Sun Tax

The Hon. G.G. BROCK (Stuart) (14:58): My question is to the Minister for Energy. Can the minister update my communities regarding the suggested sun tax that has been discussed by the federal government, with each state having to implement this tax from 1 July this year? With your leave, sir, and that of the house, I will explain further.

Leave granted.

The Hon. G.G. BROCK: I am led to understand that this new tax is proposed to be implemented on 1 July this year, and will mean that people with solar panels currently feeding into the electricity grid will be charged a fee of approximately 1.2¢ per kilowatt exported back into the grid during peak solar hours.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (14:59): I would like to thank the member for his question and his deep commitment to his local community, and indeed to making sure the country is on a decarbonisation path. Retailers have been reducing their feed-in tariffs in response to the lower value of electricity in the middle of the day when solar generation is at its peak supply and outstrips demand. So we are producing more than we need, which is seeing prices in the middle of the day drop dramatically and of course this is causing some physical damage, potentially, to the grid.

Under new rules for distributed energy exports, exports charging could only apply from the start of SA Power Networks' next regulatory period on 1 July 2025, which has now been approved by the independent Australian Energy Regulator. For the upcoming 2025-30 regulatory period, an export tariff has been approved by the regulator as part of SA Power Networks' Tariff Structure Statement. It provides a daily tariff-free threshold of nine kilowatt hours for export from households with an interval meter and an 11 kilowatt-hour threshold for those on the accumulation meter. Unused allowances would carry over within a billing period.

Above that threshold, a 1¢ per kilowatt export tariff would apply between 10am and 4pm for households with interval meters and a 0.75¢ per kilowatt-hour export tariff would apply to accumulation meter households. An export credit would be available for residential and small business customers exporting between 5pm and 9pm from November to March.

The AER considered SA Power Networks justified its need for this pricing, and its proposed tariffs were consistent with the various guidelines pricing principles of the NER, which is the National Electricity Rules. The best way for consumers to take advantage of their solar system is to use their solar energy generation in their home, replacing energy that might otherwise be bought from the grid. So the whole idea is to try and change people's behaviour.

It is important to note that this structure is not unique to South Australia. It has been rolled out in New South Wales for the same period and it has been proposed for Victoria for the 2026-31 regulatory period. There has been significant increase in the volume of solar exports to the grid as households continue to invest in solar systems and the size of solar systems continues to increase. It's producing generally lower and even negative wholesale prices in the NEM during the middle of the day.

Retailers' feed-in tariffs reflect the amount a retailer saves by purchasing customers' solar exports instead of purchasing the electricity from the wholesale market. While retailers have been reducing their feed-in tariffs, what it's simply reflecting is the lower value in the middle of the day. This is not a government decision. This is not something we have imposed on South Australians. The import and export tariffs are set by retailers in response to market conditions and there is no obligation to offer a retail feed-in tariff, nor is there a minimum tariff.

Many customers feel it's unfair that the feed-in tariff is considerably lower than the retail tariff charged for the energy drawn from the grid; however, that comparison is not like for like. The retail tariffs recover a range of costs that retailers incur to supply electricity to customers that is not reflected in the feed-in tariff costs.

The SPEAKER: Before I call the member for Adelaide, the Minister for Child Protection and the Minister for Human Services, I was trying to listen to the minister give his answer and I could hear you both having a debate across the chamber with the member for Flinders, who's been doing it all day.