Monitoring report. Solar feed-in tariff report

Transcription

1 Monitoring report Solar feed-in tariff report October 2018

2 We wish to acknowledge the contribution of the following staff to this report: Karan Bhogale, Shannon Murphy and Thomas Gardiner Queensland Competition Authority 2018 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 THE ROLE OF THE QCA TASK, TIMING AND CONTACTS II 1 INTRODUCTION Solar feed-in tariff monitoring in south east Queensland This report Solar feed-in tariffs Solar Bonus Scheme Data sources 2 2 RETAILER FEED-IN TARIFFS Terms of reference Lowest, highest and average feed-in tariffs Trends between and New and/or innovative feed-in tariff structures 8 3 RETAILER MARKET OFFERS Terms of reference Variations to prices offered in conjunction with a feed-in tariff Comparison and ranking of the net overall bill position QCA comments 19 GLOSSARY 22 APPENDIX A: DIRECTION NOTICE 23 APPENDIX B: BILL CALCULATIONS 24 Chapter 2: Retailer feed-in tariff offer calculations 24 Chapter 3: Retailer offer calculations 25 i

4 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 (Qld), the QCA has been directed by the Minister responsible for to monitor, and provide a written report on, solar feed-in tariffs in the Energex distribution area. Contacts Enquiries regarding this project should be directed to: ATTN: Mr Shannon Murphy Tel (07) ii

5 Introduction 1 INTRODUCTION 1.1 Solar feed-in tariff monitoring in south east Queensland The Queensland Government has directed the Queensland Competition Authority (QCA) to monitor and report on solar feed-in tariffs in the Energex distribution which covers south east Queensland (SEQ). The Direction requires the QCA to report on solar feed-in tariffs which were available in the preceding tariff year (monitored on a quarterly basis) and to publish the report by 31 October each year. The QCA's first solar feed-in tariff monitoring report was published in October 2017 and is available on the QCA website This report This solar feed-in tariff monitoring report provides information on retailers': feed-in tariff offers to small customers with solar systems (solar customers) 2 (Chapter 2) market offers 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 (Chapter 3) 1.3 Solar feed-in tariffs Solar photovoltaic (PV) 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. Feed-in tariffs are the prices that the retailers pay to solar customers for these exports. The figure below illustrates how a simple solar PV system works. Figure 1 Solar PV system Source: Clean Council 2018, Guide to installing solar for households, April. 1 QCA 2017, Solar feed-in tariff report , final report, October [QCA 2017a], QCA website. 2 The National Retail Law, section 5 and National Retail Regulations, section 7 define a 'small customer' as a residential customer or a business customer that consumes less than 100 megawatt hours per annum. 1

6 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. 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. In regional Queensland, where there is limited competition, the QCA sets the feed-in tariff rate. 3 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 feed-in tariff amounts solar customers receive offset the cost of these imports. 1.4 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 feed-in tariff. 4 As the SBS is a government-funded feed-in tariff paid through distributors, all eligible customers receive 44 cents per kilowatt hour regardless of their chosen retailer. While the Direction requires the QCA to report on retailers' feed-in tariff offers, analysis of these offers will still be of interest to solar customers receiving additional payments under the SBS. 1.5 Data sources Retailer feed-in tariff and market offer data The Direction requires the QCA to report generally available retailer feed-in tariff offers as published on the n Regulator's (AER) Made Easy website. 5 Made Easy is an energy price comparison website developed by the AER to assist small customers to compare available standing and market offers. retailers were required in to provide retail offer information in accordance with the AER's Retail Pricing Information Guidelines. 6 In accordance with the Direction, our analysis uses quarterly data on retailer offers generally available to all SEQ solar customers as presented on the Made Easy website. It is the same dataset used for the market monitoring report due in November Consumption and solar export data Item 3 of the terms of reference included in the Direction requires the QCA to calculate net bill positions for solar customers with a range of export and consumption levels. These export and consumption levels 8 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. 3 More information is available on the regional solar feed-in tariff page of the QCA website. 4 More information is available on the SBS 44c feed-in tariff page of the Queensland Government website AER 2015, AER Retail Pricing Information Guidelines, version 4.0, August. 7 More information is available on the SEQ market monitoring page of the QCA website. 8 This report uses the typical consumption of solar customers only, whereas the market monitoring report uses the typical consumption of all customers. 2

7 Retailer feed-in tariffs 2 RETAILER FEED-IN TARIFFS 2.1 Terms of reference Items 1, 4 and 5 of the terms of reference require the report to include: a comparison of the lowest, highest and average feed-in tariffs between retailers any trends in relation to retailers' feed-in tariffs in and between the reporting period and previous tariff years any comment on the emergence of new and/or innovative feed-in tariff structures. 2.2 Lowest, highest and average feed-in tariffs Residential offers The table below shows the feed-in tariffs, or range of feed-in tariffs, each retailer offered to residential solar customers in SEQ as well as the lowest, average and highest feed-in tariffs during each quarter of Table 1 Feed-in tariffs offered to residential solar customers, quarters Retailer Residential feed-in tariff by quarter (c/kwh) September December March June 1st AGL Alinta Amaysim Click Diamond Dodo Power & Gas Locals Lumo Mojo Power Momentum Next Business Origin People Powerdirect Powershop Q

