Solar Power Helps Drive Energy Prices Down in South Australia

The recent uptake of solar and wind energy across South Australia has forced the State’s pricing regulator to reassess wholesale electricity costs, recommending an 8.1% cut to power bills.

While a draft report released on the 2nd October 2002 by the Energy Services Commission of South Australia (ESCOSA) says the changes would currently only affect some AGL SA customers, there’s little doubt other state bodies will be forced to investigate their own wholesale pricing calculations.

The reason for ESCOSA to re-examine South Australia’s wholesale electricity prices comes as the growing demand for alternative energy is seeing less pressure on the Australian Energy Market Operator (AEMO) which is responsible for administering the country’s wholesale electricity costs.

South Australia has the highest uptake of solar power in the country with almost 2.5% of the state’s electricity collected from PV panels on residential and commercial rooftops. This, along with more than a quarter of the SA’s electricity being generated from wind means less demand on conventional electricity networks.

ESCOSA is also using wholesale pricing information based on out dated 2010 estimates from electricity retailers which saw them include safeguards against the Carbon Tax and other factors with the resulting calculation since shown to be significantly higher than the real wholesale costs. They have now implemented the preferred ‘Energy Purchase Cost’ method of calculation and this is more in line with current costs. Essentially, wholesale electricity is cheaper than expected. Subsequently, the commission recommends AGL SA customers with ‘standing contracts’ (approx. 25% of their residential and small business customers) receive an 8.1% cut meaning the average household could be around $160 a year better off.

Paul Kerin, CEO of ESCOSA says: “The wholesale cost represents about a third of a typical residential electricity bill, so the proposed reduction will have a visible impact next year for those on standing contracts. This would benefit customers who have seen electricity prices rise quite significantly over the past three years.”
While this is excellent news for customers still on the grid, the changes will take time to come into effect. The benefits of making the switch to solar energy now mean you can start saving on your electricity bills and you could even earn money by selling your unused energy back to the retailer. If you’re looking for solar power in Adelaide, why not check out Solar Market today.