A controversial plan to charge families with solar panels for power they feed back into the grid has drawn new criticism from advocates who say distributors have failed to justify the moves.

Energy distributors including Ausgrid have this week submitted plans to regulators that will see households charged between 0.94 cents per kilowatt hour (c/Kwh) to 3.6 c/Kwh for exported energy, above set limits.

It comes after a 2021 ruling from the Australian Energy Market Operator (AEMO) that allows for such charges to reduce congestion across the power grid in the middle of the day.

But consumer group Solar Citizens says the plan amounts to a “sun tax” on families and will drive up bills at a time when the cost of living crisis is squeezing households nationwide.

The group fears the millions of Australian households who own solar panels will be punished because they generate most of their energy during the day and consume most of it at night.

Stephanie Gray, deputy director of the advocacy body, said the new plans submitted by distributors to the Australian Energy Regulator fail to prove that solar exports will congest their networks.

Under the rules distributors are required to show that solar systems will burden the grid during the day, with the AER previously saying they would not approve tariffs unless this is proved.

“If you look at Ausgrid’s proposal, they use a sample case of looking at all these different places around the network,” Ms Gray said.

“They’re saying that by 2029 there might be three locations that have grid issues – you’re talking about a number of years away.”

Solar Citizens estimates the charges will raise bills by more than $30 a year for a household with a 5Kw solar system – though about half of systems sold are larger than this.

Ms Gray fears these proposals are just the start and that household costs will rise even further.

“This is networks dipping their toes in to see what they can get away with,” she said.

Outcry over ‘sun tax’

The export tariffs distributors have applied for seek to incentivise households to use and store their solar energy during the day, when renewable energy is most plentiful and cheapest by taxing exports in the morning and afternoon.

A “reward” system would be implemented alongside the day-time tariffs that would pay for solar power exported at night, when demand is highest.

Ausgrid – which operates across Sydney, the Hunter Valley and Central Coast in NSW – said in its proposal to the regulator that tariffs would encourage customers to “self consume” their energy in the middle of the day, or “time their exports” to minimise costs and maximise benefits.

“We want to empower customers to use the network and maximise the value they get from self-generation, benefiting from being flexible, and facilitating the transition to net zero,” the company said in its submission.

Solar users will be charged 1.18 c/kwh for energy exported above 250/kwh per year, between 10AM and 3PM. Payments of 2.19 c/kwh will be paid for power exports between 4PM and 9PM.

The changes will come into force from July 2025, but would be opt-in from July 2024.

But Ms Gray said the reward component of the tariff proposals are so insignificant that they’re unlikely to incentivise households to change their behaviour, or purchase battery storage.

And because there are only 140,000 or so battery systems nationwide but millions of houses with solar panels, most working families will not be able to store or export power at night.

“What they’re saying is if we send these price signals we’re telling customers to use more solar in the day and encouraging people to get a battery,” Ms Gray said.

“But the signals aren’t strong enough to drive consumers to change and in some cases they’re being introduced way before they need to be.”