Final report. Solar feed-in tariff report

Transcription

1 Final report Solar feed-in tariff report October 2017

2 We wish to acknowledge the contribution of the following staff to this report: Thomas Gardiner, Adam Liddy Queensland Competition Authority 2017 The Queensland Competition Authority supports and encourages the dissemination and exchange of information. However, copyright protects this document. The Queensland Competition Authority has no objection to this material being reproduced, made available online or electronically but only if it is recognised as the owner of the copyright 2 and this material remains unaltered.

3 Contents Contents EXECUTIVE SUMMARY THE ROLE OF THE QCA TASK, TIMING AND CONTACTS II III 1 INTRODUCTION Solar feed-in tariffs Ministerial direction Solar Bonus Scheme Data sources Presentation of results 3 2 RETAILER FEED-IN TARIFF OFFERS 4 2.1, highest, and average, FiTs offered to solar customers and FiT trends New and/or innovative FiT structures 6 3 RETAILER MARKET OFFERS Variations to retailers' generally available market offer prices that are offered in conjunction with a FiT Comparison and ranking of the net overall bill position from generally available market offers, considering electricity charges and FiTs 13 GLOSSARY 19 APPENDIX A : MINISTER'S DIRECTION NOTICE 20 APPENDIX B : BILL CALCULATIONS 21 Chapter 2: Retailer feed-in tariff offer calculations 21 Chapter 3: Retailer offer calculations 21 i

4 Executive summary EXECUTIVE SUMMARY This is the first annual report on solar feed-in tariffs (FiT) in south east Queensland (SEQ) 1 by the Queensland Competition Authority (QCA). 2 This report, which focuses on the financial year, provides information on the FiTs offered to residential and small business customers with solar photovoltaic installations (solar customers) in SEQ and the electricity prices offered to solar customers. It also ranks the net overall bill position for a range of solar customers with different levels of consumption and solar exports. Due to the volume of data, we present summary information in the body of the report. Complete results and rankings for all measures, and information on market offers, can be downloaded from our website. 3 Solar feed-in tariffs offered to solar customers in south east Queensland During the reporting period a wide range of offers were available to solar customers. Residential customers could choose from over 100 retailer offers in the market featuring FiT rates of 4 11c/kWh. For small business customers over 70 offers were generally available, with FiT rates of 6 10c/kWh. The average of all FiTs offered in the market varied between 6.5c/kWh and 6.8 c/kwh from 1 July 2015 to June , for both residential and small business customers. Two retailers offered innovative FiTs, with one offer having a variable FiT rate linked to the wholesale energy market spot price, and others offered higher FiT rates for customers installing solar through their retailer or one of their partners. Solar customer bills Our rankings of overall net bill positions reveal that the best offer in the market varied according to consumption and export levels, and that there was no single offer during the reporting period that was best for all solar customers. The analysis also reveals that the offer with the highest FiT rate did not produce the lowest overall bill in the consumption and export scenarios modelled. Overall our analysis highlights that it is important for solar customers to consider the cost of purchasing electricity as well as the FiT offered when choosing from the variety of offers in the market. For this reason, we consider that solar customers would benefit if the Made Easy website was updated to include revenue received from solar exports, and any additional fees specific to solar customers, when calculating annual bill figures for comparison. 1 The Energex distribution area. 2 This report is produced under Direction from the Minister for, Biofuels and Water Supply (see Chapter 1). Appendix A contains a copy of the Minister's direction. 3 ii

5 The role of the QCA task, timing and contacts THE ROLE OF THE QCA TASK, TIMING AND CONTACTS The Queensland Competition Authority (QCA) is an independent statutory body which promotes competition as the basis for enhancing efficiency and growth in the Queensland economy. In accordance with section 253AA of the Electricity Act 1994, the QCA has been directed by the Minister for, Biofuels and Water Supply to monitor, and provide a written report on, solar feed-in tariffs in the Energex distribution area (see Appendix A of this paper). Key dates The QCA's timetable solar feed-in tariff report for Scoping paper released 17 July 2017 Submissions on the scoping paper due 7 August 2017 Report provided to the Minister for, Biofuels and Water Supply and published on the QCA website 20 October 2017 Contacts Enquiries regarding this project should be directed to: ATTN: Adam Liddy Tel (07) iii

