Experts are predicting a rise in electricity prices of up to 25 per cent or more in some Australian states. And the price surge isn’t going away any time soon.
It’s a chilling reality to face as most of Australia endures one of the coldest starts to winter we’ve seen in decades. Now’s the time we all want to crank up the heating, switch on the lights, and get cosy – not ration out our electricity usage. That’s no one’s idea of a good time.
So what’s going on with electricity prices?
A few things. Let us explain the situation.
The cost of coal and gas has skyrocketed
Electricity retailers are finalising their contracts for the upcoming financial year. But the wholesale price they pay to coal and gas providers in order to run the grid is expected to rise substantially (up to 180 per cent from last year in some states!). There’s really no avoiding that cost being passed on to consumers, particularly when wholesale prices make up 35 per cent of your electricity bill.
Add to this the fact that the Australian Energy Regulator (AER) recently raised price caps on what energy retailers can charge, and you can bet prices are going up.
Supply and demand is shifting
Electricity use dropped while a large portion of the country was in lockdown over the past two years. Now that many of us are back to business as usual, demand has increased once again – but supply issues have thrown a spanner into the works at just the wrong time.
Several coal fired power plants have experienced faults in recent times, posing the threat of blackouts.
And let’s not forget the weather events our country (and the world at large) is contending with. Remember that sweltering Queensland heatwave over summer? Understandably, residents responded by relying heavily on electricity to cool them down. That meant even more unprecedented demand for power.
Global supply chains are in turmoil
The pandemic is still impacting the world’s supply chains. But even more substantially, the conflict in Ukraine, with its associated sanctions on Russian energy exports, is driving up coal and gas prices. Local miners have hiked up their prices as a bidding war is waged on fossil fuels.
But let’s be clear: even if COVID-19 was eradicated tomorrow, and the Russian-Ukrainian conflict subsided too, fossil fuel prices would stay high. Shifting energy needs around the world, as well as weather-related production roadblocks, are other important pieces of the energy crisis puzzle that won’t be solved overnight.
Smaller energy retailers can’t keep up
The volatility of the market is forcing many energy retailers to increase their prices. A lot.
One company, Reamped Energy, even openly encouraged its customers to look for a better deal elsewhere, because they can’t offer competitive prices in the current market.
With smaller retailers effectively ‘bowing out’ because they can’t compete, experts are predicting that many customers will flock over to the major big energy companies – Origin Energy, AGL, and EnergyAustralia – which are better equipped to sustain their pricing for a little longer. But even they are tipped to increase prices by 10–15 per cent after new wholesale prices are signed off on from 1 July, 2022.
So as you can see, events around the world and on home shores have created a recipe for disaster. One that’s shooting electricity prices sky-high.
Should you be worried?
In short, YES! You should be. The energy crisis is threatening not only your bank account, but your very way of life.
During the COVID-19 pandemic, home became our safe space. Our sanctuary. Sure, we couldn’t go to the movies, get a massage, or have dinner parties with friends – but at least we could cook our families hot dinners, relax on the couch with the split-system blasting warm air at us, and watch Netflix.
If we can’t afford to power our homes, we’re looking at the miserable reality of no lights at night, no running appliances, no ability to work and stay connected via the Internet, and no entertainment like social media or TV.
This isn’t an exaggeration. The stock market is in freefall right now, with mortgage rate increases about to put heavy pressure on family budgets. So you can see why the country is up in arms about the energy crisis, and why many people are seriously worried about what it means for day-to-day life.
But just before you transform your house into a ‘glorified campsite’, complete with aggressive electricity rationing – know that there IS something you can do to protect your family and household.
Here’s what you can do about it
1. You could shop around for better rates
Go ahead and compare energy plans, to make sure you’ve got the best deal on the market. Why not? But to be frank, you’ll probably struggle to find a ‘good deal’ right now. It’s truly slim pickings out there. Finding a better fixed rate for energy is only a short-term band aid fix.
An even better solution would be for your household to produce its own electricity, so you’re not beholden to the volatility of the electricity market.
2. Switch to more reliable solar power (now’s the time to do it!)
Solar panel power is free daytime electricity. It’s kind of a no-brainer. With grid prices skyrocketing, solar power makes more financial sense than ever before.
That said, the rules of solar have changed. Whatever power you don’t use is lost. And if the grid is oversupplied, your solar panels can even be switched off.
Unless you have a solar battery.
3. Protect your way of life with a solar battery
Installing solar panels and generating your own, more affordable power is one thing: but you’ll insulate yourself from the energy crisis even more by adding a solar battery as well.
