Rooftop solar has brought energy prices down but the networks say its fast growth is disturbing the peace on their poles and wires. Are PV exports to blame or should the networks get with the times? Jeremy Chunn reports.

Nearly 400,000 new solar systems were secured to rooftops around the country last year, taking the total to more than 2.7 million installations. Many of those proud new owners will be chuffed when they get their first negative bill as reward for buying a system vastly oversized for their purposes. Others who have taken a bit more time to think about what they want from their solar asset will relish the way clean energy can replace electricity bought from a coal-fuelled grid.

What none of them would have ever expected was the possibility of being charged to export surplus solar energy their systems produce – instead of being paid for it – but this is one scenario floated by the Australian Energy Market Commission in a draft determination released in March.

The AEMC is worried about “solar traffic jams”, where more and more PV exports cause voltage levels to rise on local networks. If that’s the case, the continued growth of rooftop solar could be choked off as exports are limited or not allowed. On that basis alone, there’s cause for alarm. But are solar traffic jams real? To get to the answer you have to be able to peer along the powerlines that serve suburban Australia.

The problem is, we can’t. That’s because the vast majority of the 17 distribution networks around the country have no idea what’s happening along their poles and wires. “It’s been a perennial problem for the networks forever – and they just didn’t really care,” says Solar Analytics co-founder and CEO Stefan Jarnason. “Now they are being forced to care.”

Because the networks don’t have visibility, Jarnason says, they are putting in blunt and arbitrary export limits. It’s an approach that is frustrating to proponents of rooftop solar, quite obviously because it may dampen sales growth in the tearaway industry but also because they are convinced the solution is a cheap and quick fix already known to the networks. “They have to monitor voltage on every single feeder, full stop, is my view,” Jarnason says.

The NEM is entering a new reality, after all, where supply and demand are essentially the same thing in a two-sided market. “Every single person should have a right to put solar on their roof just as they have a right to put an air-conditioner in.” Jarnason recommends moving to a capacity charging model – where the price of electricity increases as demand pushes the network to its limit – rather than a volumetric charging model. Networks are only seldom used at their capacity, after all.

At all hours

For evidence that “solar traffic jams” are a myth, just look at the Voltage Report prepared by the University of NSW in May last year for the Energy Security Board as part of its DER Integration Workplan. “Even in the absence of solar PV,” the authors write, “there is a significant level of high voltage across all DNSPs in all NEM states.” In fact, the research found 95% of voltage readings around the NEM were higher than the 230V standard. And it’s not just around noon, when PV systems are exporting like billy-o, but “in all seasons for all daily hours”.

The UNSW researchers relied on data supplied by Solar Analytics. None of the distribution network companies other than those in Victoria measure voltage downstream from local transformers. Networks were built to function effectively before cheap connection and telephony emerged to allow such vastly more expansive possibilities.

None of the distribution companies has adjusted its voltage downwards to align with the 230V European standard that Australia adopted in the 1980s, says Green Energy Markets director analysis and advisory Tristan Edis. Voltage is high in the middle of the day, but it is also high in the middle of the night. It gets down to a reasonable level, Edis says, in the late afternoon-evening peak. As demand rises, voltage falls. It spends about 2% of the time at the lower end of the distribution, “just touching 230 volts”.

“Really, what should be happening is there should be leeway across the entire Australian network to adjust voltages to 230V as the average,” Edis says. “Then, when you have a really good solar day and low demand, you might be pushing up towards 245V instead of 253V. [By lowering the average voltage to 230V] you can allow much more solar into the network.”

Without any ability to read voltage along their lines of distribution the networks have been relying in complaints. The rollout of rooftop solar set the phones ringing at networks as bewildered PV owners asked why their systems kept tripping off.

“They get an angry letter or they get a complaint, they send the guy down and he’ll adjust the taps [lower the voltage] manually on the transformer and, lo and behold, lots more solar can be accommodated,” Edis says.

Networks could also switch households between phases, so that solar owners are not clumped together on one phase. These manual jobs involve costs, but not large costs. Victorian networks Powercor and United Energy put in claims for “solar enablement” in their recent revenue resets which were “quite modest”, Edis says, for a stated ambition in increasing solar penetration from 20% of households to 30-40%.

(SA Power Networks has written to EcoGeneration to take issue with “inaccuracies and misconceptions” in this feature.)

Stuck in the past

If voltage levels are set too high it could be because the networks are stuck in the past, clinging to the belief that electricity demand would grow. If that happened, voltages would fall. Yes, demand may once again rise as electric vehicles replace tired old petrol-powered cars, but the trend for a few years now has been a slow fall in aggregate load.

In order to know whether or not there are solar traffic jams networks need to monitor all the streets in their areas – and they are not doing that. “They’re trying to, and they want to do it, but they have to get permission to spend funding on that and the AER [Australian Energy Regulator] pushes back on it,” Jarnason says. “The biggest challenge is that everybody is being recalcitrant and saying, well, we don’t want to spend the money to monitor out feeders – which is crazy, because it is not a lot of money. It would add cents to everybody’s bill and deliver a much better service for everyone, even in the absence of solar.”