6 Introduction 1 INTRODUCTION This is the first annual report on solar feed-in tariffs (FiT) in south east Queensland (SEQ) by the Queensland Competition Authority (QCA). 4 This report, which fulfils the requirements of the Direction from the Minister for, Biofuels and Water Supply (the Minister) issued on 17 February 2017, 5 is divided into three sections: This chapter provides background information about this report, including the Direction from the Minister for, Biofuels and Water Supply. Chapter 2 reports on retailer FiT offers made to small customers 6 with solar systems (solar customers). Chapter 3 reports on retailer market offers made to solar customers, including a comparison of the net bill position for a range of solar customers with differing levels of consumption and solar export ratios. 1.1 Solar feed-in tariffs Solar photovoltaic systems generate electricity for the owner's home or business. If solar panels produce more electricity than the premises is using, the surplus electricity is exported (or 'fed in') to the electricity network. FiTs are the prices that the retailers pay to solar customers for these exports. Figure 1 illustrates how a simple solar installation works. Figure 1 Solar PV system Source: Guide to installing solar for households, Clean Council. 4 The Energex distribution area. 5 See Appendix A. 6 Section 5 of the National Retail Law and section 7 of the National Retail Regulations define a small customer as a residential customer or a business customer that consumes less than 100 MWh per annum. 1

7 Introduction Most retailers in SEQ pay solar customers a set amount in cents for every kilowatt hour (c/kwh) that solar customers export into the network. 7 Retailers make these payments because the electricity exported by solar customers is consumed by other electricity customers, which reduces the amount of electricity retailers must buy on the wholesale market. SEQ retailers set the amount they are willing to pay solar customers for their exports when competing for these customers. 8 When the premises is consuming more electricity than the solar system is generating, such as at night, the solar customer imports electricity from the grid. The FiT amounts solar customers receive offset the cost of these imports. 1.2 Ministerial direction The Direction, from the Minister for, Biofuels and Water Supply, requires the QCA to monitor retailer FiT offers, as published on the n Regulator's (AER) Made Easy website. 9 The QCA must provide written annual reports on retailer solar FiT offers in the Energex distribution area, the first of which must be published by 31 October The terms of reference (TOR) of the Minister's Direction requires the QCA to report on five matters: 1. A comparison of the lowest, highest and average FiTs between retailers. 2. Variations to retailers' generally available market offer prices that are offered in conjunction with a FiT, including variations to fixed and variable electricity charges. 3. A comparison and ranking of the net overall bill position from generally available market offers, considering electricity charges and FiTs. This analysis is to compare net bill outcomes for a range of different residential and small business electricity customers with solar PV systems, varying by total electricity consumption (eg a small, typical and large residential customer) and high medium and low solar export/use ratio. The analysis should include retail market offers with and without FiTs and specify the retailer for each offer. 4. Any trends in relation to retailers' FiTs in and between the reporting period and previous tariff years. 5. Any comment on the emergence of new and/or innovative FiT structures. 10 In simple terms, we must report on the FiTs retailers have offered solar customers for their exported electricity 11 and the associated prices retailers charged solar customers for imports Solar Bonus Scheme Solar customers who applied for the Queensland Solar Bonus Scheme (SBS) before 10 July 2012 may also receive a subsidy paid through distributors in addition to a retailer FiT. 13 As the SBS is a 7 During the reporting period one retailer offered variable FiT rates to residential and small business solar customers in SEQ. See section 2.2 for more information on these FiT structures. 8 In regional Queensland, where there is limited competition, the QCA sets the FiT rate. Find out more information on our website 9 The Minister made the Direction under section 253AA of the Electricity Act Appendix A contains a copy of the Minister's Direction. 10 Minister's Direction. 11 Items 1, 4 and 5 of the TOR. 12 Items 2 and 3 of the TOR. 13 For more information on the SBS and eligibility see 2