8 Retailer feed-in tariffs Retailer Residential feed-in tariff by quarter (c/kwh) Red Sanctuary Simply Highest Average Lowest A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Notes: Solar customers eligible for payments under the SBS will have received their SBS payments in addition to the FiTs listed above. Appendix B provides information on how we calculated average FiTs. Origin 's Solar Boost and Solar Boost Plus offers were excluded as they were not generally available to all solar customers; both offers were not available to customers receiving the Solar Bonus Scheme, and Solar Boost Plus was only available to customers installing solar systems either through the retailer, or one of its partners. Sources: Made Easy; QCA analysis. QCA comment Range of feed-in tariffs The range of feed-in tariffs offered to residential solar customers expanded from 6 15 cents per kilowatt hour in the first half of the year to 6 20 cents per kilowatt hour in the second half of the year. This was due to AGL and Mojo Power increasing their highest feed-in tariffs to 20 cents per kilowatt hour. Click was the only retailer to decrease its lowest feed-in tariff during the course of the year, from 10 cents per kilowatt hour in the first half of the year, to 8 cents per kilowatt hour in the second half of the year. Average feed-in tariff The average feed-in tariff offered to residential solar customers also increased in the second half of This was driven mainly by the increases in AGL's and Mojo Power's highest feed-in tariffs, and increasing its highest feed-in tariffs from 11 to 16.1 cents per kilowatt hour Small business offers The table below shows the feed-in tariffs, or range of feed-in tariffs, each retailer offered to small business solar customers in SEQ as well as the lowest, average and highest feed-in tariffs during each quarter of Table 2 Feed-in tariffs offered to small business solar customers, quarters Retailer Small business feed-in tariff by quarter (c/kwh) September December March June 1st AGL Alinta Amaysim Click 4

9 Retailer feed-in tariffs Retailer Small business feed-in tariff by quarter (c/kwh) Diamond Locals ERM Power Lumo Momentum Next Business Origin Powerdirect Powershop Q Red Simply Highest Average Lowest A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Notes: Solar customers eligible for payments under the SBS will have received their SBS payments in addition to the FiTs listed above. Appendix B provides information on how we calculated average FiTs. Origin 's Solar Boost and Solar Boost Plus offers were excluded as they were not generally available to all solar customers; both offers were not available to customers receiving the Solar Bonus Scheme and Solar Boost Plus was only available to customers installing solar systems either through the retailer, or one of its partners. Sources: Made Easy; QCA analysis. QCA comment Range of feed-in tariffs The range of feed-in tariffs offered to small business solar customers was cents per kilowatt hour in Locals was the only retailer to decrease its lowest feed-in tariff during the course of the year, from 12.1 cents per kilowatt hour in the September quarter to 10 cents per kilowatt hour in the December quarter and for the remainder of the year. Average feed-in tariff The average feed-in tariff offered to small business solar customers increased from 9.7 cents per kilowatt hour in the September quarter to 10.2 cents per kilowatt hour in the June quarter. 5

10 Retailer feed-in tariffs 2.3 Trends between and Residential offers The table below shows retailers' solar feed-in tariffs for residential customers in the two previous tariff years. Table 1 above shows the residential solar feed-in tariffs for Table 3 Feed-in tariffs offered to residential solar customers, and quarters Retailer Residential feed-in tariff by quarter (c/kwh) Sep Dec Mar Jun Sep Dec Mar Jun 1st AGL Alinta Amaysim Click Diamond Dodo Power & Gas Locals Lumo Mojo Power Momentum Next Business Origin People Powerdirect Powershop Q Red Sanctuary Simply Urth (a) Highest Average Lowest (a) Urth 's retail authorisation was revoked by the AER in February 2017 following the company's entry into administration. 6

11 Retailer feed-in tariffs A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Sources: Made Easy; QCA 2017a, section 2.1 (Table 1). QCA comment The range of solar feed-in tariffs for residential customers in and (4 11 cents per kilowatt hour) was narrower than the range in (6 20 cents per kilowatt hour). The number of retailers offering residential customers solar feed-in tariffs increased over the three reporting years, from nine in to sixteen in Small business offers The table below shows retailers' solar feed-in tariffs for small business customers in the two previous tariff years. Table 2 above shows the small business solar feed-in tariffs for Table 4 Feed-in tariffs offered to small business solar customers, and quarters Retailer Small business feed-in tariff by quarter (c/kwh) Sep Dec Mar Jun Sep Dec Mar Jun 1st AGL Alinta Amaysim Click Diamond Dodo Power & Gas Locals ERM Power Lumo Mojo Power Momentum Next Business Origin People Powerdirect Powershop Q Red Simply

