In the country with the highest uptake of rooftop solar, and in the state with the highest rate of solar panel ownership, lies the coastal suburb of Hallett Cove.
- A fixed cap on rooftop solar exports mean the the electricity network is being under-utilised in order to avoid rare moments of congestion
- A SA trial of flexible export limits found households could export vastly more energy
- The technology will be rolled out around the country, experts say
Even by South Australian standards, it has a lot of panels. When the sun rises over the Adelaide Hills, its light falls upon a sea of photovoltaic cells, ready to absorb photons and create electricity.
But all this energy generation has created a problem, one that’s hard to see but has far-reaching consequences.
So much electricity is being exported by solar panels to the local grid that it can sometimes overwhelm this network’s capacity.
This “congestion” would usually result in a lower-than-usual cap on the amount of electricity households can export.
But about 18 months ago, the statewide electricity distributor, SA Power Networks (SAPN), trialled an alternative.
In a few suburbs, including Hallett Cove, it allowed participating households to export up to six times the rate of other houses, but with one important condition.
If the local network became congested, SAPN had permission to scale back a household’s rate of export.
Basically, participating households gave the network limited control over their own generation assets, in exchange for being able to export more, on average.
This technology is called “flexible export limits” and if you haven’t heard of it yet, you probably will soon.
It’s almost certainly coming to where you live within the next few years.
For households, its arrival could represent a small windfall.
After years of reductions in feed-in tariffs and the ratcheting down of fixed export limits, as well as the flagging of solar export charges, aka the “sun tax”, this news may come as a relief.
Here’s how flexible export limits work — and whether you might save.
A world-first trial
Keith Thomson is one of the first Australians to trial flexible export limits.
He did so after encountering a problem increasingly familiar to many rooftop solar owners: low fixed export limits.
Twelve months ago, in March 2022, Keith had 6.6 kilowatts of solar panels (the most common size for new systems) installed on his Hallett Cove suburban home.
“Hallett Cove has quite a high saturation of solar and that impacted on the ability of the network to absorb [exports],” he said.
According to Clean Energy Regulator data, the postcode has more rooftop solar installations than it has private dwellings, suggesting at least 100 per cent saturation.
The rate of solar ownership was so high that SAPN had reduced the fixed export limit for new installs from a fairly standard 5kW to a minuscule 1.5kW.
In some parts of the country, network service providers have even export-limited homes to zero kilowatts.
For Keith, the 1.5kW export limit meant less money, as they’d planned to sell a large chunk of their generation back to the grid.
“In general, our power needs are fairly light,” he said.
So instead of accepting the fixed export limit, they took a punt on the SAPN dynamic export limits trial.
Participating households could export up to 10kW, but SAPN could remotely turn down this flow to 1.5kW when needed. (The amount Keith could export was limited by the size of the household’s 5kW inverter.)
Participating in the trial turned out well. For almost all of the past year, Keith’s system has exported every excess watt of power generated by the panels, without any network-imposed limit.
That added up to almost 7,000 kilowatt-hours and a total credit of $590.
“Certainly it’s been advantageous for us,” Keith said.
According to SAPN, Keith’s experience was the norm for trial participants.
“For the trial areas, customers would have been capable of exporting up to 10kW 98 per cent of the time,” said Paul Roberts, head of corporate affairs at SAPN.
Bryn Williams, future network strategy manager at SAPN, described the technology as a “game changer”.
“It’s a key piece of the puzzle in terms of the amount of utilisation of capacity we can get out of the network,” he said.
“We are the first energy system in the world to be moving down this path and adopting more sophisticated ways to use rooftop solar.”
What happened to that congestion problem?
How can households export at more than six times the fixed limit and not run into the issue that’s forcing other households to export much less?
The answer is they do run into this issue, but only 2 per cent of the time.
“There’s actually a significant amount of capacity in the network if energy is being moved at the right time,” Mr Roberts said.
Fixed export limits are analogous to road speed limits. But instead of having 40km/h zones around schools and 110km/h on highways, the limit is set at 60km/h for every patch of road and highway.
“The fixed export limit is a dumb instrument,” Mr Roberts said.
“It means you have to set a lower limit than you would otherwise because you have to cover all contingencies.”
A recent yet-to-be published study conducted by the Battery Storage and Grid Integration program at the Australian National University (ANU) came to a similar conclusion.
Congestion tends to occur for only “fractions” of the year, said Andrew Fraser, the program’s head of engagement.
“That’s 2 per cent of the time — and less than 2 per cent of locations — causing in some cases statewide fixed export limits, which do penalise customers,” he said.
The ANU study simulated the amount of energy that could be exported by households in a coastal northern NSW town with congestion problems, using dynamic export limits.
“We determined that there was three times the energy that customers could export,” he said.
A colossal waste of energy
Fixed export limits add up to a huge amount of foregone generation.
This happens in two ways. First, households with extra-low limits export (and therefore generate) less than they could. Second, the limits works as a disincentive to home owners to install larger solar arrays.
