Solar power and the electricity death price spiral

ScreenHunter_26 Jul. 09 16.31

Cross-posted from The Conversation

The electricity ‘death spiral’ is raising considerable angst. Residential demand for power appears to be declining. This has led to higher prices to cover fixed network costs. The Australian Energy Market Commission (AEMC) has highlighted the relationship between embedded generation (such as home solar systems) and network pricing in its Strategic Priorities.

So what is the ‘death spiral’?

The idea is simple. The cost of the electricity network – the wires and poles that bring power to our homes and workplaces – is pretty much fixed. It depends on peak demand, not on the everyday electricity load. The network is built to meet a specified level of reliability so that our power doesn’t go out (too often) on exceptionally hot days in the middle of summer when we all turn on our air conditioning. So most of the time the network costs are just a fixed cost of delivering electricity that doesn’t depend on the amount of electricity that consumers buy.

However, to pay for the network, consumers pay a charge based on electricity consumption. Roughly speaking, network charges are set by taking the fixed cost of the electricity network and dividing by the predicted quantity of power that consumers will buy. This gives a per kilowatt hour (kWh) network charge. As individuals, if we use more electricity we pay more of the network cost. If we use less electricity, we pay less. At the end of the process the network owner gets about the same amount of money, but who pays that money varies with consumption.

Unfortunately, turning fixed costs into variable charges can lead to nasty outcomes. And that is what is happening in electricity.

If consumers have no alternative but to use the electricity network to buy power and power demand is insensitive to price, then there is not too much harm. The variable network charges push up the cost of every kWh we consume but we can’t avoid the payment and, with insensitive demand, we don’t react too strongly to the higher price.

These are the traditional assumptions for electricity pricing. However, the development of rooftop solar power (photovoltaic or PV systems) and more energy efficient buildings and appliances, means these assumptions are wrong.

When consumers install PV systems, their demand for traditional electricity falls. These consumers reduce the amount they ‘use’ the network. But the fixed network costs do not change. So these fixed costs are spread over a smaller volume of electricity. And this means that the price of that electricity has to rise for everyone else.

Of course the rise in price encourages more consumers to adopt power-saving technologies and to install PV systems. So these consumers also reduce their consumption of traditional power. But the network costs are still fixed. So the price of electricity has to rise for everyone else.

And so on.

In the extreme, this ‘death spiral’ can undermine the electricity power system. More likely, it will lead to a group of haves and have-nots. The well-off, who can afford to install PV systems and buy power saving appliances will avoid much of the high power prices. Those who cannot afford solar systems and new energy efficient appliances will pay a high electricity price.

So how can we avoid this outcome? The obvious solution is to fix the pricing. The problem is created because a fixed cost has been turned into a variable price. If the network charges are turned back into fixed charges that can only be avoided by disconnecting from the electricity grid, then the problem disappears. Installing a PV system will not reduce your network charges, only your power charges. The have-nots will not have to pay higher network charges because the haves cannot avoid those charges.

Put another way, when you generate your own power you do not pay for the power that you no longer use. But if you are still connected to the electricity grid, and have the option of using that grid, you do pay for the grid.

Unfortunately, this obvious solution may be politically unpalatable. Network costs make up about 50% of our power bills. It would take a brave minister to tell all those consumers who have spent a lot of money installing PV systems that the savings they thought they would receive have just been reduced by about 50%. The consumers would, quite reasonably, be outraged, particularly as governments have, in the past, encouraged households to install PV systems.

Further, fixed network charges are not without their own equity issues. Is it simply a uniform charge to all power users? Do small households pay the same network charge as big households? Do the rich pay the same as the poor?

One alternative is to break the regulatory contract with the network owners. In other words, tell the network owners that, even if they have efficiently built a network based on government-set standards to the government-announced predicted levels of power demand, the government is not going to allow the network owners to receive appropriate compensation for the costs of building the network.

Put simply, force the network owners rather than the PV owners to ‘take a bath’.

Surprisingly, this solution is more practical than it sounds, at least in the short term, for all states except Victoria and South Australia. In New South Wales, Queensland, WA and Tasmania, the state government owns the electricity network. So the party that will ‘take the bath’ is the state government – or more correctly, the state taxpayers.

In Victoria and South Australia, the electricity networks have been privatised and the private owners would have a strong argument for compensation if the regulatory contract is broken. Again, the state taxpayers will end up bearing the cost of such compensation.