8 Introduction government-funded FiT paid through distributors, all eligible customers receive 44 c/kwh regardless of their chosen retailer. While the Direction requires the QCA to report on retailers' FiT offers, analysis of these offers will still be of interest to solar customers receiving additional payments under the SBS. 1.4 Data sources Retailer FiT and market offer data The Direction requires the QCA to report generally available retailer FiT offers as published on the n Regulator's (AER) Made Easy website. 14 Made Easy is an energy price comparison website developed by the AER to assist small customers to compare available standing and market offers. 15 retailers are required to provide retail offer information in accordance with the AER's Retail Pricing Information Guidelines. 16 In accordance with the Direction, our analysis uses quarterly data 17 on retailer offers generally available to all SEQ solar customers as presented on the Made Easy website. It is the same base dataset used for the market monitoring report due in November Consumption and solar export data Item 3 of the TOR requires the QCA to calculate net bill positions for solar customers with a range of export and consumption levels. These export and consumption levels 19 are based on metering information collected by Energex. We consider this the most appropriate data to use, as it is derived from the same data used to generate solar customer bills in SEQ. Appendix B provides information on the consumption levels and export ratios used in this report. 1.5 Presentation of results This report provides summary information, as the total amount of data reported under the Direction is more than could feasibly be presented in a report. A spreadsheet containing the full results underpinning this report is available for download on our website. 20 It is important to note that the offer data in this report is current as at 30 June Current offers available to solar customers are likely to differ from those presented in this report. Annual bill figures in this report include GST, all conditional and non-conditional discounts, as well as metering and membership fees where applicable. However, additional fees may apply depending on the payment method customers use, billing arrangements, or other factors. 21 To choose the most appropriate electricity offer, customers should consider the latest offers available in the market, and consider any additional fees that may apply to these offers National Retail Law, section National Retail Law, section Data has been obtained at the end of each quarter, that is, 31 March (March quarter), 30 June (June quarter), 30 September (September quarter), and 31 December (December quarter). 18 You can find out more information on the market monitoring report on our website, 19 Stakeholders should note that the typical consumption figures in this report are different to those in the market monitoring report, as they are based on the whole SEQ population Appendix B contains more information on how we calculated the figures in this report. 3

9 Retailer feed-in tariff offers 2 RETAILER FEED-IN TARIFF OFFERS This chapter reports on solar FiTs offered by retailers to solar customers in SEQ as required by items 1, 4 and 5 of the TOR: 1 A comparison of the lowest, highest and average feed-in tariffs between retailers, 4 Any trends in relation to retailers' feed in tariffs in and between the reporting period and previous tariff years, and 5 Any comment on the emergence of new and/or innovative FiT structures , highest, and average, FiTs offered to solar customers and FiT trends Residential solar customers Table 1 shows the FiTs, or range of FiTs, each retailer offered residential solar customers in SEQ, as well as the lowest, average, 23 and highest, FiTs offered, during each quarter of the reporting year 24 and the previous year. Table 1 Range of FiTs offered to residential solar customers in SEQ Retailer Residential FiT a by quarter (c/kwh) Sep Dec Mar Jun Sep Dec Mar Jun AGL Click Diamond Dodo Power & Gas Locals Lumo Mojo Power Origin Powerdirect Powershop Red Urth b Average c A dash ( ) indicates that the retailer either did not make an offer in the SEQ market or did not offer a FiT. a Solar customers eligible for payments under the SBS will receive their SBS payment in addition to the FiTs listed above. b Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. c Appendix B provides information on how we calculated average FiTs. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. 22 Minister's Direction TOR, p. 1 (see Appendix A). 23 Appendix B provides information on how the QCA calculated average FiTs July 2016 to 30 June

10 Retailer feed-in tariff offers Small business solar customers Table 2 shows the FiTs, or range of FiTs, each retailer offered small business solar customers in SEQ, as well as the lowest, average, 25 and highest, FiTs offered, during each quarter of the reporting period 26 and the previous year. Table 2 Range of FiTs offered to small business solar customers in SEQ Retailer Small business FiT a by quarter (c/kwh) Sep Dec Mar Jun Sep Dec Mar Jun AGL Diamond Locals ERM Power Lumo Origin Powerdirect Powershop Red Urth b Average c A dash ( ) indicates that the retailer either did not make an offer in the SEQ market or did not offer a FiT. a Solar customers eligible for payments under the SBS will receive their SBS payment in addition to the FiTs listed above. b c Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. Appendix B provides information on how we calculate average FiTs. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. QCA comment The range, and average, of FiTs offered to solar customers remained relatively stable during the reporting period and the previous year, with most retailers offering the same level of FiT during the entire period. 27 Residential solar customers were offered FiTs between 4c/kWh and 11c/kWh for the entire reporting period, and small business solar customers were offered between 6c/kWh and 10c/kWh for most of the reporting period. While the range of FiTs offered to small business customers was narrower than for residential customers, over the two-year period the range of average FiTs for both were the same ( c/kWh). The data shows that new retailers entered the market in , and solar customers had a variety of offers to choose from. Residential solar customers were able to choose from over Appendix B provides information on how the QCA calculated average FiTs July 2016 to 30 June We note that since 30 June 2017 some retailers have significantly increased their FiT offers. 5