12 Retailer feed-in tariffs Retailer Small business feed-in tariff by quarter (c/kwh) Urth (a) Highest Average Lowest (a) Urth 's retail authorisation was revoked by the AER in February 2017 following the company's entry into administration. A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Sources: Made Easy; QCA 2017a, section 2.1 (Table 2). QCA comment The range of solar feed-in tariffs for small business customers in and (6 10 cents per kilowatt hour) was narrower than the range in ( cents per kilowatt hour). The number of retailers offering small business customers' solar feed-in tariffs increased over the three reporting years, from eight in to thirteen in New and/or innovative feed-in tariff structures There was one type of innovative feed-in tariff offer during the reporting period Mojo Power Connect and Pass Mojo Power attached a variable feed-in tariff of 20 cents per kilowatt hour for the first 2,000 kilowatt hours exported on its Connect and Pass offers. According to Mojo Power's website, the feed-in tariff was capped at 2,000 kilowatt hours per annum (or 5.47 kilowatt hours per day). Mojo Power explained on its website that, due to solar photovoltaic systems exporting differently day to day, it had taken the approach to pro rata the calculation for each billing period. After the first 2,000 kilowatt hours exported, Mojo Power's feed-in tariff in Queensland was nine cents per kilowatt hour. 9 9 Mojo Power website [accessed September 2018]. 8

13 Retailer market offers 3 RETAILER MARKET OFFERS 3.1 Terms of reference Items 2 and 3 of the terms of reference require the report to: report on variations to retailers' generally available market offer prices that are offered in conjunction with a feed-in tariff, including variations to fixed and variable electricity charges include a comparison and ranking of the net overall bill position from generally available market offers, considering electricity charges and feed-in tariffs. 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 feed-in tariffs and specify the retailer for each offer. 3.2 Variations to prices offered in conjunction with a feed-in tariff While the Direction requires us to report on generally available market offer prices, we report on all offers in the market which offered solar customers a feed-in tariff, even where the offer was a standing offer. We consider this provides a more complete report on the options available to solar customers. 10 Offer prices for the most common tariffs are presented as an annual bill for a solar customer with typical consumption. 11 We consider annual bills provide the most meaningful comparison between the prices under different offers, as offer prices offered in conjunction with a feed-in tariff may have four elements, each of which may impact different customers in different ways: (1) fixed supply charge(s), generally charged per day the supply charge varies from retailer to retailer and frequently covers infrastructure and metering costs associated with the electricity network and retail costs (2) variable usage amount(s) for imported electricity, generally charged on a cents per kilowatt hour 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 kilowatt hour imported to the premises, but for some tariffs the rate per kilowatt hour may vary depending on when electricity is imported. Some customers may also pay charges determined on their level of demand. However, as the number of customers on these offers is so low, we do not include them in this report. (3) discounts, fees and charges (4) feed-in tariff amount(s), paid to solar owners for electricity exported to the network (discussed in Chapter 2). 10 See also QCA 2017a, section 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 for , as this report's figures are based on the whole SEQ population. 9

14 Retailer market offers 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. Appendix B provides more information on how we calculate annual bills Residential offers The three following tables show each retailer's highest and lowest offers for each quarter for residential solar customers. 12 In addition to these summary tables, a spreadsheet containing all offers, including all supply and usage charges, is available on our website. 13 Table 5 Bills for a typical residential flat rate solar customer, excluding solar feed-in tariff payments, quarters Retailer Bill, September December March June Lowest Highest Lowest Highest Lowest Highest Lowest Highest 1st AGL 1,510 1,642 1,468 1,642 1,244 1,642 1,244 1,642 Alinta 1,353 1,663 1,353 1,663 1,316 1,663 1,316 1,663 Amaysim 1,662 1,662 1,662 1,662 1,662 1,662 Click 1,648 1,842 1,648 1,842 1,608 1,884 1,608 1,787 Diamond 1,656 1,656 1,585 1,656 1,585 1,585 1,585 1,585 Dodo Power & Gas 1,530 1,804 1,530 1,804 1,405 1,804 1,405 1,804 1,508 1,736 1,482 1,736 1,381 1,736 1,331 1,736 Locals 1,495 1,495 1,495 1,630 1,495 1,630 1,495 1,630 Lumo 1,596 1,596 1,596 1,596 1,596 1,596 1,596 1,596 Mojo Power 1,609 1,932 1,609 1,932 1,666 1,932 1,666 1,932 Momentum Next Business Origin 1,513 1,653 1,416 1,653 1,416 1,653 1,416 1,653 People Powerdirect 1,496 1,670 1,496 1,670 1,496 1,670 1,496 1,670 Powershop 1,454 1,540 1,403 1,711 1,403 1,711 1,403 1,711 Q 1,368 1,648 1,320 1,648 1,295 1,648 Red 1,427 1,596 1,427 1,596 1,354 1,596 1,354 1,596 Sanctuary 12 All offers are presented as published on the Made Easy website. Origin 's and Powerdirect's offers include the solar metering fee, which they charge solar customers separately