However, breaking the regulatory contract is only a short-term solution. Longer term, a death spiral can emerge so long as fixed network costs are turned into variable customer charges for power. Any effective solution must fix the pricing problem.

So what are the lessons here?

First, for the state governments thinking of privatising their electricity networks – make sure you fix the pricing problem first, because nobody is going to pay a lot of money for a network with a broken regulatory system.

Second, when dealing with utilities such as electricity, make sure prices follow basic economic principles. Don’t assume customers have no options because as technology changes, options appear. Fixed costs need fixed charges.

Article by Stephen King, Professor, Department of Economics at Monash University



Unconventional Economist


  1. Again, and again I read on the subject of privatisation.

    Always after the fact (assets sold) we start seeing appear in well written reports on “what the hell do we do with the unintended outcomes of privatisation” the comment
    (fanfare please Mr. Music)
    “Again, the state taxpayers will end up bearing the cost of such compensation.”

    I think these compensations were built into the scam. Hence the very closely held secret deals when things were sold off.

  2. Interesting stuff.

    Australia produces almost as much off-the-grid PV electricity as the entire European Union (no nearly as much on-grid though). I wonder how this would impact the economics of electricity production.

    As the professor mentions, consumers will simply shift their behaviour if they get the raw end of the deal.

    Watch this space, but I fear that taxpayers will ultimately be the losers in this one.

    • @KeenEyeKen

      Where did you get those numbers from?
      I can see Australia has over 2.4 gigawatts of installed photovoltaic (PV) power (December 2012) That’s on and off grid. Actually off-grid is 10 time less than on grid.

      On the other hand only Germany out of EU has a solar PV capacity as of 2011 of almost 25 gigawatts (GW).

      Italy 17 GW of installed capacity December 2012

      TOTAL per EU is 68.6GW (on and off-grid)

  3. Many electrical transmission assets, such as, and especially, cables have a very long life, and require replacement or upgrade less when they wear out and more due to a perceived requirement for expansion. Hence, in a rational world (not necessarily this world, admittedly) the ‘fixed’ network charge should diminish as the need for expansion declines with electricity use.
    (Note also that to the limited extent that cables ‘wear out’, reduced current flow also aids in longer life, as they are naturally operating at a lower temperature – which also reduces direct transmission oosts via lower voltage losses. Also, the need to operate infrastructure above its design capacity, as is certainly frequently enough for AusGrid, among others to have developed engineering rules around it, is also diminished, further increasing life expectancy)

    • This is an important thing for the economists and guys like UE to keep in mind who don’t know the technical knowledge around electricity networks and how they work.

      I would actually be willing to bet that a lot of the operating costs being spent these days on upgrades (or gold-plating) is actually a result of increased grid-linked PV use. When you’ve got a lot of people in a single neighbourhood with solar panels, you get wild voltage swings and you blow up your autotransformers because they tap-change like crazy on sunny/cloudy days. So then you have to go and add autotransformers and increase your line sizes to withstand these voltage swings. It’s quite similar to having lots of large variable loads on your network (like air-conditioners).

      In a number of jurisdictions, the politicians cottoned onto this too late, but these days you need explicit permission from your local power authority before you can connect your panels to the grid – and in many neighbourhoods people are being knocked back because there’s already too many people producing power in their area to be supported by the network.

      Our electricity network is designed for concentrated production, not decentralised production. There are key differences in the way you design and build for each architecture..

      So I would be very careful if I was UE or anyone in the general media when discussing the network cost increases, and ensure that I understood the technical issues arising in the sector before immediately jumping to conclusions.

      An obvious solution would be to have people’s grid connections monitored and controlled by the power authority remotely in order to minimise issues with grid stability that arise with PV feed-in.

      • This is a little off topic, but it seems there are knowledgeable contributors who are up to speed with electricity distribution.
        As I understand it, as a result of the bushfires in Victoria supposedly caused by a failed insulator allowing a line to fall to the ground and spark a fire, the Coroner ruled the life of assets (poles , crossarms insulators etc) was for a practical purpose 40 years from the date of commissioning.
        Now I don’t drive around looking at every power pole, but I have noticed the poles and crossarms on many power poles look severely weathered and probably not fit for purpose.
        Once you notice one of them you will see hundreds. Does anyone know what the story on the upgrade of the urban electricity distribution network (replacement of poles and cross arms) is. That is going to be expensive. WW

      • notsofastMEMBER


        Another question should be, why haven’t these assets been effectively maintained?