11 Retailer feed-in tariff offers offers from as many 14 different retailers and small business solar customers were generally able to choose from over 70 offers from as many 12 different retailers. 28 Solar customers should note that while the level of FiT is important, the cost of importing electricity is also an important factor to consider when choosing between offers. The electricity prices associated with solar offers, and the overall ranking of net bill positions for solar customers, are discussed in Chapter New and/or innovative FiT structures There were two types of innovative FiT offers during the reporting period. The first type offered a variable FiT which was linked to wholesale energy market prices. The second type offered higher FiT rates to new solar customers who installed their systems through a particular retailer or their partners. Urth Trader Urth 29 offered 'Urth Trader' to residential and small business solar customers. This plan offered the same rate for FiT as any other generator in the market, less a 15 per cent administration fee. When wholesale prices were low solar customers would receive less than they would under fixed FiT rates. When wholesale prices were high solar customers would receive more than general fixed FiT rates. Urth FIT20 Urth 30 offered 'Urth FIT20' to residential and small business solar customers who installed a solar system through an approved Urth partner. Under this offer solar customers were paid 20c/kWh for up to 25 per cent of their solar system's potential energy generation. If solar customers exported more than 25 per cent of the solar generation potential of the system, they received 6.5c/kWh for the remainder of their exports. Solar boost plus Origin offered 'Solar boost plus' to residential solar customers who installed a solar system through Origin. These customers received a 12c/kWh FiT rate, 2c/kWh higher than Origin's generally available 'Solar boost' offer for a 24-month benefit period. 28 A spreadsheet containing information on all offers during the reporting period is available on our website ( 29 Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. 30 Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. 6

12 Retailer market offers 3 RETAILER MARKET OFFERS Chapter 2 shows that a range of FiTs, from a range of retailers, were available to solar customers. While the level of FiT offered is obviously important to solar customers, the cost of importing electricity is also an important factor to consider when determining the best market offer for solar customers. This chapter considers items 2 and 3 of the TOR which relate to the market offer prices retailers offered solar customers during the reporting period. These items are: 2 Variations to retailers' generally available market offer prices that are offered in conjunction with a FiT, including variations to fixed and variable electricity charges. 3 A comparison and ranking of the net overall bill position from generally available market offers, considering electricity charges and FiTs. This analysis is to compare net bill outcomes for a range of different residential and small business electricity customers with solar PV systems, varying by total electricity consumption (e.g. a small, typical and large residential customer) and high medium and low solar export/use ratio. The analysis should include retail market offers with and without FiTs and specify the retailer for each offer. 31 TOR 2 and 3 are addressed in sections 3.1 and 3.2 respectively. 3.1 Variations to retailers' generally available market offer prices that are offered in conjunction with a FiT Item 2 of the TOR requires the QCA to report on 'retailers' generally available market offer prices' 32 for residential or small business solar customers for their imports of electricity, and any variations to these prices, including variations to fixed and variable electricity charges. What are market offer prices? Market offer prices are prices charged to customers on market offers for connecting to the network and importing electricity to their premises. Electricity retailers operating in SEQ offer customer retail services to residential and small business customers under either a standing offer, or a market offer. A standing offer consists of standing offer prices, set by the retailer, and a standard contract with terms and conditions that are specified in the National Retail Rules (NERR). 33 Market offers differ from standing offers in that while market offers contain a minimum set of terms and conditions that are specified in the NERR, 34 they may also contain terms that are agreed between the retailer and the customer. 35 Common examples of these additional terms are: cash rebates or discounts which are either guaranteed, or are conditional on customers meeting certain requirements (e.g. paying their bill by the due date) other non-monetary benefits such as frequent flyer points and gift cards 31 Minister's Direction TOR, p. 1 (see Appendix A). 32 Minister's Direction TOR, item 2, p. 1 (see Appendix A). 33 National Retail Rules, rule 12 and schedule National Retail Rules, rule 12 and schedule National Retail Rules, rule 14. 7

