Sanctuary Energy
Your Renewable Energy Partner

freecall 1800 109 099
Your Region: Change your Region
  • Australia
  • Queensland
  • New South Wales
  • South Australia

Answering your questions on renewable energy, your savings, and the environment

Sanctuary Energy’s Carbon Tax Removal Substantiation Statement

Carbon Tax Removal Substantiation Statement

On the 17th July 2014 the Federal Parliament passed legislation repealing the Carbon Tax. In accordance with the legislation energy retailers must release a Carbon Tax Removal Substantiation Notice to the ACCC which highlights any cost savings that have been or will be directly or indirectly attributable to the repeal of the carbon tax in order for these to be passed onto the consumer.

This is Sanctuary Energy Pty Ltd’s (Sanctuary Energy) Carbon Tax Removal Substantiation Notice.

Sanctuary Energy has undertaken an internal review focussed on identifying the cost implications on its business of the removal of the carbon tax. Completion of this review identified two key areas that have been directly affected by the removal of the tax.

Electricity purchase costs

Principally, Sanctuary Energy’s cost of purchasing wholesale electricity has reduced as a result of the carbon tax being removed. In order to quantify this reduction Sanctuary Energy calculated the differential in pool prices pre and post the carbon tax removal. To discern the carbon tax effect outside of other short term supply / demand factors, Sanctuary Energy has analysed the average pool price differential between the off-peak* pool prices post the repeal of the carbon tax (17/07/2014) vs the off-peak prices before the repeal.

* Off-peak pricing has been used for a number of reasons.

  1. Off-peak pricing better represents the short-run marginal costs of coal powered power stations and thus the typical cost of base load power.
  2. Off-peak pricing is less effected by volatility events such as demand spikes caused by extreme high and low temperatures, which can occur during the middle of the day. During these events the implied value of carbon can get diluted as a result of the higher merit order generation being dispatched not fully pricing in the cost of carbon. Therefore during these periods if anything the saving by removing the Carbon Tax will be less.

Using this methodology Sanctuary Energy has found that the average differential has been a saving of approximately $15/MWh (or 1.5c/kWh) commencing from 18 July 2014. Sanctuary Energy will continue to monitor this differential closely, but expects there to only be minor fluctuations caused by seasonality around this value going forward.

When this analysis is undertaken for the period commencing 1 July 2014 onwards the results indicate that for the period up to 18 July 2014 (i.e. the time before the legislation was passed) the wholesale pool price was not discounted. The analysis shows that the reduction in wholesale prices commenced the week after the 17 July 2014. If Sanctuary Energy instead used this date of 1 July 2014 to commence the analysis, the average reduction would be approximately $13/MWh. As this would be inappropriate to apply this saving over the full year Sanctuary intends to pass on the savings on the basis of it being $15/MWh from 18 July 2014, and $0/MWh from 30 June to 17 July 2014.

System updates

To support the introduction and administration of the carbon tax, all retailers were required to make a number of organisational, process and system changes. All billing processes were required to be customised to support line item calculations, and present carbon tax notices on bills and envelopes to comply with regulatory requirements. Sanctuary Energy has and will incur considerable costs associated with this roll-out and informing all of its customers of tariff changes and other cost implications that will affect them as a result of the Carbon Tax removal.

The estimated costs associated with these system updates and communication costs equate to approximately $8.50 per customer. These costs will be netted off against the wholesale electricity purchase cost saving when these savings are passed on to the customers.

Sanctuary Energy will continue to monitor the costs associated with the repeal of the carbon tax and make adjustments to our prices as appropriate.

How long will it take to install my solar power system?

It will usually take one or two days for a 1-2kW system depending on the weather the system size, roof type, roof area and the height.

How much space does the system need?

A 1.5kW solar array requires around 12 square metres.

How long will the system last?

All of our solar panels come with a 25 year manufacturer's warranty which is longer than most of our competitor's products.

Most other components have a 3 or 5 year warranty.

Does the system effect my existing roof?

The frames for the solar panels are connected to your existing roof so nothing will need to be altered.