15 Retailer market offers Retailer Bill, Simply 1,372 1,673 1,378 1,673 1,378 1,673 1,337 1,673 A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Sources: Made Easy; QCA analysis. Table 6 Bills for a typical residential flat rate with controlled load super economy solar customer, excluding solar feed-in tariff payments, quarters Retailer Bill, September December March June Lowest Highest Lowest Highest Lowest Highest Lowest Highest 1st AGL 1,660 1,805 1,613 1,805 1,365 1,805 1,365 1,805 Alinta 1,478 1,826 1,478 1,826 1,436 1,826 1,436 1,826 Amaysim Click Diamond 1,819 1,819 1,742 1,819 1,742 1,742 1,742 1,742 Dodo Power & Gas 1,679 1,986 1,679 1,986 1,538 1,986 1,538 1,986 1,627 1,879 1,599 1,879 1,488 1,879 1,438 1,879 Locals 1,721 1,762 1,721 1,850 1,721 1,850 1,721 1,850 Lumo 1,748 1,748 1,748 1,748 1,748 1,748 1,748 1,748 Mojo Power 1,762 2,085 1,762 2,085 1,819 2,085 1,819 2,085 Momentum Next Business Origin 1,645 1,802 1,543 1,802 1,543 1,802 1,543 1,802 People Powerdirect 1,638 1,833 1,638 1,833 1,638 1,833 1,638 1,833 Powershop 1,680 1,780 1,621 1,977 1,621 1,977 1,621 1,977 Q 1,494 1,800 1,412 1,800 1,378 1,800 Red 1,563 1,748 1,563 1,748 1,501 1,748 1,501 1,748 Sanctuary Simply 1,526 1,899 1,562 1,899 1,562 1,899 1,519 1,899 A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Sources: Made Easy; QCA analysis. 11

16 Retailer market offers Table 7 Bills for a typical residential flat rate with controlled load economy solar customer, excluding solar feed-in tariff payments, quarters Retailer Bill, September December March June Lowest Highest Lowest Highest Lowest Highest Lowest Highest 1st AGL 1,742 1,894 1,691 1,894 1,429 1,894 1,429 1,894 Alinta 1,544 1,914 1,544 1,914 1,500 1,914 1,500 1,914 Amaysim Click Diamond 1,902 1,902 1,821 1,902 1,821 1,821 1,821 1,821 Dodo Power & Gas 1,749 2,072 1,749 2,072 1,600 2,072 1,600 2,072 1,699 1,966 1,669 1,966 1,550 1,966 1,500 1,966 Locals 1,751 1,751 1,751 1,907 1,751 1,907 1,751 1,907 Lumo 1,832 1,832 1,832 1,832 1,832 1,832 1,832 1,832 Mojo Power 1,796 2,119 1,796 2,119 1,853 2,119 1,853 2,119 Momentum Next Business Origin 1,719 1,886 1,613 1,886 1,613 1,886 1,613 1,886 People Powerdirect 1,715 1,922 1,715 1,922 1,715 1,922 1,715 1,922 Powershop 1,710 1,811 1,650 2,012 1,650 2,012 1,650 2,012 Q 1,563 1,884 1,490 1,884 1,466 1,884 Red 1,639 1,832 1,639 1,832 1,576 1,832 1,576 1,832 Sanctuary Simply 1,605 1,975 1,623 1,975 1,623 1,975 1,579 1,975 A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Sources: Made Easy; QCA analysis. QCA comment Lowest and highest offers The tables above shows that electricity prices that retailers offered residential customers fell during the second half of the reporting period. Typical bills for residential customers varied between: $1,244 (AGL) and $1,932 (Mojo Power), for customers on flat rate tariffs 12

17 Retailer market offers $1,365 (AGL) and $2,085 (Mojo Power) for customers on flat rate with super economy controlled load tariffs $1,429 (AGL) and $2,119 (Mojo Power) for customers on flat rate with economy controlled load tariffs. Amaysim and Click were the only retailers to offer solar feed-in tariffs on residential flat rate tariffs, but not on offers with economy or super economy controlled load tariffs Small business offers The table below shows each retailer's highest and lowest offers for each quarter for small business solar customers. In addition to the summary table, a spreadsheet containing all offers, including all supply and usage charges, is available on our website. 14 Table 8 Bills for a typical small business flat rate solar customer, excluding solar feed-in tariff payments, quarters Retailer September December March June Lowest Highest Lowest Highest Lowest Highest Lowest Highest 1st AGL 2,638 2,997 2,638 2,997 2,638 2,997 2,628 2,997 Alinta 2,511 3,003 2,511 3,003 2,511 3,003 2,511 3,003 Amaysim Click Diamond 2,905 2,905 2,782 2,905 2,782 2,782 2,782 2,782 Dodo Power & Gas 2,594 2,994 2,694 2,994 2,694 2,994 2,694 2,994 Locals 2,646 2,646 2,646 2,950 2,646 2,950 2,646 2,950 ERM Power 2,805 3,439 2,484 3,439 2,484 3,439 Lumo 2,583 2,887 2,583 2,887 2,583 2,887 2,583 2,887 Mojo Power Momentum Next Business Origin 2,673 2,989 2,623 2,989 2,549 2,989 2,575 2,989 People Powerdirect 2,706 3,025 2,706 3,025 2,706 3,025 2,706 3,025 Powershop 2,700 2,859 2,605 3,177 2,605 3,177 2,605 3,

