In recent news, Origin Energy boss Frank Calabria said, electricity prices could increase by more than 20% from July 1, 2023.
This is due to the anticipated price changes from the energy regulator kicking in come July and resetting benchmark energy pricing. The price rise is likely to impact customers Australia wide who are on standing electricity offers due to lapse. With only about 10% of customers on default offers, and the remainder on market contracts, this will hurt people’s already stretched finances as the changes take effect and customers have to transition to new plans.
Electricity retailers generally use the price as a benchmark to set their plan prices and price increases on market contracts are likely to go up more as retailers set their pricing according to the new default market offer set by The Australian Energy Regulator, making solar batteries even more of an attractive proposition for Australian consumers to help reduce their energy bills and insulate themselves from further price rises.
Why do prices continue to rise?
The anticipated hike to the benchmark price comes after unprecedented turmoil in energy markets from June last year. Wholesale power prices soared to record levels in 2022 as Russia’s invasion of Ukraine collided with surging global demand for fossil fuels driving up prices.
Unfortunate consumers bore the brunt as big energy scrambled to recoup losses by passing on these price increases. This also resulted in a spate of outages at Australian fossil fuel plants that were shut down by operators, rather than falling in line with government mandated price caps.
This prompted the federal government, backed by the state government, to impose temporary caps on wholesale coal and gas prices in December, along with requirements for suppliers to meet “reasonable pricing” provisions in the future. However, this is seen by many as a band-aid solution to a longer term problem that is unlikely to go away anytime soon.
Government intervention is not enough to create stability for consumers already feeling the pinch of rate rises and rising cost of living
While government intervention will reduce the rate by which electricity prices would otherwise have risen, Energy Consumers Australia’s CEO Lynne Gallagher said that was likely to be small comfort for households on low or below-average incomes. For these customers, power bills could make up anywhere between 3% and more than 12% of their disposable incomes. Combined with the super-sized increases of last year, power price hikes of greater than 20% would push many consumers closer to the edge.
A big opportunity for for solar companies to provide relief and help customers save
Solar companies have an opportunity to help customers save money and protect themselves from the rising electricity prices by promoting the use of solar batteries. By using solar batteries, households can avoid buying electricity during peak periods when electricity prices are at their highest. This reduces the household’s dependence on the grid and can lead to significant savings on energy bills.
In addition to cost savings from using more solar energy, solar batteries offer other benefits, such as the ability to participate in Virtual Power Plants such as the Powow Virtual Power Plant which helps customers replace lost savings that were once offered through solar feed-in tariffs.
When a solar battery connected to the Powow VPP is discharged to support the grid, customers get paid $0.45c / kWh for each VPP event helping them earn a passive income from their battery.
And unlike a lot of VPPs on the market, the Powow VPP is retailer neutral so you can stick with your current electricity retailer, or if you are one of the many customers on a standing offer due to lapse you also have the freedom to go deal hunting for the best offer come the July price changes.
Sell the softer benefits environmental and community benefits of solar to less price sensitive customers
In addition, for customers that are also keen on doing their bit on de-carbonsitration there are softer benefits of adopting a holistic solar and battery solution, including reducing greenhouse gas emissions, helping to offset fossil fuel power plants, and increasing energy security overall by helping to keep costs lower for everyone and reducing blackouts and brownouts which have also become more common.
And in the event of a power outage, households who have solar batteries with blackout protection activated have the added benefit of being able to continue to power their homes during these types of events, providing a degree of energy security that is not possible with traditional grid-tied solar panels only.
Give your customers confidence to say “YES” to a solar battery with the Powow PPA
As electricity prices continue to rise, solar batteries become an even more attractive option for households looking to reduce their energy bills. But choosing a payment solution that does not add to the financial pain is paramount. This is why the Powow Power Purchase Agreement is such a powerful solution and could give customers day one savings on their bills – and up to 90% saving ongoingly.
With the Powow PPA in hand you can offer customers a $0 up front payment plan, fixed affordable monthly repayments, inclusive service and maintenance for the full duration of the plan, a 10 year warranty, as well as a 100% system performance money back guarantee that protects customers in case their system stops working.
The opportunity is now!
These unfortunate market conditions are a sad state of affairs for Australia’s energy consumers, but also represent an opportunity for your solar business to be part of the solution. By promoting the use of solar batteries, and offering them an affordable way to do so, you can help them reduce their dependence on the grid and keep them from being held hostage by the big energy companies as prices continue to spiral out of control and new market offers are released come July.
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