13 Retailer market offers fees, such as payment processing 36, late payment, or early termination 37 fees. While the Direction requires us to report on generally available market offer prices, in this section we report on all offers in the market which offer solar customers a FiT, even where the offer is a standing offer. We consider this will provide a more complete report on the options available to solar customers. Offer prices for the most common tariffs are presented as an annual bill for a solar customer with typical consumption. 38 For residential solar customers the most common tariffs include flat rate tariffs used in combination with economy, and super economy, controlled load tariffs which are only available for limited time periods each day. 39 We consider annual bills provide the most meaningful comparison between the prices under different offers, as offer prices offered in conjunction with a FiT may have four elements, each of which may impact different customers in different ways: (1) Fixed amount(s), generally charged per day the fixed charge varies from retailer to retailer and frequently covers infrastructure and metering costs associated with the electricity network and retail costs. (2) Variable amount(s) for imported electricity, generally charged on a c/kwh basis the type of charges solar customers will pay on a variable basis will depend on the type of retail tariff. Often solar customers pay a flat rate per kwh imported to the premises, but for some tariffs the rate per kwh may vary depending on when electricity is imported. 40 (3) Discounts, fees and charges. (4) FiT amount(s), paid to solar owners for electricity exported to the network these are the amounts discussed in Chapter 2. The impact of each element will vary according to each solar customer's level, and in some cases their pattern, of electricity exports and imports, as well as other factors such as payment methods and whether the customer pays their electricity bills on time The Competition and Consumer Act, part IVC, may prevent retailers from levying excessive payment processing fees on customers. 37 An early termination fee must be a reasonable estimate of the retailer's costs resulting from early termination, and the manner of calculating the fee must be detailed in the contract (National Retail Rules, rule 49A). 38 Appendix B outlines how typical consumption levels were established. Stakeholders should note that the typical consumption figures in this report are different to those in the market monitoring report, as they are based on the whole SEQ population. 39 Economy, and super economy controlled load tariffs generally provide power for a minimum of 18 and 8 hours per day respectively. They are used for appliances such as hot water systems, pool pumps and electric vehicle charging. See Appendix 3 of the Energex Annual Pricing Proposal ( for more information. 40 Some customers may also pay charges determined on their level of demand. However, as these offers are not present on Made Easy they are outside the scope of the Direction. 41 See Appendix B for more information on how fees and charges were treated in calculating annual bills. 8

14 Retailer market offers Tables 3 6 show each retailer's highest and lowest offers for each quarter for residential and small business solar customers. 42 In addition to these summary tables, a spreadsheet containing all offers, including all fixed and variable charges, is available for download from our website. 43 Appendix B provides more information on how we calculate annual bills. Residential solar customers Table 3 Annual bills for typical SEQ solar customer, excluding solar FiT payments (flat rate residential tariff) Retailer September December March June AGL 1500 a a a a 1633 Click 1551 a a a a 1734 Diamond Dodo Power & Gas Locals Lumo Mojo Power 1540 a a a a 2061 Origin Powerdirect Powershop 1486 a a a 1486 Red Urth b A dash ( ) indicates that the retailer either did not make an offer in the Queensland market or did not offer a FiT. a b Retailer had a lower market offer for non-solar customers. Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. See Appendix B for more information on how we calculate annual bill figures. 42 All offers are presented as published on the Made Easy website. Origin 's offers include the solar metering fee, which it charges solar customers separately

15 Retailer market offers Table 4 Annual bills for typical SEQ solar customer, excluding solar FiT payments (flat rate residential tariff combined with controlled load economy) 44 Retailer September December March June AGL 1707 a a a a 1864 Click 1807 a a a 2020 Diamond Dodo Power & Gas Locals Lumo Mojo Power 1724 a a a a 2314 Origin Powerdirect Powershop 1742 a a a 1742 Red Urth b A dash ( ) indicates that the retailer either did not make an offer in the Queensland market or did not offer a FiT. a b Retailer had a lower market offer for non-solar customers. Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. See Appendix B for more information on how we calculate annual bill figures. 44 Economy controlled load tariffs generally provide power for a minimum of 18 hours per day. They are used for appliances such as hot water systems, pool pumps and electric vehicle charging. See Appendix 3 of the Energex Annual Pricing Proposal ( for more information. 10

16 Retailer market offers Table 5 Annual bills for typical SEQ solar customer, excluding solar FiT payments (flat rate residential tariff combined with controlled load super economy) 45 Retailer September December March June AGL 1625 a a a a 1773 Click 1755 a a a 1961 Diamond Dodo Power & Gas Locals Lumo (QLD) Mojo Power Pty Ltd 1663 a a a a 2229 Origin Powerdirect Powershop 1698 a a a 1698 Red Urth b A dash ( ) indicates that the retailer either did not make an offer in the Queensland market or did not offer a FiT. a b Retailer had a lower market offer for non-solar customers. Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. See Appendix B for more information on how we calculate annual bill figures. 45 Super economy controlled load tariffs generally provide power for a minimum of 8 hours per day. They are used for appliances such as hot water systems, pool pumps and electric vehicle charging. See Appendix 3 of the Energex Annual Pricing Proposal ( for more information. 11