18 Retailer market offers Retailer Q 2,180 2,815 2,180 2,627 2,151 2,627 Red 2,587 2,887 2,587 2,887 2,587 2,887 2,587 2,887 Sanctuary Simply 2,511 2,709 2,654 2,709 2,654 2,952 2,654 2,952 A dash ( ) means the retailer did not make an offer in the SEQ market or did not attach a FiT to its offer(s). We include retailers that did not make an offer in the SEQ market or did not attach a FiT to its offer(s) in this table to assist stakeholders and solar customers to identify which retailers did not make solar offers. Excludes AGL Home Office Everyday offers. Sources: Made Easy; QCA analysis. QCA comment Lowest and highest offers The table above shows that electricity prices that retailers offered small business customers fell during the second half of the reporting period. Typical bills for small business customers varied between $2,151 (Q) and $3,439 (ERM Power). 3.3 Comparison and ranking of the net overall bill position The Direction requires the QCA to rank solar customers' 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 following percentile levels for electricity imports and export ratios to develop the nine scenarios: 75th percentile three-quarters of solar customers will import less electricity than the 75th percentile customer median half of solar customers will import less electricity than the median, or 50th percentile, customer 25th percentile one-quarter of solar customers will import less electricity than the 25th percentile customer. 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 provides a more complete report on the options available to solar customers. All offers are presented as published on the Made Easy website. Origin and Powerdirect charge the solar metering fee separately, so this charge has been included in the bill to provide a more accurate bill calculation. See Appendix B for more information on how we calculate annual bills. 14

19 Retailer market offers Residential solar customers Table 9 Import level Net annual bill ranking for SEQ solar customers June quarter 2018 (residential flat rate offers) 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 2,817 kwh, Export 771 kwh Import 2,817 kwh, Export 1,644 kwh Import 2,817 kwh, Export 3,112 kwh Simply Simply AFL Plus 10 Online Simply Simply AFL Plus 10 Online Anytime Saver AGL Set and Forget Anytime Saver AGL Solar Savers Simply Simply AFL Plus 10 Online (a) AGL Set and Forget Secure Saver Typical Import 4,335 kwh, Export 1,186 kwh Import 4,335 kwh, Export 2,530 kwh Import 4,335 kwh, Export 4,789 kwh AGL Set and Forget ,119 Anytime Saver Anytime Saver Anytime Saver ,140 Secure Saver Secure Saver AGL Savers ,156 AGL Set and Forget AGL Solar Savers Large Import 6,510 kwh, Export 1,782 kwh Import 6,510 kwh, Export 3,800 kwh Import 6,510 kwh, Export 7,191 kwh Anytime Saver ,502 Anytime Saver ,177 Anytime Saver AGL Set and Forget ,503 Secure Saver ,227 Secure Saver Secure Saver - Home ,552 AGL Set and Forget ,289 Flexi Saver Note: (a) This offer has a $145 fixed incentive, while the offer ranked number 1 has a $170 fixed incentive. Sources: Made Easy; QCA analysis. 15

20 Retailer market offers Table 10 Net annual bill ranking for SEQ solar customers June quarter 2018 (residential flat rate tariff with controlled load super economy) 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 Flat 2,472 kwh, Cont. 1,173 kwh, Export 794 kwh Flat 2,472 kwh, Cont. 1,173 kwh, Export 1,555 kwh Flat 2,472 kwh, Cont. 1,173 kwh, Export 2,684 kwh AGL Set and Forget Anytime Saver Anytime Saver Anytime Saver AGL Set and Forget Secure Saver AGL Savers AGL Savers AGL Set and Forget Typical Flat 3,717 kwh, Cont. 1,754 kwh, Export 1,192 kwh Flat 3,717 kwh, Cont. 1,754 kwh, Export 2,334 kwh Flat 3,717 kwh, Cont. 1,754 kwh, Export 4,029 kwh AGL Set and Forget ,239 Anytime Saver ,062 Anytime Saver Anytime Saver ,246 Secure Saver ,112 Secure Saver AGL Savers ,281 AGL Set and Forget ,118 Flexi Saver Large Flat 5,516 kwh, Cont. 2,417 kwh, Export 1,729 kwh Flat 5,516 kwh, Cont. 2,417 kwh, Export 3,385 kwh Flat 5,516 kwh, Cont. 2,417 kwh, Export 5,842 kwh Anytime Saver ,623 Anytime Saver ,356 Anytime Saver AGL Set and Forget ,642 Secure Saver ,406 Secure Saver ,011 Secure Saver ,673 AGL Set and Forget ,466 Flexi Saver - Home ,093 Sources: Made Easy; QCA analysis. 16

