Wholesale electricity prices rose across Australia’s National Energy Market (NEM) by 130 percent between 2015 and 2017. In 2017 alone, household bills also increased up to 20 per cent.
Higher wholesale electricity prices are the “new normal” and unlikely to return to previous levels of around $50 per megawatt hour, according to a new report from the Grattan Institute.
Why higher wholesale electricity prices are here to stay?
The report gives three drivers for the upward trend in wholesale electricity prices:
- The closure of two large and ageing coal fired power stations. South Australia’s Northern closed in 2016 while Victoria’s Hazelwood closed in 2017.
- Prices of key inputs like gas and black coal rose just as more generation was required to balance closures.
- Energy generators ‘gaming’ the system by creating artificial scarcity of supply in concentrated markets.
What does this mean for landlords?
With energy prices expected to continue to increase into the near future, tenants will face higher and higher power bills. With more of their money being spent on electricity each month, a rental property that offers cheaper solar electricity will be an even greater incentive.
Now is the perfect time to invest in a solar panel system for your investment property. Why:
- Generate a second income stream by selling discounted solar generated electricity to your tenants today
- Reduce your taxable income with extra deductions and a greater depreciation schedule
- Differentiate your property from the rest of the rental stock
- Give great tenants a reason to stay in your property longer – reducing vacancy rates
Don’t waste another day. Contact us now for a free quote or to learn how solar can increase your investments return.