17 Retailer market offers Small business solar customers Table 6 Annual bills for typical SEQ solar customer, excluding solar FiT payments (flat rate small business tariff) Retailer September December March June AGL 2470 a a a a 2753 Diamond Locals ERM Power Lumo Origin Powerdirect Powershop 2592 a a a 2592 Red a a Urth b A dash ( ) indicates that the retailer either did not make an offer in the Queensland market or did not offer a FiT. a b Retailer had a lower market offer for non-solar customers. Urth went into administration on 1 February 2017 and is no longer an authorised electricity retailer. Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. See Appendix B for more information on how we calculate annual bill figures. QCA comment The tables above show that electricity prices that retailers offered solar customers remained largely stable across the reporting period. Of the changes retailers made to their offers, most were in the second half of the reporting period. The lowest import prices offered by each retailer to residential customers on a flat rate tariff resulted in typical customer bills of between $1279 and $1518 depending on the retailer. For small business customers, their typical customer bills varied between $2055 and $2586, depending on the retailer. Analysis of the underlying data shows only a small number of retailers consistently offered lower electricity prices to non-solar customers than they offered to solar customers. In some cases, retailers advised this was due to the solar metering charge, which does not apply to non-solar customers, being incorporated into the fixed charge. 12

18 Retailer market offers 3.2 Comparison and ranking of the net overall bill position from generally available market offers, considering electricity charges and FiTs The best offer for a particular solar customer may not necessarily be the one offering the highest retailer FiT rate. This is because a solar customer's net overall electricity bill will be the total of fixed, variable, and other, charges less the amount they receive in FiT payments. For example, solar customers who import a large amount of electricity, and export a relatively small amount of electricity may find that a market offer with cheaper prices for electricity imports would be best for them, even if it did not offer the highest FiT rate. Conversely, solar customers who export a large amount of electricity and import relatively less would receive greater benefit from a higher FiT rate. The Direction requires the QCA to rank solar customer's net overall bill position for generally available market offers by two factors: total electricity consumption (e.g. a small, typical and large residential customer), and high medium and low solar export/use ratios. Electricity consumption, and solar export ratios are based on Energex metering data, which is the actual data used by retailers to generate electricity bills for customers. We use the 75th 46, median 47, and 25th 48 percentile levels for electricity imports and export ratios to develop the nine scenarios. Appendix B has more information on these figures. While the Direction requires us to report on generally available market offer prices, in this section we report on all offers in the market, even where the offer is a standing offer. We consider this will provide a more complete report on the options available to solar customers. All offers are presented as published on the Made Easy website. Origin charges the solar metering fee separately so this charge has been included in the bill to ensure a fair comparison. See Appendix B for more information on how we calculate annual bills. 46 Three-quarters of solar customers will import less electricity than the 75th percentile customer. 47 Half of solar customers will import less electricity than the median, or 50th percentile, customer. 48 One-quarter of solar customers will import less electricity than the 25th percentile customer. 13

19 Retailer market offers Residential solar customers Table 7 Net annual bill ranking for SEQ solar customers 30 June 2017 (flat rate residential tariff) Import level Low export ratio Medium export ratio High export ratio Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Annual bill ($) Small Import 2903 kwh, Export 701 kwh Import 2903 kwh, Export 1495 kwh Import 2903 kwh/pa, Export 2804 kwh QLD Plus Powershop Standard Saver QLD Save Powershop Standard Saver QLD Plus Typical Import 4479 kwh, Export 1082 kwh Import 4479 kwh, Export 2306 kwh Import 4479 kwh, Export 4326 kwh Powershop Standard Saver QLD Plus Flexi Saver - Home (No Exit Fees) Powershop Standard Saver Origin Solar Boost Large Import 6715 kwh, Export 1622 kwh Import 6715 kwh, Export 3458 kwh Import 6715 kwh, Export 6486 kwh Flexi Saver - Home (No Exit Fees) Dodo Power & Gas Energex Res No Term Market Offer Origin Solar Boost Dodo Power & Gas Energex Res No Term Market Offer Flexi Saver - Home (No Exit Fees) Powershop Standard Saver Dodo Power & Gas Energex Res No Term Market Offer Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. A spreadsheet containing the full ranking of all offers for all quarters, can be downloaded from 14