21 Retailer market offers Table 11 Net annual bill ranking for SEQ solar customers June quarter 2018 (residential flat rate tariff with controlled load economy) 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 Flat 2,462 kwh, Cont. 894 kwh, Export 705 kwh Flat 2,462 kwh, Cont. 894 kwh, Export 1416 kwh Flat 2,462 kwh, Cont. 894 kwh, Export 2483 kwh AGL Set and Forget Anytime Saver Anytime Saver AGL Savers AGL Set and Forget Secure Saver Anytime Saver AGL Savers AGL Set and Forget Typical Flat 3,744 kwh, Cont. 1,690 kwh, Export 1,141 kwh Flat 3,744 kwh, Cont. 1,690 kwh, Export 2,292 kwh Flat 3,744 kwh, Cont. 1,690 kwh, Export 4,020 kwh AGL Set and Forget ,308 Anytime Saver ,131 Anytime Saver Anytime Saver ,317 Secure Saver ,181 Secure Saver AGL Savers ,353 AGL Set and Forget ,186 Flexi Saver Large Flat 5,531 kwh, Cont. 2,568 kwh, Export 1,701 kwh Flat 5,531 kwh, Cont. 2,568 kwh, Export 3,416 kwh Flat 5,531 kwh, Cont. 2,568 kwh, Export 5,992 kwh Anytime Saver ,749 Anytime Saver ,473 Anytime Saver ,058 AGL Set and Forget ,770 Secure Saver ,523 Secure Saver ,108 Secure Saver ,799 AGL Set and Forget ,588 Flexi Saver ,197 Sources: Made Easy; QCA analysis. 17

22 Retailer market offers Small business solar customers Table 12 Net annual bill ranking for SEQ solar customers June quarter 2018 (small business flat rate) 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 3,038 kwh, Export 352 kwh Import 3,038 kwh, Export 1,366 kwh Import 3,038 kwh/pa, Export 4,530 kwh Q Flexi Saver 8 1,089 Q Flexi Saver Biz 8 1,008 Rate Fix Q Flexi Biz 8 1,101 Rate Fix ,106 Basic Saver ERM Power Business Adjustable 8 1,213 Powersho p Standard Saver (with Bulk Pack) ,107 Everyday Saver Typical Import 7,983 kwh, Export 925 kwh Import 7,983 kwh, Export 3,588 kwh Import 7,983 kwh, Export 11,902 kwh Q Flexi Saver Biz 8 2,077 Q Flexi Saver Biz 8 1,864 Q Flexi Biz 8 2,106 Q Flexi Biz 8 1,893 Basic Saver Everyday Saver Alinta Business SaverPlus 11 2,409 Alinta Business SaverPlus 11 2,116 Rate Fix Large Import 19,787 kwh, Export 2,293 kwh Import 19,787 kwh, Export 8,894 kwh Import 19,787 kwh, Export 29,501 kwh Q Flexi Saver Biz 8 4,435 Q Flexi Saver Biz 8 3,907 Q Flexi Biz 8 4,507 Q Flexi Biz 8 3,979 Basic Saver ,198 Everyday Saver ,322 Alinta Business SaverPlus 11 5,167 Alinta Business SaverPlus 11 3,979 Rate Fix ,384 Sources: Made Easy; QCA analysis. 18

23 Retailer market offers 3.4 QCA comments Exports and imports During , a wide range of offers, with a range of feed-in tariffs and consumption (import) charges, were available to residential and small business customers. Our analysis shows that the best offer for a particular customer type varied according to the assumed levels of electricity imports and exports. Customers with a low export ratio would generally benefit from offers that included lower supply and usage charges, while customers with a high export ratio would generally benefit from offers that included higher feed-in tariffs. Discounting strategies We observed that some retailers reduced discount rates on market offers with solar feed-in tariffs. Residential offers AGL included guaranteed discounts ranging from 3 to 14 per cent off the total bill and conditional discounts ranging from 10 to 28 per cent on offers which included its standard feed-in tariff of 10.6 cents per kilowatt hour. However, its Solar Savers offer with a 20 cent feed-in tariff included no discounts. Amaysim offered conditional discounts on all its flat rate offers. However, it included a lower discount rate (7 per cent off the total bill) on offers with solar feed-in tariffs, than non-solar offers (15 to 20 per cent off the total bill). Click reduced the discount rate as the feed-in tariff offered increased. For example, the Solar Light offer included an 8 cents per kilowatt hour feed-in tariff and 10 per cent conditional discount off the total bill, while the Solar offer included a 12 cents per kilowatt hour feed-in tariff and a 7 per cent conditional discount off the total bill. Origin 's Solar Boost and Solar Boost Plus offers included a 14 to 19 cent per kilowatt hour feed-in tariff, however included guaranteed discounts of 5 and 7 per cent off usage charges. Origin market offers which included their standard 7 cents per kilowatt hour feed-in tariff included guaranteed/conditional discounts of between 10 and 16 per cent off usage charges, supply charges or the total bill, dependent on individual offer terms. 15 Small business offers Origin included a 14 to 17 cent per kilowatt hour feed-in tariff on its Solar Boost offer, with a reduced discount rate of between 3 and 5 per cent off usage charges. Origin 's other market offers included a standard 7 cents per kilowatt hour feed-in tariff and higher discounts of between 11 and 15 per cent. The discounts of 11 per cent were conditional and applied to the total bill; the discounts of 15 per cent were guaranteed or conditional, off usage charges Except the Origin Supply offer, which had no published discount. 16 Except Origin Supply and Rate Freeze offers, which had no published discount. 19

