Why alternative energy retailers are rising in popularity for everyday Aussies
If you haven’t noticed, renewable energy is a booming business. From the Australia-Asia PowerLink to NT’s latest $15b NT hydrogen plant, our shift to renewables is predicted to shave $77 from the average Australian power bill by 2024. In Victoria alone, bills are expected to decrease by 7.7 per cent, or $99.
And while climate-focused retailers like Powershop, Amber Electric, and Enova Community Energy only serve a tiny fraction of Australian households; recent acquisitions and investments made by large multinational companies into these retailers show us one thing: Australians are increasingly interested in clean energy providers.
In its most recent take-over, Powershop - celebrated by environmentally-conscious Aussies for their no-carbon guarantee - was acquired by Anglo-Dutch multinational oil and gas company, Shell.
Following the announcement, an estimated 6,000 of Powershop’s 185,000 customers left the electrical provider, citing disappointment in the take-over by a company that currently emits nine times as much CO2 as the entire Netherlands put together.
But while Powershop’s take-over was not particularly favourable to some Australians, other companies have made less controversial moves into the market, such as the Commonwealth bank’s $20 million investment in clean electrical retailer start-up, Amber.
Through the Amber app, users can see the forecast price of electricity, which rises and falls throughout the day based on how much renewable energy is supplying the grid.
Amber says that this forecasting helps users make informed decisions as to when to best use their energy, such as doing the laundry at 8am rather than 8pm, taking advantage of when energy is greener and cheaper.
Better yet, this conscious approach to energy use aims to reduce demand for fossil fuels.
Why is renewable energy cheaper?
The main driver of lower prices will be the addition of new large-scale solar plants. Across Australia, developers have committed to 2,671MW of new solar and 1,393MW of new wind farms.
Looking specifically at solar, its price fall has been driven by three main factors:
Improvements in efficiency
Cheaper manufacturing processes
Lower "cost of capital" — the cost of raising funds to build solar farms has gone down as renewables have become a less risky proposition for investors
Then there’s the payback for households' solar systems: Companies offer credits, known as feed-in tariffs (FiTs), which customers receive for any unused electricity that their solar power system sends back to the power grid. It's usually a set rate per kilowatt hour, and paid as a credit on electricity bills.
Seeing as one quarter of Australian homes have solar panels installed, these FiTs would be helping drive down costs to many Australian homes.
So whether you're for or against large company investment into these smaller energy retailers, one thing’s for sure - green is the new black.