More than three million households — about a third of the nation’s total — have a solar energy system, with the most common size for new installs about 6.6kW.
That adds up to a generation capacity almost as large as that of the nation-wide fleet of coal-fired power plants.
But it could be a lot larger, Mr Fraser said.
A standard-size roof can fit a 10kW array, but most installers recommend households install a 6.6kW array, which is the ideal size for a 5kW inverter.
Why a 5kW inverter? Because 5kW is the standard fixed export limit.
“Fixed limits are filtering through to solar installers saying only install 6.6kW,” Mr Fraser said.
“It’s a waste in the sense of the solar that never gets installed in the first place.”
The company Solar Analytics, which gathers and analyses energy data for thousands of households around the country, had a stab at estimating the scale of this waste.
If the 1.1 million homes who chose a 5kW solar system had instead chosen an 8kW one, this would have generated an additional 4,400,000 megawatt-hours last year, said Stefan Jarnason, the company’s CEO.
If we add to this the energy lost from systems that are larger than 5kW but constrained by the 5kW export limit, the total lost energy exceeds 5,000,000MWh per year, he said.
That’s enough to power about 600,000 homes.
“This additional solar would have increased electricity supply and decreased electricity prices for everyone,” he said.
“That includes households without rooftop solar.”
When will flexible export limits be available?
SAPN is rolling out flexible export limits across the state.
From July 1 this year, all new solar installations in South Australia will have to be technically compatible with flexible export limits.
Bryn Williams from SAPN expects the technology will become the norm across the state within a few years.
Network providers in other states are expected to follow soon.
In October, the Australian Energy Regulator (AER) released a paper on flexible export limits and asked for stakeholder submissions.
The response was positive, with submissions overwhelmingly in favour of the technology.
Endeavour Energy, a network service provider in NSW, wrote: “[Flexible export limits] will become … a key tool to efficiently coordinate the use of the network for exports.”
Most states and territories are likely to have flexible export limits within a few years, ANU’s Andrew Fraser said.
“We work with most of the [network service providers] and my understanding is they’re all looking at it in different forms,” he said.
Stefan Jarnason from Solar Analytics said every state was planning on introducing flexible exports.
“Western Australia is probably the next cab off the rank,” he said.
“There’s no doubt within two to five years every state will have flexible export limits.”
“And then everywhere in the world will get to where we are.”
Will there still be a ‘sun tax’?
The promise of flexible export limits has led some to question the need for solar export charges, also known as the “sun tax”.
In 2021, to the dismay of many, the Australian Energy Market Commission introduced new rules to allow network companies to charge solar customers for feeding electricity to the grid.
One of the main justifications for these charges was the worsening problem of local network congestion.
Stephanie Gray, deputy director of Solar Citizens, a community-based organisation advocating for solar owners, said flexible exports meant the arguments for solar export charges no longer stacked up.
“Flexible export limits are a much better solution to grid congestion than solar export charging,” she said.
“If you move forward with flexible export limits there’s no need to do solar export charging. It’s a fairly easy way to deal with grid congestion.”
But there’s no sign network providers agree.
In February, network providers in NSW and ACT pushed ahead with plans to charge customers an export fee, submitting proposals to the AER.
If approved, the changes would come into force from July 2025.
SAPN, meanwhile, has the option next year of submitting a proposal to the regulator to implement its own solar export charges.
Will I need a new inverter?
Households that currently have rooftop solar will have to upgrade their inverter to take advantage of flexible export limits, ANU’s Andrew Fraser said.
“Customers won’t be forced to upgrade their equipment, but newly installed equipment installed might need to comply,” he said.
Inverters that can vary the amount they export in response to a signal from the network have recently come on the market, and more will be available soon, SAPN’s Paul Roberts said.
“We’ve been working with international inverter manufacturers to encourage them to develop technology to do [flexible export limits],” he said.
Solar owners in South Australia can choose to stick with fixed exports, he said.
“Customers can either opt for a fixed limit 1.5kW or they can go for a flexible option and export up to 10kW.”
Whether the system will be “opt-in” or “opt-out” in other states isn’t yet clear.
Some households may be wary of giving energy companies the power to remotely control export limits via their inverter.
In South Australia, for instance, there’s no legal restriction on the amount of times — or for how long — SAPN can reduce export levels to the lower limit of 1.5kW.
“There’s a lot more work that needs to happen in terms of protection of customers,” Mr Fraser said.
“Customers need transparency as to why their solar was knocked off at this time.”
Energy Consumers Australia, which advocates for residential energy consumers, has called for networks to share the methodology and data they use to determine export levels.
“At the end of the day, it won’t matter if flexible exports are clearly the more efficient and sustainable option unless consumers trust and understand the benefits,” it wrote in its submission to the AER.
“Consumers will own and operate from their backyards, garages, and homes much of the future energy system infrastructure.
“The industry will need their trust and willingness to buy into new ways of using their investment.
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