24 Retailer market offers Incentives Some retailers' bill estimates were lowered due to fixed or once-off incentives. Customers should note that in the second year of being contracted to such an offer, a customer maintaining the same import/export ratio will receive a higher bill than in the first year. As such, it is important for customers to note the length of the contract period when signing up for a plan with a fixed incentive, as the real value of that incentive is spread over the term of the contract. Promotional feed-in tariffs Although we did not include Origin 's Solar Boost or Solar Boost Plus offers in our analysis, customers on these plans need to be aware that they may receive Origin 's standard feed-in tariff at the end of their benefit period. Solar metering charges In our solar feed-in tariff report for , we noted that: 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 did not apply to non-solar customers, being incorporated into the supply charge. 17 In , all retailers except Alinta, Mojo Power, Origin and Powerdirect either did not include higher charges for solar customers on Made Easy, or did not publish solar metering fees. Alinta 's daily supply charges for non-solar offers was 99 cents per day, while the supply charge for solar offers was cents per day a difference of 6.43 cents per day. Mojo Power offered a solar feed-in tariff on its Without Benefits (Solar) offer, which included a daily supply charge of cents per day, while the supply charge for its nonsolar Without Benefits offer was cents per day a difference of 6.43 cents per day. Origin and Powerdirect listed solar metering charges as a separate fee type. 18 Further, in , AGL included higher supply charges on offers that included feed-in tariffs than it did on offers that did not include a feed-in tariff. For example, on its Savers offers in , the supply charge on the offer with a feed-in tariff (6 cents per kilowatt hour) was cents per day, compared to cents per day for the Savers offer without a feed-in tariff; the difference of 6.25 cents per day was the solar metering charge. 19 In however, AGL did not vary its supply charges on Made Easy across its solar and non-solar offers QCA 2017a, section 3.1 (QCA comment). See Energex 2016, Energex Tariff Schedule 1 July 2016 to 30 June 2017, section 3.5 (Table 3.9) for details of solar metering charges in SEQ in See Energex 2017, Energex Network Tariff Guide 1 July 2017 to 30 June 2018, section 3.5 (and the historic pricing publications page of Energex's website) for details of solar metering charges in SEQ in Made Easy; AGL (unpublished) response to part 1 of the QCA information notice for the market monitoring report (see QCA 2017, SEQ retail electricity market monitoring: , market monitoring report, November [QCA 2017b], sections and 10.5 for detail). 20 See the datasets for more information. 20

25 Retailer market offers To support the comparability of offers for solar customers, we consider that all retailers should clearly and consistently identify their solar metering charges in their offers on Made Easy. To ensure that solar metering charges are included in the bill calculations provided on Made Easy, in our view, including solar metering charges in daily supply charges and publishing separate solar offers and non-solar offers would be the most effective way to achieve this. 21 Selecting offers on Made Easy In the reporting period, the offer with the highest feed-in tariff 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 feed-in tariff, 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. In our solar feed-in tariff report for , we commented that solar customers would benefit from Made Easy calculating annual bills for comparison on a net basis, as the Victorian Government's Compare website does. 22 While Made Easy is a valuable 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 when calculating annual bill figures for comparison. For example, Click applies discounts for solar customers to their net bill amount after solar credits have been subtracted. We remain of the view that customers would benefit more from Made Easy if it accounted for revenue from feed-in tariffs. At present, solar customers must calculate these amounts manually for each offer to see which is likely to provide them with the lowest bill. Q small business offers During the June quarter, Q mistakenly uploaded a Flexi Saver Biz + Controlled Load offer as a small business flat rate offer on Made Easy. As the offer included the same charges and feed-in rate as the Flexi Saver Biz offer, our bill estimation methodology considered it to be in the top three offers for all six low export and medium export usage combinations. Q withdrew this offer from Made Easy after one day; we removed it from our analysis and Table 12. To account for this, we have replaced the offer with the fourth best for each of the six import/export combinations. In some instances, the fourth best offer was a superseded or expired Q Flexi Biz offer which was available for a short amount of time at the beginning of the June quarter and produced the same bill value. In this case we have opted to list the next best unique offer. AGL Home Office Everyday offers In the March quarter, AGL published Home Office Everyday offers that allowed small business customers to access residential tariff prices where they operated their business from home. Although these offers were available to small business customers, we have reclassified them as residential offers as they have residential tariff prices. 21 In our market monitoring report for the SEQ retail electricity market for , we argued that all retailers should clearly identify their metering charges that is, for the primary tariff or state that they do not levy metering charges if that is the case, in their offers on Made Easy see QCA 2017b, section 2.3. We consider that these observations also apply to generally available offers for Victorian Compare, 21

