With electricity prices on the rise, now is the best time to invest in solar energy.
The sun doesn’t charge us to shine, so we should take advantage of its energy to save on our electricity bills.
Why are electricity prices rising?
Electricity prices are rising due to a number of factors. It’s not a simple equation, but we’ll explain it as best as we can.
- Wholesale electricity pricing
Generating electricity accounts for a quarter of your electricity bill, according to the Clean Energy Council.
We rely a lot on gas in Australia, and gas prices are on the rise. We use gas power plants to generate electricity, so of course electricity will rise because of that.
People are looking to other sources to generate electricity, so the price has risen.
- Costs of distribution and “Poles and wires”
Maintaining an electricity grid to distribute power costs quite a bit.
Network charges have risen – take a look at what the ACCC has said about this.
After the 2009 GFC, NSW and Queensland made large mistakes by ‘over investing’ in their electricity grid due to high demand, and today we are seeing the high cost consequences of that.
- No long-term energy policy
Our nation’s energy policy is unclear beyond 2020. The consequence is that business has been too scared to invest in any new buildings to replace our old, inefficient power plants.
- Gas exports
Australia largely exports gas to foreign countries – in fact, we are set to become the world’s biggest exporter of natural gas in 2019. This has reduced supply in Australia and Aussie businesses are struggling to get hold of it. The result? Higher prices.
- Retailer charges
Your energy providers like to increase their charges for billing customers. Despite intense competition between power companies, we haven’t seen any reduction or ‘undercutting’.