AEMO power price cap delivers blow to rooftop solar passive income streams

Charles Walker, co-founder and chief executive of RedEarth, a Queensland-based renewable energy technology company that supplies solar-charged batteries and systems to households, said the move meant the “huge upside” his customers had been enjoying would be temporarily unavailable.

“While the cap is in place, the people who have made up to $200 per day will be reduced to closer to the average of $20 per day, for example,” he explained.

The AEMO move has also come at a cost for customers who were topping up their battery from the grid during the day when energy costs around 30p/kWh, and then later selling it back to the grid for upwards of $5p/kWh during the evening peak.

Before AEMO stepped in, RedEarth customers were making between $7 and $14 a day on average, Mr Walker said. But peaks have been much higher.

“The most we’ve ever made for customers is $209 in three hours,” Mr Walker said.

RedEarth’s technology is designed to optimize electricity use, sending power to where it is most valuable, for example to power a home, charge an electric car, or be traded in the external market.

“We’re seeing these very large returns because consumers can make the power and in effect keep it until the prices are right – then our algorithm trades it out,” Mr Walker said.

RedEarth is planning to list on the Australian Securities Exchange in the next year, after banking a $12 million pre-IPO funding round led by Ord Minnett Private Opportunities.

Mr Chard expects it will take around five years until his system is paid off, and his last electricity bill was -$145.

“When you’re paying $1000 in rates and water every three months, you’ve got no control over that. Your power bill is one bill that you can control,” he said. “It’s literally a bill you’ve eradicated, that you don’t expect to come through every three months.”

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