        A stich in time saves nine…

  4. Jumping jack flash

    Hardly surprising.

    These are private companies with shareholders and profit growth to maintain. They must grow at all costs. Growth is god.

    There is no way that a minor annoyance like declining sales will be allowed to affect their growth.

    After all, energy is just as essential these days as having a clean and reliable water connection to your house.

    If there is any danger that profits may stagnate or fall, raise the price and everyone will just have to pay it.

    If you don’t gorge yourself on debt to buy a house to put solar panels all over, too bad.

  5. two plus twoMEMBER

    Nice article summarising the current situation.

    Although it maybe hasn’t slowed the death spiral, the feed in tariff for new connections in QLD is pretty close to 50% of the retail cost per KWh already. FIT is 14c/KWh and retail is around the 26c/KWh. As far as I’ve heard/read, the demand for new solar PV systems in QLD hasn’t slowed since the FIT was drastically reduced, hence the death spiral continues.

  6. This is is not just isolated to electricity but a general problem in utilities. Just look at the problems the Queensland Government experienced with its $9bn South East Queensland water grid. Continuous government campaigns and financial incentives to entice lower consumption during the drought period meant that private household in large numbers installed rainwater tanks, more water efficient devices and permanently changed their consumption behaviors. This permanent lower demand for water (-50%) meant that to achieve cost recovery large price increases were needed. To add salt to the wound the Qld State Government only charges a volumetric charge and not a fixed charge, so all costs needs to be recovered through the variable component! As the Government is unable to increase the variable charges by the amount required to cover the shortfall in demand in one hit (100% increase over night), the Government has resorted to practically selling its water at a $500m annual loss. The forecast price increase for water in Qld is astronomical and will hurt a lot of low income and low consuming people going forward. What I feel is needed in all utility sectors is more infrastructure cost control (we don’t need gold plated bolts) and a less generous return on asset promise by Government to the utility operators.

  7. Is the solution that state governments should pay for all infrastructure maintenance (electricity, gas, water, nbn) and recoup the money through land tax based upon property values? Then households are charged for usage (electricity, gas, water, bandwidth)? Although people with IPs may not be happy about the new taxes, it would presumably replace rates/connection costs and be tax deductible.

  8. For the consumer it really comes down to simple economics.

    Grid connection costs about $500/year
    Peak electricity costs over $0.30/kwh

    PV (amortized over 10 years) $0.12/kWh
    Battery (say 20Kwh storage) $0.25/Kwhcycle

    WOW so if a consumer is certain they can make do with 20Kwh electricity storage its a no brainer OFF-Grid is cheaper for much of rural of NSW. Unfortunately for the Network provider this means ZERO dollars from the newly off-grid shifted consumer.

    Any price increases just push the economics further in PV’s favor. So the only solution is obligatory Grid charges regardless of your connection state. I certainly hope the people of Australia are not silly enough to make that choice.

    • That is the way I see it as well Bob. Also batteries are rapidly expanding in capabilities, so in another 10 years time anyone with PV systems will be off grid.

      However, as you say it will eventually get to the point where everyone will have obligatory grid charges irrespective of connection status as rent seekers always win. I know growing up in the country in NZ rural households had considerably higher council charges than the nearby towns based on the value of the property but did not get rubbish collection, water or sewage like the town did despite paying more.

    • So the only solution is obligatory Grid charges regardless of your connection state. I certainly hope the people of Australia are not silly enough to make that choice.

      Please explain. It sounds sensible to either charge for grid availability or just shutdown the parts of the grid people are not prepared to pay for.

      In fact I propose the same thing for railway access.

      • Not sure I understand.
        It is unlikely that everyone will go PV / off-grid anytime soon, in reality it is unlikely that even 20% of people will take this path, so that still leaves 80% of the possible market to pay for the infrastructure. Now continue to screw the 80% and you’ll quickly be at 70%…60% and so on.

        The option of removing Grid support does not necessarily make sense because the grid costs are mostly fixed costs (high capex, lowish opex). Even in this Aussie rent seeking paradise it’ll be hard to charge for something that you do not make available.
        Anyway once I’m fully Off-grid why do I care if grid connection is available or not.

