No targeted tariff increase here for solar power users

Eastland Network won't follow Unison's suit

Eastland Network won't follow Unison's suit

Solar power users in Gisborne and Wairoa will get a better deal for the time being than their Hawke’s Bay counterparts, who now have to pay “unfair” power tariffs. Plans for Hawke’s Bay lines company Unison to charge solar users extra were yesterday heavily criticised by Napier MP Stuart Nash.

Eastland Network, responsible for distribution and transmission charges in Gisborne and Wairoa, says it will not follow suit.

“At this stage Eastland Network doesn’t have tariffs that impose additional charges on properties with solar PV”, said Eastland Group chief executive Matt Todd.

“It is something that numerous stakeholders within the industry are considering, as solar installations are not necessarily paying lines charges that reflect their capacity requirements. Our view is that solar is currently uneconomic and might not necessarily be the best investment for NZ Inc. moving forward.

Mr Todd, however, pointed out that at present due to existing electricity price regulations, solar PV was effectively receiving a subsidy.

“This may well, over time, drive charges similar to those Unison has applied to solar PV.”

Most residential houses have their peak demand in the middle of winter (normally when it is cold, wet and cloudy) but people with solar PV were unlikely to have a reduced peak demand at this time so the contribution made by solar PV will be negligible.

Under the current lower-use fixed-charge regime, the network could only recover 15 cents per day (plus GST) as a fixed charge. That was about $55 per annum, while the revenue required to pay for distribution and transmission costs for a typical house Gisborne was about $2.70 per day, or $1000 per annum.

An average house uses approximately 8000kWh per annum and pays about 12.3 cents/kWh for transmission and distribution. Houses with solar PV used significantly less than 8000kWh per annum and, as a result, the transmission and distribution costs were under-recovered for these installations.

“If people with solar PV are not paying their share of network revenue then this is being recovered from other consumers. This means that the wealthy people that can afford solar PV are being subsidised by the poorer people who can’t afford to install it.”

There are about 45 known solar PV installations contacted to the network.

Labour Party energy spokesman Stuart Nash said Unison’s “ridiculous” announcement that it would start charging a higher tariff for solar users, set a “bad precedent” for the future.

“They argue this is necessary because solar users consume less power. That’s a backwards approach that sets a really bad precedent for the future. If consumers move their appliances from electricity to gas, there is the same effect of falling electricity usage, but power companies don’t charge them more for their electricity.

“In fact, The Auckland-based lines company Vector has undertaken research that shows around 75 percent of those who have solar panels installed are still in the upper half of electricity users. It’s a myth to state that solar users use significantly less power than other users.

“Unison should be working with customers who go solar, rather than against them. The risk is that treating customers like this will only encourage them to move onto emerging technologies like batteries that will move them off-grid. That would increase lines charges for everyone else.

“This move by Unison is unfair and could have some worrying long-term consequences.”

Solar power users in Gisborne and Wairoa will get a better deal for the time being than their Hawke’s Bay counterparts, who now have to pay “unfair” power tariffs. Plans for Hawke’s Bay lines company Unison to charge solar users extra were yesterday heavily criticised by Napier MP Stuart Nash.

Eastland Network, responsible for distribution and transmission charges in Gisborne and Wairoa, says it will not follow suit.

“At this stage Eastland Network doesn’t have tariffs that impose additional charges on properties with solar PV”, said Eastland Group chief executive Matt Todd.

“It is something that numerous stakeholders within the industry are considering, as solar installations are not necessarily paying lines charges that reflect their capacity requirements. Our view is that solar is currently uneconomic and might not necessarily be the best investment for NZ Inc. moving forward.

Mr Todd, however, pointed out that at present due to existing electricity price regulations, solar PV was effectively receiving a subsidy.

“This may well, over time, drive charges similar to those Unison has applied to solar PV.”

Most residential houses have their peak demand in the middle of winter (normally when it is cold, wet and cloudy) but people with solar PV were unlikely to have a reduced peak demand at this time so the contribution made by solar PV will be negligible.

Under the current lower-use fixed-charge regime, the network could only recover 15 cents per day (plus GST) as a fixed charge. That was about $55 per annum, while the revenue required to pay for distribution and transmission costs for a typical house Gisborne was about $2.70 per day, or $1000 per annum.

An average house uses approximately 8000kWh per annum and pays about 12.3 cents/kWh for transmission and distribution. Houses with solar PV used significantly less than 8000kWh per annum and, as a result, the transmission and distribution costs were under-recovered for these installations.

“If people with solar PV are not paying their share of network revenue then this is being recovered from other consumers. This means that the wealthy people that can afford solar PV are being subsidised by the poorer people who can’t afford to install it.”

There are about 45 known solar PV installations contacted to the network.

Labour Party energy spokesman Stuart Nash said Unison’s “ridiculous” announcement that it would start charging a higher tariff for solar users, set a “bad precedent” for the future.

“They argue this is necessary because solar users consume less power. That’s a backwards approach that sets a really bad precedent for the future. If consumers move their appliances from electricity to gas, there is the same effect of falling electricity usage, but power companies don’t charge them more for their electricity.

“In fact, The Auckland-based lines company Vector has undertaken research that shows around 75 percent of those who have solar panels installed are still in the upper half of electricity users. It’s a myth to state that solar users use significantly less power than other users.

“Unison should be working with customers who go solar, rather than against them. The risk is that treating customers like this will only encourage them to move onto emerging technologies like batteries that will move them off-grid. That would increase lines charges for everyone else.

“This move by Unison is unfair and could have some worrying long-term consequences.”

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