Proposal could leave solar and battery owners thousands of dollars worse off

April 23, 2026 — 12:01 am

Australia’s ambitious home battery production is under threat from a proposal to increase the cost of connecting to the electricity grid, energy experts warn, as the energy regulator’s proposals could leave home solar and battery owners several thousand dollars worse off.

The Australian Energy Market Commission is pressing a proposal to change the way electricity companies pay for maintaining the network of poles and cables, which account for about 50 per cent of average household electricity bills.

The Australian Energy Market Commission has proposed changes to the way electricity customers pay for pole and cable maintenance. Louise Kennerley

The grid is scrambling to find ways to pay for maintenance, as the growing growth in solar energy (4.3 million solar-powered homes and 500,000 residential batteries) has significantly reduced households’ electricity use.

Payments for the maintenance of the grid are expected to decrease under the current variable charge system applied to the amount of electricity used from the grid.

Electricity costs paid by households largely consist of two parts: the cost per hour of electricity used and the grid charge for maintaining the grid that supplies electricity to homes.

The commission suggested that the centerpiece of the changes would be a move to a higher, fixed network charge that would ensure a “more equitable sharing” of network maintenance costs.

Adopting flat rates could lower costs for wealthy, large families, who are among the largest energy users and could benefit by up to $1,400 a year, experts say. But it could also leave low-income households $200 a year worse off, while those with solar panels and batteries could be $700 out of pocket.

Energy Minister Chris Bowen said rapid uptake of batteries was essential to create a grid powered by clean energy. The Cheaper Home Batteries program reduces the cost of installing batteries by approximately 30 percent.

He was skeptical of the commission’s recommendations.

“We have been clear to industry and regulators: reforms must deliver cheaper bills, better reliability and the modern grid and services we all deserve,” Bowen said.

“This is a controversial and complex area that requires careful and considered reform to balance the interests of those who invest in solar power and batteries with those who do not.”

Green Energy Markets advisory director Tristan Edis said higher fixed grid charges would increase electricity costs for a home with rooftop solar and a 20-kilowatt-hour battery by about $6000 in Melbourne and $8500 in Sydney over its 15-year life.

“This completely erodes the value of the government’s $4,500 battery rebate and therefore could cripple this very successful program,” Edis said, adding that the popularity of Bowen’s home battery program has yielded significant results around the world.

Home installations in Australia in March accounted for 9 per cent of global battery capacity installed by energy companies and almost half of what Europe provided.

The commission’s proposal included an example stating that the average battery owner would save $3,312 in energy savings over 10 years under higher fixed network charges compared to current rules.

Commission chair Anna Collyer said the proposed change would also aim to reduce network maintenance costs by allowing electricity networks to impose “dynamic” network charges that factor grid location and peak usage time into the cost. He claimed this change could reduce costs by $6 billion over five years.

Collyer said he would also implement consumer protection measures that have not yet been finalized to ensure low-income households and battery investors are not worse off.

“By putting these important protections in place, we can prevent these cost structures from being passed on solely to customers. That’s why we’re considering both at the same time.”

Collyer said the commission had received significant criticism from an earlier round of consultation, including from battery owners who argued they should not be disadvantaged by participating in state and federal government schemes encouraging them to cut their dependence on the grid.

“We don’t want people to feel that they were encouraged to invest their hard-earned money and then find that their investment is not worth what they expected,” Collyer said.

The commission’s recommendations included modeling that said the average two-person household with solar panels and batteries could save up to $600 a year by 2040 if dynamic charging and consumer protections were introduced.

Grattan Institute senior researcher Tony Wood, without commenting on the details of the commission’s recommendations, said it was a sound principle to ensure that everyone connected to the network paid a fair share of the maintenance costs, no matter how much electricity they used.

“If you rely on your own water supply and just use your own tanks, you’re still paying for the fact that there’s a connection to your property whether you use it or not,” Wood said.