Household renewable energy overview

Household customers receive three types of benefits from installing renewable energy: 

1. Savings from purchasing less energy from your retailer (because you are using energy generated by your renewable energy system);
2. Payments for any excess electricity that your renewable energy system feeds into the electricity grid; and
3. An upfront discount on the purchase price of your renewable energy system (Commonwealth Government scheme).

The benefits above vary depending on your system size, and the time and quantity of your household energy use. With the exception of item 3 (upfront discount) the benefits can only be estimated, it is not possible to provide an exact financial value in advance of installation so be wary of any sales people that make such claims. 

Learning about how renewable energy works and the likely benefits you will receive requires a small investment of your time. However, the time invested will improve your understanding, likely leading to a more satisfactory purchase. Energy Policy WA has developed the FAQ document ‘Help Me Go Solar’ to assist household customers in deciding whether household renewable energy is right for them and the 'Upgrading your solar system' information sheet for households who already have solar and are considering upgrading their system. In addition to the fact sheets, high level information is provided below on the three benefits of system installation.

• Solar PV Frequently Asked Questions: Help me go solar (PDF)
• Energy Policy WA Information Sheet: Upgrading your solar system (PDF)

1. Electricity savings

Households with renewable energy systems in Western Australia are net metered. This means that when the system is generating, the energy is first used to meet your household consumption, with only excess energy being exported to the electricity grid. When your system is not generating energy, or is generating less energy than you need, you will be purchasing electricity from the grid at your regular tariff rate.

All energy that you consume from your system is energy that you’re not buying from your retailer, therefore it has a value to your household that is equivalent to your tariff rate. Most household customers are on the A1 or A2 residential tariff. These savings are generally the biggest benefit that customers receive from installing renewable energy.

The benefits you receive from reduced electricity purchases will result in a lower bill, but the savings won’t be provided as a separate line item on your bill. This is because retailers do not have the ability to see how much of your system generation is used in the home, they can only see how much energy you purchase, and how much you export to the grid.

2. Selling excess renewable energy

You can sell any excess energy your system generates under the Renewable Energy Buyback Scheme (REBS). In most cases this is a minor benefit, with the majority of savings coming from using the energy yourself, rather than selling it your retailer. 

The requirement for Synergy and Horizon Power to offer REBS is provided under the Electricity Industry (License Conditions) 2005. These regulations also establish the minimum eligibility criteria, as well as the requirements for amending the retailer’s REBS contracts. The rate offered under REBS reflects the market value of energy, and as such, it varies between retailers and over time (for Horizon Power customers, the rate varies depending on your location).  For Synergy customers, and the majority of Horizon Power customers, the rate is lower than residential tariff rate.

You should always check the rate and eligibility criteria with your retailer before you purchase a system, and remember that the rate can change, it is not locked in when you purchase your system.  

• REBS for Synergy customers
• REBS for Horizon Power customers

The FAQ document ‘Solar Panels and Electricity Prices’ may also assist in understanding how the REBS rates are calculated and why the rate is usually less than the price you pay for electricity.

• Solar PV Frequently Asked Questions: Solar panels and electricity prices (PDF)

3. Upfront incentives

The Commonwealth Government provides incentives for the installation of renewable energy systems. Eligible installations are issued with Small-scale Technology Certificates which can then be exchanged for an up-front discount on a system’s purchase price (or less commonly, sold separately). Some information on this Scheme is provided in the FAQ document above. However, it is recommended that you seek further advice from the Clean Energy Regulator. 

• Clean Energy Regulator: Small-scale technology Certificates
• Clean Energy Regulator: About solar panels
• Clean Energy Regulator: About solar hot water systems

Historical information: Feed-in tariff customers

Western Australia’s residential net feed-in tariff scheme has now closed. Existing customers can find information and help on the FAQ ‘Feed-in Tariff Scheme’.

• Feed-in tariff: Frequently Asked Questions (PDF)

REBS for residents, schools and non-profit organisations

In Western Australia, government-owned retailers must offer eligible customers a buyback scheme. This ensures residents, schools and non-profit organisations with renewable energy systems can sell their excess energy to Synergy and Horizon Power. According to requirements, the retailers establish their own terms and conditions (including rates) for buying excess energy and are responsible for running the Renewable Energy Buyback Scheme (REBS). Energy Policy WA approves the terms and conditions of each retailer’s buyback offer.

Objectives

The objectives of this scheme are to:

• provide eligible owners of renewable systems with a framework to sell the energy their systems' export; and
• ensure owners receive ‘fair and reasonable’ terms, conditions and rates for exported energy.

Delivery

The Western Australian Government established the requirement for retailers to offer a buyback scheme through the Electricity Industry (Licensing Conditions) 2005 (PDF). The regulations define an eligible customer as:

• a residential customer who consumes not more than 50MWh of electricity per annum; or
• a customer that is a school, university or other educational institution; or
• a customer that is a non-profit-making organisation. 

Retailers may also choose to accept customers in to the scheme who do not meet the minimum requirements of the regulations. For example, Horizon Power offers REBS to its commercial customers.

Reviewing terms and conditions

Terms and conditions, as well as buyback rates, vary between the retailers. These may change from time to time, depending on changes in Western Australia’s electricity industry. Assessment as to whether these terms and conditions are ‘fair and reasonable’, involves consideration of: 

• the wholesale cost of electricity for the retailer;
• line-loss reductions provided by distributed renewable energy;
• peak reductions provided by distributed renewable energy;
• capacity benefits provided by renewable energy; and
• the costs to retailers in running REBS.