Yes, there are voltage issues in some parts of some networks. But the problem must be monitored so that networks can understand what they can and can’t do to alleviate it. In many cases it’s a simple matter of adjusting transformers, but in many other cases it just isn’t that easy. In South Australia it is common to find fixed-tap transformers, which may have been set too high a decade ago and cannot be tapped down. Instead of it being a simple case of manually adjusting a transformer, new equipment can be added to the transformer that gives it a dynamic voltage tap, Jarnason says. In the daytime it will tap the voltage lower because more power is being generated by solar, and at night it might tap the voltage higher.

The majority of high-voltage events occur at night, “so to pretend that this is a solar problem is just false,” Jarnason says. Voltage on the feeders has been a problem for 50 years. “Now we have the technology, we should be monitoring them. We should be making use of this-century technology and not last-century technology to manage the grid.”

Super-size me

If the networks can accommodate more solar via the simple means of monitoring voltage levels and adjusting them accordingly, that’s great. But the uncomfortable truth remains that solar exports are extravagant. “I’d say 75% or more of output is typically exported to the grid,” Edis says. It’s a statistic that would surprise owners of PV systems – and possibly frustrate them. Why pay to have a system installed that does so much more than supply one’s needs? But there are plenty of people in the industry who think that’s a great idea.

“I’m a firm believer that bigger is better,” says Solar Quotes founder Finn Peacock. Owners may choose to install “oversized” systems to supply them through winter and on overcast days, he says, and they may not mind if exports are limited by a network or the capacity of an inverter. “They want nice consistent large generation through the year – day by day, season by season.”

The decision to install a large solar system may be a buyer’s way around investing in a battery, Peacock says, and they will be well aware that an electric vehicle will eventually replace their car, if it hasn’t already. “I’ve got 6kW on my roof and I’m just about to fill every roofspace on my house with PV because I’ve got two EVs and I need all the energy I can get,” says Peacock, who owns a Tesla Model S with a 75kWh battery and a Mini Cooper SE with a 33kWh battery, along with a 13.5kWh Tesla Powerwall.

The great reckoning for rooftop solar will come when all subsidies are removed in 2030, although Peacock admits he has no idea how that will affect consumers’ decisions. “I think every area will have a solar sponge tariff by then,” he says. “Electricity will be very cheap in solar hours.” The megatrend is that homes and cars are going all-electric, so there may be loads more load coming. “That would help [the issue of voltage on networks],” he says.

At Solar Analytics, Jarnason says it would be a “terrible outcome” if PV systems were sized for self-consumption. His case is built on simple arguments: the bigger the PV system, the cheaper it is; solar reduces your electricity bill, and; solar exports is the cheapest electricity there is and lowers the wholesale price. “The number one driver of our lower wholesale prices is rooftop solar,” he says.

(It has to be acknowledged that as chiefs of solar services companies Jarnason and Peacock will benefit if rooftop PV installations keep growing.)

It used to be the case that a solar system would be sized appropriately for the load and with an aim to maximise return on investment, an industry source told EcoGeneration. These days, however, you either get a 6.6kW or 10kW solution regardless of how appropriate it is. At $0.80/Watt installed, it is probably true that the cost incurred to optimise a solution would outweigh the benefits. 

“Where I have a problem, though,” says Edis, “is with companies that seek to persuade householders to install a solar system without being honest about the fact that most of the output will be exported and therefore will only earn the applicable feed-in tariff, not the avoided import rate from the grid.”

Off the dial

Some parts of the market are now seeing 5kW export-limiting inverters installed to comply with DNSP requirements, on systems that might have 8kW of total capacity. These might be connected to 10kW of panels. In many cases, these households might only be consuming 1kW of power, exporting 5kW and losing 2kW. Feed-in tariffs are going to drop substantially, as they already have in Western Australia, to 3 cents/kWh. “Our view at Green Energy Markets is that will be the norm across other states,” Edis says.

Systems are getting bigger, with some buyers being sold 10kW rooftop power plants. If they find they are exporting most of the generation from a large system for dwindling returns they will feel duped. “That’s what I’m worried about,” Edis says.

Back to the networks, Jarnason’s opinion is that the rigidity in outlook is being experienced at the executive level. “In general, I do think they are making good faith efforts to accommodate solar and improve the issues,” he says. However, most of the DNSPs are corporations motivated by profit, and the truth is that the 2.7 million solar systems installed so far are reducing demand and revenue. Yes, they make 10c/kWh for solar exports but that is outweighed by lost revenue from self-consumption. “The way the system is set up, every DER that goes in loses them money.”

Voltage levels can drop to about 220V, the French standard, so it’s a phoney argument for networks to say they set the voltage higher in anticipation of peak demand sending it lower. If the voltage was set at 230V, it would leave room for it to drop to 220V.

Some of the Victorian distributors use the voltages they see via smart meters at the ends of lines to inform decisions about stepping down voltage at the substation transformers and do so until they see voltages at transformers towards the end of the line approach low levels they are comfortable with. “That way, you can dynamically control voltage,” Edis says.

Victorian distributors own the smart meters, but the AEMC in its requirements for the smart meter rollout has given the job to retailers. If retailers make voltage information available to DNSPs and AEMO, then the dynamic voltage-setting system used by some Victorian networks can be applied around the country. “That would be a simple rule change,” Edis says.