      • notsofastMEMBER


        When you say “off grid”, do you mean

        1) Connected to the grid with batteries operated in backup/standby only suppling power to you when the network goes down.


        2) Totally disconnected from the grid, i.e using batteries to absorb excess power from your panels and then using those batteries to supply your electrical power needs when the solar panels are not producing.

        There is a big difference and people often describe systems using option 1 as “off grid”. Which is incorrect. These people still use the power grid to export their excess power to other customers when the sun is shining and import their power requirements when the solar panels are not producing.

    • Let us not forget the power of governments to tax you for anything they want!

      ‘…In the wake of the 2008 financial crisis, the Spanish government drastically cut its subsidies for solar power, and now in an unprecedented move wants to make consumers pay for the electricity that they generate and use themselves, a move unheard of in any other country.

      The reforms aim to raise money for combating a €26 billion government debt to utility companies which has built up over the years in regulating energy costs and prices. With Spain in economic crisis, power consumption is falling but the energy debt will continue growing by €4-5 billion a year unless the government takes action.

      The government announced a new “support levy” on solar power. The solar levy is fixed at 6 cents per kilowatt-hour. Private individuals who fail to hook their solar panels up to the national grid to be metered and taxed could face fines of up to €30 million under the new law….’

      • Thanks Cobran, I hadnt heard of the Spanish problem before. I guess it makes some sense depending on the nature of the subsidies that were paid to install PV in the first place.

        NSW has a similar stupid situation where $0.60 FIT was paid a few years ago. Absolute stupidity to have ever allowed high FIT, BUT many people bought very expensive Solar PV systems based on this FIT assumption so they expect to keep receiving it. The reduction of the NSW FIT to near zero has made the option of Off-grid more attractive than it really needs to be.

  9. It is amazing again how little education some people in the government have. It is well known from the course of Public Finance/Economics and from practices all over the world, that any natural monopoly SHOULD/MUST be left public (electricity, water etc.). NO PRIVATIZATION of natural monopoly would improve their efficiency. Private natural monopolies are ALWAYS more expensive and inefficient than public ones.

    Once the market creates a competitive alternative from private sector (like PV solar) supplying the same services, the public monopoly would naturally die.

    The greed of some people doesn’t have limits and that is why some rent-seekers, like private investors of natural monopolies, should bear the cost and the risk of what they bought without even understanding the nature of the privatized asset. No mercy for them, because they were attracted by the monopoly position, not because they can produce something new or efficient.

  10. Diogenes the CynicMEMBER

    The article whilst making salient points misses the effect of new technology in the storage area. Batteries are still woefully inefficient and very costly except for all those who are facing massive charges to connect to a grid (mainly rural setting). However, the price of electricity storage is declining as it does another option is opened for those with money, supersized PV arrays and batteries with no connection to the grid. That means network charges will fall on a declining number of users forcing even more to consider the storage option i.e. the death spiral is even worse than the article makes out.

    The article’s conclusion is correct force the networks to write down their value. WA and Qld will resist as both want to sell of these assets to assist with their short term budgetary issues. I suspect they won’t and will face the problems above in the next five years.

  11. Jut imagine you are the last person connected to the grid! Bill comes:

    -Network access fee 63 millions
    -Usage charge $340

  12. Just out of a interest an 8.5kWh/day off-grid system (that would power a very small house) costs about $35K. So definitely not an option for most people.

    For that money you get:

    Twenty 200 Watt solar panels, a 60 Amp regulator, a 5kW inverter and a 50 Amp battery charger maximise your power output. The inverter is big enough to run many household appliances simultaneously. Charge your batteries with an AC generator if need be.

    • I think your about $10K to $15K dollars above the costs that I was looking at 6 months ago, for a similar system.

      8.5Kwh/day is a reasonable amount of power for a 3 to 4 bedroom house with say 4 people, if you are not including Air conditioning / heating loads and have efficient modern appliances.

      Chinese PV panels currently sell for about $1/W wholesale so 20*200W panels is actually 4KW rated capacity (so costs about $4K uninstalled).

      BTW a 4KW rated capacity will deliver upward of 20KwH/day electricity in mid summer (when AC needs to run)

      Inverters cost about 30c/W to 50c/W so say $1500 to $2500 for a 5KW capacity.