20 Retailer market offers Table 8 Import level Net annual bill ranking for SEQ solar customers 30 June 2017 (flat rate residential tariff combined with economy controlled load) Low export ratio Medium export ratio High export ratio Retailer Offer title FiT c/kwh Annual bill $ Retailer Offer title FiT c/kwh Annual bill $ Retailer Offer title FiT c/kwh Annual bill $ Small Flat 2573 kwh, Cont. 934 kwh, Export 692 kwh Flat 2573 kwh, Cont. 934 kwh, Export 1385 kwh Flat 2573 kwh, Cont. 934 kwh, Export 2406 kwh Red Easy Saver 10% - Residential Red Easy Saver 10% - Residential Powershop Standard Saver Typical Flat 3897 kwh, Cont kwh, Export 1108 kwh Flat 3897 kwh, Cont kwh, Export 2218 kwh Flat 3897 kwh, Cont kwh, Export 3853 kwh Flexi Saver - Home (No Exit Fees) Flexi Saver - Home (No Exit Fees) Flexi Saver - Home (No Exit Fees) Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Large Flat 5742 kwh, Cont kwh, Export 1644 kwh Flat 5742 kwh, Cont kwh, Export 3291 kwh Flat 5742 kwh, Cont kwh, Export 5717 kwh Flexi Saver - Home (No Exit Fees) Flexi Saver - Home Load 2 (No Exit Fees) Flexi Saver - Home (No Exit Fees) Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Origin Solar Boost Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. A spreadsheet containing the full ranking of all offers for all quarters, can be downloaded from 15

21 Retailer market offers Table 9 Net annual bill ranking for SEQ solar customers 30 June 2017 (flat rate residential tariff combined with super economy controlled load) Import level Low export ratio Medium export ratio High export ratio Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Small Flat 2605 kwh, Cont kwh, Export 775 kwh Flat 2605 kwh, Cont kwh, Export 1512 kwh Flat 2605 kwh, Cont kwh, Export 2596 kwh Annual bill ($) Red Easy Saver 10% - Residential Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Typical Flat 3913 kwh, Cont kwh, Export 1157 kwh Flat 3913 kwh, Cont kwh, Export 2258 kwh Flat 3913 kwh, Cont kwh, Export 3878 kwh Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Flexi Saver - Home (No Exit Fees) Flexi Saver - Home (No Exit Fees) Flexi Saver - Home (No Exit Fees) Origin Solar Boost Large Flat 5772 kwh, Cont kwh, Export 1666 kwh Flat 5772 kwh, Cont kwh, Export 3251 kwh Flat 5772 kwh, Cont kwh, Export 5584 kwh Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Dodo Power & Gas Energex Res & Controlled Load No Term Market Offer Flexi Saver - Home (No Exit Fees) Flexi Saver - Home (No Exit Fees) Origin Solar Boost Flexi Saver - Home (No Exit Fees) Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. A spreadsheet containing the full ranking of all offers for all quarters, can be downloaded from 16

22 Retailer market offers Small business solar customers Table 10 Net annual bill ranking for SEQ solar customers 30 June 2017 (flat rate small business tariff) Import level Low export ratio Medium export ratio High export ratio Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Annual bill ($) Retailer Offer title FiT c/kwh Small Import 2904 kwh, Export 283 kwh Import 2904 kwh, Export 1198 kwh Import 2904 kwh/pa, Export 4098 kwh Basic Saver - Business Basic Saver - Business Annual bill ($) Basic Saver - Business QLD Business Save QLD Business Save QLD Business Save Red Easy Saver 10% - Business Red Easy Saver 10% - Business ERM Power ERM Business Adjustable Typical Import 7628 kwh, Export 744 kwh Import 7628 kwh, Export 3146 kwh Import 7628 kwh, Export kwh Basic Saver - Business Basic Saver - Business Basic Saver - Business Everyday Saver - Business Everyday Saver - Business Powershop Standard Saver QLD Business Save QLD Business Save Diamond Diamond Solar Large Import kwh, Export 1845 kwh Import kwh, Export 7804 kwh Import kwh, Export kwh Basic Saver - Business Basic Saver - Business Basic Saver - Business Everyday Saver - Business Everyday Saver - Business Diamond Diamond Solar AGL AGL Business Maximiser QLD Business Save Powershop Standard Saver Note: Data presented is current as at 30 June Stakeholders should consult Made Easy (energymadeeasy.gov.au) for the latest offers available in the market. A spreadsheet containing the full ranking of all offers for all quarters, can be downloaded from 17