26 Glossary GLOSSARY 1st AER AGL Alinta Amaysim Click Diamond Dodo Power & Gas Locals ERM Power FiT GST kwh Lumo Mojo Power Momentum Next Business or NBE NMI Origin People Powerdirect Powershop 1st Pty Ltd n Regulator AGL Sales Pty Ltd Alinta Retail Sales Pty Ltd amaysim Pty Ltd Click Pty Ltd Diamond Pty Ltd Dodo Power & Gas (M2 Pty Ltd) Pty Ltd Locals Pty Ltd ERM Power Limited feed-in tariff Goods and Services Tax kilowatt hours Lumo Pty Ltd Mojo Power Pty Ltd Momentum Pty Ltd Next Business Pty Ltd National Metering Identifier Origin Pty Ltd People Pty Ltd Powerdirect Pty Ltd Powershop Pty Ltd previous tariff year(s) and/or QCA Q Red Queensland Competition Authority Q Limited Red Pty Ltd reporting period 1 July 2017 to 20 June 2018 Sanctuary Simply Sanctuary Pty Ltd Simply Pty Ltd 22

27 Appendix A: Direction Notice APPENDIX A: DIRECTION NOTICE 23

28 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 We report on the lowest, highest, and average, feed-in tariffs between retailers. For our solar feed-in tariff report for , we calculated average feed-in tariffs by dividing the sum of all retailer-offered feed-in tariffs listed on Made Easy for each customer type for each relevant quarter by the total number of offers offering a feed-in tariff for each relevant quarter. For this report, we calculated average feed-in tariffs by calculating the average of each retailer's average feed-in tariff. The reason we changed our approach is because we observed that, in the second half of , the average feed-in tariff based on the approach used for increased from 9.8 cents per kilowatt hour to 10.8 cents per kilowatt hour. The increase was largely driven by AGL increasing its highest feed-in tariffs from 10.6 to 20 cents per kilowatt hour, and increasing its highest feed-in tariffs from 11 to 16.1 cents per kilowatt hour. Because these two retailers had a relatively large share of the number of offers in the market, their increased feed-in tariffs contributed significantly to the overall increase in the average feed-in tariff. Reporting average feed-in tariffs as an average of each retailer's average feed-in tariff removes the effect of the number of offers each retailer has on the average for the market. The tables below shows the average feed-in tariffs for based on the approaches we used for the and reports. Table 13 Average feed-in tariffs offered to residential solar customers, quarters September December March June Average feed-in tariff ( approach) Average feed-in tariff ( approach) Sources: Made Easy; QCA 2017a, section 2.1 (Table 1); QCA analysis. Table 14 Average feed-in tariffs offered to small business solar customers, quarters September December March June Average feed-in tariff ( approach) Average feed-in tariff ( approach) Sources: Made Easy; QCA 2017a, section 2.1 (Table 2); QCA analysis. Highest and lowest feed-in tariffs were the maximum and minimum feed-in tariffs offered to each customer type for each relevant quarter. Origin 's Solar Boost Plus offers were excluded as they were not generally available to all solar customers, as it was only available to customers installing solar PV systems through the retailer. 24

29 Appendix B: Bill calculations Chapter 3: Retailer offer calculations 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 retailer market offer data. Data was 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). Most common tariffs, and combinations of tariffs The most common tariff combinations are based on Energex metering data. Specifically the number of solar customer National Metering Identifiers (NMIs) on each Energex network tariff, or combination of tariffs which were connected for the entire financial year. The table below lists the most common network tariffs, and combinations of tariffs. Table 15 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) Representative levels of consumption (imports) and exports Consumption (imports) The first step in fulfilling the requirements of item 3 of the terms of reference was to establish 'small', 'typical' and 'large' levels of consumption. These consumption levels are used, in combination with export ratios, to rank overall net bill positions for generally available market offers (section 3.2). The typical electricity consumption level was used to calculate annual bills which reflect variations in retailers' generally available market offer prices offered in conjunction with a solar feed-in tariff, as required under item 2 of the terms of reference. We set consumption levels based on the 25th, 50th (i.e. median), and 75th percentile customers based on Energex metering data. We use the 25th percentile level to represent a 'small' level of consumption, as three quarters of customers will consume more electricity than this level. We use the median consumption level to represent a 'typical' level of consumption, as it is the middle level of consumption. We use the 75th percentile level to represent a 'large' level of consumption, as only one-quarter of customers will use more electricity than this level. For customers using a combination of tariffs (residential flat rate combined with economy or super economy controlled load) we use the 25th, median, and 75th percentile levels for each individual tariff. 25