      Usually installation costs can be recouped by RET’s (not sure how exactly this applies for Off-grid)

      This means that my budget for Battery (and related costs) is about $10K. Assuming 1000 full charge /discharge cycle lifetime for the battery these batteries should last about 10 years.

      • Hey, I’m just quoting the price off the RPC’s website (who have been installing off-grid solar for decades BTW).

      • @Lorax maybe you need to stretch your supplier base to include some outside the Nimbin area. Nimbin a very mellow location but not exactly a focus site of engineering excellence.

      • Looked at several solar installers now and they all seem to be in the same ballpark. Dunno where you get your numbers from. Perhaps you could point me at a solar installer that’s offering a 8.5 kWh/day off-grid system for $20K? From what I’ve seen you’re looking at $20K just for the batteries.

      • @Lorax
        my prices are mainly today’s China sourced wholesale prices. I’m more interested in the real underlying cost of the functionality rather than what the local market is charging.

        That said you really need to understand your requirements better than just 8.5Kwh/day.

        The problem is that you can get two weeks bad winter weather where the PV array generates less than 1/10th its rated power. If you upsize the PV array to still supply 8.5KWh than the system will be VERY expensive. Similarly wrt batteries the first question needs to be how many successive days of bad weather are you planning. and will you add a diesel generator as backup.

        If the answer is only 1 day than the Battery pack requirement will be maybe less than 10KwH. If you want 3 days than multiply the storage costs by 3, 5 days equals 5 times the purchase cost.

        The Operational cost of the system (in terms of battery lifetime cycle costs) is also strongly dependent on how you use the power AND how you arrange the PV array (percentage west facing). So a 8.5Kwh/day system might only use 20% after 4pm or it might use 90% of its power after 4pm. In the one case 80% of your electricity use is PV power being directly used, which means no storage cycle costs.

        For my own requirements I decided that it was unimportant to me to be able to store more than a coupe of days electricity because I wouldn’t be there if the weather was that bad.

  13. Hmmmm. do I smell a possible 0.5% rise in the GST rate, perhaps? I know what Abbot said, but a pollie’s word is, well, more shifty than the shifting sands of the Sahara.

    Or some other form of tax – without dropping any of the ones we have now.

    My money is on a new tax.

    Oh, joy

  14. As someone who has had some experience in networks and costings over the years, the key (and the very low hanging fruit) lies in the statement:

    “… The cost of the electricity network – the wires and poles that bring power to our homes and workplaces – is pretty much fixed. It depends on peak demand, not on the everyday electricity load…”

    For a typical system, this might be 3 times average load, and importantly it is a very steep curve. Potential savings for modifying behaviour on only three or four days per year are huge.

    This is not only true for the fixed network but also the generators some of which may only need to spin up one day per year.

    Thus, a pretty obvious approach is to reduce those peak day demands. (Which is why demand management is so important).

    If one is therefore talking about charges, it is really those three or four peak days of the year that need to be concentrated on. Cut those peak days down by 20% and you cut the network and generating capital requirement by nearly the same amount.

    One of the best ways to do that is to use high peak day tariffs and smart meters which are connected to the customer’s consciousness in some way. For example, a digital display with an alarm in the house telling a customer when they are about to enter a punishing tariff zone. A nice high spinning cash register sound ‘Ka-Chingggg! Ka-Chinnggg! coupled to a large display showing the daily cost spinning up would enable the customer to choose to wind that aircon back or face the consequences.

    I suggest that politically, it would not be hard to sell a high tariff for one or two days of the year, and the cost of the installation of smart meters vs massive alternators, transformers is laughably small. Also, while most demand management programs do well initially, they often lose their edge after a while. If the whistles, bells and alarms happen once a year, I suspect that the familiarity breeds contempt issue will not arise.

  15. Attacking peak demand to reduce need for new capital expenditure to provide additional capacity is a major part of the solution.

    That means that everyone who owns an airconditioner ought have to have a local power source such as an off-grid solar PV system, or local storage for 4 hours running which cuts in automatically at say 28 degs celcius.

    Domestic and office “super users” (say the top 20% of households) ought pay a significant additional charge to fund the peaking infrastructure they require.

    Demand pricing could be made mandatory and made finer given the roll out of smart meters.

    In the current system, low using pensioners subsidise the network costs made necessary by very high use households and office design that evidences little concern for heat generation from the sun during summer.