23 Retailer market offers QCA comment During the reporting period, 49 a wide range of offers, with a range of FiT and import rates, were available to residential and small business customers. The data shows that the best offer for a particular customer type varied according to the assumed levels of electricity imports and exports. While one plan produced the lowest net bill for all small business customers in the June quarter shown in Table 10, this was not the case for the entire reporting period. 50 It is important to note that during the reporting period the offer with the highest FiT rate did not provide the lowest net overall bill in the scenarios we modelled. This highlights the importance of solar customers considering all aspects of an offer, not just the FiT rate, and basing their decision on the most up-to-date retailer offer information available when selecting from the variety of offers available in the market. For this reason, solar customers would benefit from the AER's Made Easy website calculating annual bills for comparison on a net basis, as the Victorian Government's Compare website does. 51 While Made Easy is an invaluable independent source for the latest offer information, it does not take into account revenue received from solar exports, or how discounts are applied for solar customers 52 when calculating annual bill figures for comparison. At present, solar customers must calculate these amounts manually for each offer to see which is likely to provide them with the lowest bill July 2016 to 30 June As discussed in section 1.4, due to the amount of data generated for this report we provide summary information for the June quarter 2017 in the body of this report. Net overall bill rankings for all quarters can be downloaded from our website ( Click applies discounts for solar customers to their net bill amount after solar credits have been subtracted. 18

24 Glossary GLOSSARY AER December quarter n Regulator data obtained on 31 December of the relevant year the Direction the direction made by the Minister on 17 February 2017 (see Appendix A) FiT June quarter kwh March quarter The Minister QCA feed-in tariff data obtained on 30 June of the relevant year kilowatt hour data obtained on 31 March of the relevant year the Minister for, Biofuels and Water Supply Queensland Competition Authority Reporting year 1 July 2016 to 30 June 2017 SBS September quarter SEQ solar customer TOR Solar Bonus Scheme data obtained on 30 September of the relevant year south east Queensland solar photovoltaic system owners terms of reference to the Direction 19

25 Appendix A: Minister's Direction Notice APPENDIX A: MINISTER'S DIRECTION NOTICE 20

26 Appendix B: Bill calculations APPENDIX B: BILL CALCULATIONS This appendix explains how the QCA calculates the figures in each chapter of this report. Chapter 2: Retailer feed-in tariff offer calculations As required by TOR 1, we report on the lowest, highest, and average, FiTs between retailers (see Chapter 2). We calculate average FiTs by dividing the sum of all retailer-offered FiTs listed on Made Easy for each customer type at the end of the relevant quarter by the total number of offers offering a FiT at the end of the relevant quarter. and lowest FiTs were the maximum and minimum FiTs offered to each customer type on the last day of the relevant quarter. Three offers discussed in section 2.3 were excluded from the FiT calculations: Urth FIT20 and Origin 's Solar boost plus were excluded as they were not generally available to all solar customers. Rather these offers were only available to customers installing solar systems either through the retailer, or one of its partners. Urth 's Urth Trader was excluded, as its FiT varied every 30 minutes according to the wholesale market price. Theoretically the FiT under this offer could range between 0 c/kwh and 1190 c/kwh in any given 30-minute period. As Urth went into administration on 1 February 2017 it was not possible to obtain information on the typical FiT customers received under this offer. Chapter 3: Retailer offer calculations In Chapter 3 we report market offer prices (expressed as annual bills) and net overall bill positions for solar customers. Calculating bills requires three sets of information: the most common tariffs, or combinations of tariffs, the representative level(s) of consumption and export to calculate bills, and retailer market offer data. Most common tariffs, and combinations of tariffs The most common tariff combinations are based on Energex metering data. Specifically the number of solar customer NMIs on each Energex network tariff, or combination of tariffs which were connected for the entire financial year. Table 11 lists the most common network tariffs, and combinations of tariffs. Table 11 Most common tariffs, and combinations of tariffs, for solar customers Customer type Network tariff(s) Residential Small business T8400 (Residential flat) T8400 (Residential flat) and T9000 (Super Economy) T8400 (Residential flat) and T9100 (Economy) T8500 (Business flat) 21