New Zealand Electricity Authority rules in favor of controversial solar 'tax'

The Electricity Authority (EA) of New Zealand has this week controversially ruled that a residential ‘solar tax’ is lawful – potentially clearing the path for similar charges on solar customers across the country.

Hawke’s Bay lines company Unison has caused uproar among environmental groups in New Zealand for charging residential and commercial solar customers an additional fee to connect to the grid. This solar charge has been deemed by the EA as unlawful; a decision that has triggered a public backlash against the authority, resulting in a 30,000-strong petition calling on the EA to protect solar customers.

Greenpeace NZ has called the EA "unfit for purpose" following the ruling, and worries that other utilities and power companies in New Zealand will now feel they have a mandate to introduce similar charges.

"This is a blatant move by the EA to wash its hands of protecting and promoting renewable energy like solar, so that it can continue to massage New Zealand’s electricity monopoly," said Greenpeace NZ campaigner Simon Boxer. "It’s no secret that the EA isn’t a big fan of solar. In the past it has even publicly advised New Zealanders not to rush into installing PV.

"By giving the nod for Unison to penalize solar, the EA is effectively attempting to kill the uptake of solar in our near future."

Unison argues that the charges are justified and that a levy on solar users should be compulsory in order to raise revenue lost as more and more customers adopt solar and thus use less grid electricity and pay lower lines charges. The average annual charge levied on solar customers has been NZ$150. However, Boxer stressed that Unison, as a provider of a public service, is a functional equivalent of a governmental body and thus the charges should be seen as a solar ‘tax’.

"The government set up this monopolized business model of the electricity industry during the energy market reforms," he said. "It was a deliberate policy that resulted in the private profits of the electricity sector taking precedent over national environmental and social interests. It’s a policy that the EA has been basically set up to serve."

The EA should, he added, serve the interests of New Zealanders; interests that lie, post-COP21 (when the country pledged to curb its carbon emissions) in the support of clean and renewable energy.

However, in determining that the charge did not breach any rules, EA chief executive Carl Hanson said that the particulars did not apply to local lines distributors. "We have previously stated that Unison’s new tariff is not as clearly service-based and cost-reflective as it could be, and doesn’t offer sufficient choices to consumers. However, that doesn’t mean it breaches the code. Unison has informed us that its new pricing is an interim step towards our preferred approaches, as it considers it is currently constrained by incomplete roll-out of smart meters and limitations in retailers’ billing systems, which are necessary requirements for service-based prices."

Solar PV installation rates in New Zealand have soared in recent years, growing more than 220% in the 18 months to June 2015, and continuing that trend in the 12 months since.