    Part of the problem is also increased densities in our smart cities which put 11,000 people into a hectare (eg Rhodes, NSW) and therefore require massive reconfiguration of the network in that area, although arguably that is partially offset by network expenses foregone on the fringes.

    • IMHO Australia’s peak electricity demand problem is easily solved by 50 year old ripple sense technology. Exactly the same systems that control your off-peak water heaters could be utilized to control ALL air-conditioning loads. A simple rule change requiring ALL household AC systems to have ripple sense enable would fix 90% of the peak demand problem.

      Once you have the load control technology the other half of the problem is too change the retail electricity contracts to reward those that accept that their AC systems will be disabled on 3 or 4 days of the year. All this is very easily and CHEAPLY done and would completely fix the peak demand problem.

      Of course electricity providers dont actually want reduced demand rather they want obscure pricing (read: smart meters) and silly gov’t regulations that require gold plating their networks.

      UE you need to scratch a little deeper and understand the regulations that are driving the grid gold plating, ask yourself the question cui bono!

  16. notsofastMEMBER

    “When consumers install PV systems, their demand for traditional electricity falls. These consumers reduce the amount they ‘use’ the network. ”

    This is wrong. Totally and utterly wrong.

    People who install solar panels are still using the network as much as anyone. They use the network to export their surplus power to other customers when the sun is shining. They use the network to import their power needs when the sun is not shining. Use of the network that they are not paying for.

    To say that a person who has solar panels does not use the network because the energy exported equals the energy imported is typical of the reasoning that is used to justify the solar industry.

    And in this discussion people should never forget that the biggest reason that solar costs are going down is because a country is producing solar panels at significantly below the cost of production. Because the costs are in Yaun and the profits are in US dollars they can hide this state of affairs relatively easily. And for those that are concerned about climate change, they should also understand that the energy that is largely used to produce these solar panels is coal based energy, as the country in question uses coal to supply 70% of their energy needs.

    People need to be become much more questioning of the Solar Industry. And I feel one of the key questions we need to be asking ourselves is, do we really want a power grid?

    • “People who install solar panels are still using the network as much as anyone. They use the network to export their surplus power to other customers when the sun is shining. ”

      Have to disagree with your thinking, the household with PV uses the network less by a certain percentage than an equivalent household without PV and that percentage is equal to the amount of power their PV panels generate and that they use, it is separate to the amount they may or may not export to the network. As the sun does rise each day and PV panels on Australian houses are not concentrating systems then there is always a time across a day/night cycle of 24 hours when the panels are generating power even if its very, very cloudy. I emphasise this last point because critics of solar power tend to obscure this point that PV works whenever there are photons for you and me to see by.

      As to the next two assertions:

      “And in this discussion people should never forget that the biggest reason that solar costs are going down is because a country is producing solar panels at significantly below the cost of production. ”

      The flaw with that statement is that the costs of PV was going down before China entered the volume market and this cost reduction was due to a number of factors (research, learning across the supply chain and the maturation of the supply chain here and overseas). Yeah, you’re using a half fact to construct a furphy as the chinese volume manufacturers are relying on these cost reductions anyway to subsidise their supposed undercutting of the market. Perhaps the main reason for the cost reductions these past three to four years has been the commissioning of silicon foundries so PV is no longer competing with the rest of the electronics industry for base product but this situation may change.


      “And for those that are concerned about climate change, they should also understand that the energy that is largely used to produce these solar panels is coal based energy, as the country in question uses coal to supply 70% of their energy needs.”

      That would only be true if across the lifetime of the PV cells (25 years or so) they never paid back the energy used in their construction and installation. I seem to remember it is about 48 months but that is off the top of my head but even if its twice or three times that then anyone who puts in a PV installation, even if its made using power from a coal station, is going to reduce the overall output of their CO2e emissions.

      If you are going to rail against solar at least give some figures to back up your assertions.

  17. What about the fact that 30% of Australians rent and there is no incentive provided for landlords to install solar panels. As a result the 30% have no way to curb these power bills. The double whammy is renters who are environmentally conscious can choose to have a portion of their electricity use put back to the grid using sustainable measures, but they need to pay more for the privilege.

    As discussed, the most equitable way surely is to have ‘electricity rates’ where a flat fee is charged based on a certain factor (land size, land value… i don’t know). Incentives could then be provided to reduce your rates if you have sustainable measures in place, incentivising all to invest in solar, not just those who are living in their own house.