Here’s why it’s time for solar batteries to shine:
- The payoff period is shorter than ever, with more reliable and affordable battery options now on the market. There’s no need to ‘wait for batteries to become more affordable’. They’re affordable NOW! (And supply chain pressures are making them more expensive every month.)
- Paying for a solar battery is more accessible than ever, especially with options like ShineHub’s Powow PPA. It allows you to get panels and a battery installed, giving you access to affordable renewable energy straight away, for less than what you’re currently paying for electricity.
- Joining a Virtual Power Plant (VPP) actually allows you to make a profit from your solar battery. Not just SAVE money, but earn an INCOME from it.
Buying a solar panel and battery package, or retrofitting a solar battery onto existing panels seriously adds up financially.
Let’s look at the numbers
We’ll operate off the following estimates –
- Grid power rate: $0.32kWh
- Your retailer’s solar feed-in tariff (FiT): $0.01kWh
- Total battery capacity: 13kWh x 90%
If you have solar panels and no battery, you get the solar feed-in tariff as a credit for sending power back to the grid. But you still have to buy power at night from the grid at a high cost ($0.32).
If you DO have a battery, this changes. You can store the extra daytime power generated by your panels that you would otherwise have sold back to the grid, and won’t need to buy power from the grid overnight.
The benefit of the battery is the difference between the price of grid power and the solar FiT.
In this case: $0.32 x 0.9 x 13 = Savings of $3.77 per day, or $1,366.56 per year.
Oh how the tables have turned
When you have a solar battery, the higher the electricity rate goes, the more you save! While your neighbours who haven’t switched to solar are lamenting the price hikes, you’re just over here doing a little happy dance.
The added benefit of joining a Virtual Power Plant can give you up to an additional $200 savings per year from energy that you sell back to the grid at a market-leading rate of $0.45c. And it means you’re helping out your neighbours too, protecting the grid from blackout if there’s a power shortage.
The current price hikes mean that in most cases, adding a battery with ShineHub is going to be financially better than staying with the grid. We don’t price gauge and aren’t tied to any particular battery supplier. We’re free to just help people access the best solar system to meet their needs, at an affordable price.
Let ShineHub help you weather this storm
You may have noticed something else causing you to turn your lights off (and pretend you’re not home) lately: The return of solar door-to-door salespeople. ‘Solar sharks’, as we like to call them. They’ll probably try to convince you to buy their overpriced solar panels on the spot, using the energy crisis as a leverage point. But they usually don’t have your best interests at heart, and they miss a major part of the equation: the value of a solar battery and VPP.
Pushy salespeople aren’t nice to deal with. Neither are skyrocketing electricity bills.
ShineHub takes out the ‘ickiness’ of dealing with solar sharks, putting the power into your hands throughout the process.
Here’s how the ShineHub system makes solar truly shine:
- Transforming the solar shopping process – It’s all intuitive, easy, and online. You are in charge, rather than an overzealous salesperson.
- Making solar batteries more accessible – Batteries are the missing piece in the solar puzzle – especially now that grid electricity prices have jumped up. Our leadership position in the battery market enables you to get an affordable, reliable battery that pays itself back sooner than going with others.
- Allowing you to save sooner, with the Powow PPA – With our easy payment plan, you can get access to a solar system sooner, and start benefiting from the savings straight away. In current market conditions you can pay it back around within its warranty period, too.
- Supporting you with solar aftercare – Our market-leading Solar Aftercare Program ensures that you’re looked after for the entire life of your solar system. You can easily log issues on our app, and our team will help you get it sorted.
- Innovating and pushing boundaries – ShineHub is continuously shaping the future of solar power in Australia. Our best-in-class battery products and solutions, as well as category-defining solutions, such as an online e-commerce model for buying solar, mean that switching to solar is easy and accessible for most Australians. Learn more about our mission to transform the solar industry.
- Transitioning to renewable energy collectively through VPP – Joining the ShineHub VPP means joining our mission to offset as many gas-powered plants as possible, while creating sustainable communities. (By the way, we’ve currently offset 18 plants and are on our way to offsetting our 19th!)
It’s ridiculously easy to switch to solar right now
So what are you waiting for? Your next electricity bill to literally bring you to tears? You’re not alone or out of options in this energy crisis. We’re here to help you take charge and protect your way of life.
But you need to take the first step.
Visit our system design tool to see how affordable solar panels and a battery can really be (brand new, or a retrofitted battery to your existing solar panel system). We’ll do a consultation to ensure you’ll benefit before moving forward. You’ve got nothing to lose – except a whole lot of money if you don’t do anything at all.
Disclaimer: VPP, BNPL or Powow PPA products are for approved customers only. Contact ShineHub to confirm your eligibility. Terms and conditions apply.