For a tiled roof we attach the frames to the beams in the roof then the tiles go back into place, depending on your supplier.

For a tin roof it is even easier because the frames are mounted directly to the roof.

Can the solar panels be damaged in a storm?

The solar panels are designed to withstand harsh weather conditions including medium size hailstones. A direct lightning strike would damage the panel. Please check with your household insurance company to ensure the panels will be covered by your policy.

If I sell my property, will the solar panels affect the sale price?

Yes, any investment that lowers the cost of your electricity over a long period of time will add value to your home.

What do the terms 'grid-connect' and 'off-grid' mean?

Grid-connect means connected to the electrical grid. Our Solar PV systems are designed as on-grid systems. This means that they interconnect with your existing energy provider.

Off-grid refers to systems that are not connected to the electrical grid and are commonly used in remote areas.

How do I know if a residential solar electric system will work on my home?

Solar electric power works for most homes. Our systems are engineered to work with most roofing materials. They will work in most locations where direct sunlight is available throughout Australia.

For our smaller systems you will need a north facing aspect of your roof covering about 12 square metres. For larger systems up to 80 square metres of roof space is required.

Shading from trees or other obstructions will reduce the efficiency of an installation.

What maintenance does the system require?

The system should last many years without problems. We recommend that we do a quick system check once a year, just to make sure everything is performing as it should. If your roof suffers from debris (like leaves or presents from birds and bats), a hose down to clear the surfaces will restore the installations performance.

Do I need approval from my Strata?

Some Strata associations have rules regarding the installation of anything on your roof or grounds. If you belong to a Strata consult with your body corporate.

Can I have a Solar PV system on my house and still be connected to the grid?

Yes, most Solar PV systems are designed as grid connectable systems, meaning they are designed to interconnect with the power authority electricity grid.

How do we know that Sanctuary Energy won’t increase your energy prices after we sign up?

Sanctuary Energy, just like all the electricity retailers is governed by State regulators which enforce that no customer can be charged more than the published regulated retail prices for electricity. Retail pricing is reviewed once a year and price changes are done by all electricity retailers on July 1.

What is the Solar Credits Scheme?

In August 2009 the Federal Government passed legislation that delivers additional Renewable Energy Certificates (REC's) to new Solar PV (photovoltaic) systems. These are also known as 'solar credits'.

Unlike the previous rebate scheme there is no means-test for solar credits and the installation does not need to be your principle place of residence. The new scheme is open to all households, businesses and tenants provided that no previous installation has received grants under another scheme.

What is a 'Feed-in' Tariff?

A Feed-in Tariff is the rate at which you are credited for the electricity you produce. The Feed-in credits are funded by your State Government and paid through your Distribution Entity to Sanctuary Energy.

What are Renewable Energy Certificates (REC's)

REC's are an electronic form of currency initiated by the Renewable Energy (Electricity) Act 2000. REC's:

  • May be created on the internet based registry system (known as the REC Registry) by eligible parties for each megawatt-hour of eligible renewable electricity generated, or deemed to have been generated.
  • Are created by registered persons.
  • Are validated by the Office of the Renewable Energy Regulator.
  • Are registered.
  • Are traded between registered persons or traded separately from the physical electricity market via the REC Registry.
  • Are eventually surrendered to demonstrate liability compliance against the requirements of the Australian Government's mandatory renewable energy target or voluntary surrender.

Who is eligible to claim REC's?

Owners or operators of eligible renewable power stations are eligible for REC's provided the appropriate application forms are completed and the renewable energy regulator accredits the renewable energy power station.

Owners of eligible solar water heater installations are eligible for REC's. However; they have the option to claim REC's themselves by completing the appropriate application forms or assign their right to claim REC's to an agent. For more information you can visit the Hot Water Systems page of the Clean Energy Regulator web site.

Owners of eligible small generation unit installations are eligible for REC's which include:

  • Photovoltaic systems
  • Wind systems
  • Small hydroelectric systems

Owners of eligible small generation unit installations also have the option to claim RECs themselves by completing the appropriate application forms or assign their right to claim REC's to an agent.