As you may know, the cost of raw power recently tripled in Australia and the cause was the early closure of inefficient coal plants in NSW, Victoria and South Australia, without having more carbon-friendly alternatives to pick up the shortfall.
As a result, blackouts are expected during peak periods this summer, and Aussie homes will go into darkness.
Since January, Victorian electricity prices went up by 30%, and as indicated below, the raw cost of power up went up by almost 40%.
Future energy costs
Our energy retail partners tell us that clients not under a commercial contract can expect another 25-35% increase in their bills on 1 January 2018. They are also worried there will be a large amount of client leave when their bills hit the mat after Christmas.
Clients renewing their commercial contracts today can expect prices to jump to around 13 or 14c for the peak portion of their power from perhaps 5c.
The National Energy Guarantee (NEG)
It’s not our job to quibble the politics of the NEG, but if the Turnbull government can pass the law, they will have to bring onside the Labor governments of Victoria and South Australia with the key reason being that Australian families and businesses simply cannot afford to see their power prices triple in the space of a year.
Politician’s jobs are on the line and come January the electorate will be beyond angry. If power is a large line item in your budget it could mean laying off staff or switching some machines off.
The NEG is a deft compromise to try and steady prices. If it passes, however, the Greens will cause chaos having been backstabbed by Labor, as it will push back carbon emission targets.
Ironically, a stated goal of NEG is to cancel government grants from larger scale projects not installed by 2020. Last week, we calculated an LGC government grant for a 150kW project that could be worth up to $300,000 in post-install cheques to a local business in Victoria, that they had the potential to miss out on.
The Cost of Commercial Solar
The cost of solar is now cheaper than grid power in most cases. With this in mind, it must beg the question of how much money can your business save by switching to a greener alternative?
Choice Energy’s mission is to reduce expensive grid spending overall regardless of where the power comes. We size systems accurately to take out approximately 50-60% of your day time commercial energy requirement, leaving minimal feedback onto the grid.
Even though our energy procurement team chase your retailer for the best feed-in tariff, (FIT) retailers are only paying your business, in some cases, a third of the cost of the power they sell back to you at peak rates!
A sound investment in a quality commercial system properly installed can bring paybacks with an investment rate of return of between 17-24%, when bought outright, and for some businesses can be cash flow positive from day one using a clean energy lease.