Gov’t Owned Synergy Enters WA Market

Government-owned Synergy has entered the market in Western Australia for the sale and installation of solar and battery storage systems. This has caused an uproar – with many existing small businesses calling it ‘blatantly unfair competition’ and decrying the fact that a government-owned corporation with substantial competitive advantages will compete directly with small businesses. 

Synergy and the Potential Conflict of Interest

Synergy to enter domestic solar market in WA
Government-owned Synergy to enter the domestic solar market in WA

Synergy is a Government-owned corporation (website here), fully owned by the Government of Western Australia. Synergy, Verve Energy, Horizon Power and Western Power were created in 2006 as a result of the breakup of Western Power Corporation. On 1 January 2014 the retailer (Synergy) merged with the state-owned generation business (Verve Energy). They have a legislated monopoly to buy/sell all energy generated by PV solar systems on residential premises for the whole of Western Australia. According to Wikipedia, Synergy is Western Australia’s largest energy retailer and generator with more than one million industrial, commercial and residential customers, generating total annual revenue of more than $3.2 billion (14/15 financial year).

They recently entered the market for the sale and install of domestic solar/storage systems (which generally cost between $3,000 and $10,000,) competing directly with small businesses.  

Garry Itzstein and the National Electrical and Communications Association

A letter written by Garry Itzstein to the Small Business Minister, The Hon. Paul Papalia, is currently doing the rounds. Mr Itzstein is the Executive Director of the NECA (National Electrical and Communications Association) in Western Australi, which is a peak industry body representing the interests of electrical and communications contractors Australia-wide.

Mr Itzstein’s letter advises that the NECA WA “strongly urges the government to reconsider the previous government’s decision to allow Synergy to compete in the solar and battery storage installation market”, citing already increased competition and declining demand severely affecting existing small businesses. 

According to the letter, Synergy would be able to use their ‘monopoly status, financial strength and government subsidies’ to:

  1. 1 . advertise heavily to its existing customer base (which is the entire retail market of electricity consumers)
  2. leverage considerable purchasing power over equipment suppliers
  3. leverage considerable purchasing power over installers (in the end, these systems must be installed by a licenced electrical contractor)
  4. apply its vast marketing budget
  5. undertake pricing that borders on predatory

We’re inclined to agree – it seems unfair that Synergy are able to enter the domestic solar and storage market in WA and compete against existing businesses, given their huge and unfair advantages. What do you think? Sound off in the comments…

Click to read: Garry Itzstein and the NECA’s letter to Paul Papalia re: Synergy

 

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Solar Power Queensland – 2017 Installations and Projections

April, 2017 – Solar Power Queensland

Energex have released their monthly update of solar installations in south-east Queensland and it appears the number of consumers enjoying the grandfathered ‘premium’ feed of 44c/kWh has finally been overtaken by those with the ‘regular’ retail rate of 6c/kWh.

Solar Power Queensland
Solar Power Installation Queensland (source: onestepoffthegrid.com.au)

Released this week, the data shows Queensland has 1,174MW on 325,164 homes and businesses – the highest in Australia.

172,753 and 539MW of these consumers are still on the premium feed, which is lost upon a change of system or ownership. At its highest over 600MW was being generated at the $0.44c/kWh tariff. The government would be keen to cease as many of these premium feeds as possible before the agreement runs out in 2028 – as currently they’re paying 730% of the ‘normal’ rate. This isn’t as much as Victoria where the tariff was a whopping $0.60c/kWh!

Future Projections – Solar Power Queensland and Australia

According to Newsmaker, Solar PV market size for both residential and industrial sectors will exceed 5 million units by 2030 – to total around 16GW. There are currently around 1.6 million, with a combined capacity of over 5.7GW. (You can find a great deal of useful and detailed data on the Australian PV market from the Australian PV Institute.). Of particular interest is the fact that QLD has the highest monthly PV output by a considerable amount due to generous schemes by the government – and the Northern Territory outputs only 6,281MWh per month (opposed to Queensland’s 172,121MWh). If you want to read more about Solar Power in the Northern Territory we have a page discussing its slow uptake in more detail.

If you’re interested in Solar at your home, some of the major competitors worth checking out (a few don’t operate in Queensland) include  Jemena, United Energy, CitiPower and Powercor Australia, ActewAGL, AusGrid,  Energex, Horizon Power, SP AusNet, Essential Energy and Ergon amongst many others. Solar is growing at an amazing rate and as the cost of equipment and subsequent cost of MWH continues to lower it’ll become bigger and bigger. As the uptake of solar PV systems begins to even out it’ll be time to start looking at ‘smart’ energy storage – which will be able to predict trends based on househould usage habits, weather patterns and so on – with the aim of minimising your electricity bill.

Have a look at our article on Redback Technologies’ Energy Management Platform for more information.

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