especially.
  3. Monitor your energy production and consumption to help you better manage your power and avoid exporting excess solar energy during peak pricing periods.

The introduction of two-way pricing is bringing in some changes, but literally and figuratively, with solar, the power remains in your hands. You just need to decide what to do with it!

If you have any further questions, please feel free to reach out to our team.

We’re here and happy to help!


Jim Hill, Founder and CEO Nepean Solar Solutions Jim Hill

Founder & CEO Nepean Solar Solutions