The “sun tax” explained, without the outrage

The 30-second take

• Two-way export pricing is a network charge on solar exported during the sunny middle of the day, usually paired with a reward for exporting during the evening peak.
• It is live in New South Wales and South Australia.
• It is a network tariff, not a tax, and it is applied by your distributor — how much of it reaches your bill depends on your retailer.
• The logic is real: the grid is congested with midday solar it cannot use and short of power at 6pm. The pricing is trying to move exports.
• If you have a battery, this structure generally works in your favour — you were already shifting export to the evening.

What it actually is

The phrase "sun tax" is a headline, not a description. What exists is two-way export pricing: a network tariff structure where exporting electricity to the grid has a price attached, and that price varies by time of day.

During the middle of the day, when rooftop solar across a whole suburb is producing simultaneously and local demand is low, exporting can attract a charge. During the evening peak, when demand is high and solar has stopped, exporting attracts a reward.

It is applied by your distribution network — the business that owns the poles and wires — not by your retailer and not by the federal government. Your retailer decides how, and how much of, that structure gets passed through to you.

As at 2026 it is in place in New South Wales and South Australia. Other jurisdictions are at different stages of the same conversation.

Why networks are doing it

The problem is genuine, and it is a problem created by success.

Australia has more rooftop solar per person than anywhere in the world. On a mild, sunny weekday, distribution networks in high-solar suburbs receive far more energy at noon than the local area can use, and the surplus has to travel back up a network that was designed to move electricity in one direction.

That creates real engineering costs: voltage management, equipment stress, and in some areas the need to constrain exports altogether. Meanwhile at 6pm, when everyone gets home and solar has stopped, the same network is straining in the opposite direction.

A flat export arrangement gives no signal about any of that. A time-varying one does: it makes midday export slightly costly and evening export valuable, which is precisely the behaviour the grid needs.

“The grid does not need more energy at noon. It needs more at six.”

What it does to a typical bill

For most solar households the direct impact is modest, and it is worth understanding why before deciding how to feel about it.

Free daily export allowances are common, so smaller systems in many cases export less than the threshold during charged periods. The charge itself is a small per-kilowatt-hour amount, and it applies only to exported energy during specific windows — not to the solar you use in your own home, which is where most of the value of rooftop solar sits anyway.

The bigger financial story for solar households in 2026 is not the export charge. It is that feed-in tariffs themselves have fallen a long way. When retailers were paying meaningful rates for exports, export economics mattered a lot. Now that buyback rates in some states sit at a few cents, the value of solar has shifted decisively towards self-consumption.

• Self-consumption is the main game. Every kilowatt-hour you use rather than export avoids the full retail rate, which is many times the feed-in rate.
• Shifting load into the middle of the day — dishwasher, washing machine, pool pump, hot water, EV charging — is now the highest-value behavioural change available to most solar households.
• A battery changes the equation by letting you store the midday surplus rather than export it into a charged window, then use or export it in the evening.
• Check your actual tariff before assuming the charge applies to you. Structures differ by network and by retailer.

Why battery owners come out ahead

If you have a battery, two-way export pricing is broadly aligned with what your system was already doing.

A well-configured battery soaks up the midday surplus that would otherwise be exported into the charged window, then discharges in the evening — either into your own house, avoiding peak retail rates, or to the grid, into the rewarded window.

That is the same behaviour the tariff is designed to encourage, which means the structure penalises the thing you are not doing and pays for the thing you are. Add a virtual power plant arrangement on top and the evening export becomes a second revenue line.

None of that makes a battery automatically worth it — that still depends on your consumption, your capital cost and your rebate. But it does mean the export pricing conversation is a much smaller worry for a battery household than for a solar-only one.

What to do about it

Nothing dramatic. The three sensible responses are all things worth doing regardless of the tariff.

First, find out what tariff you are actually on. Many households discover their export arrangement is different from what they assumed, and the answer is on your bill or one phone call away.

Second, shift discretionary load into the middle of the day. This costs nothing and is the single biggest lever most solar households have.

Third, if you are already considering storage, factor the export structure into the sizing conversation rather than treating it as a separate issue. A system designed around your actual export profile behaves differently from one sized off a rule of thumb.

And if an installer tells you a battery "avoids the sun tax", ask them to show you the numbers for your household. That claim can be true, but it is a calculation, not a slogan.

What this means for you

If you’re a homeowner

• Check your current export tariff before worrying about the charge — structures vary by network and retailer, and free daily allowances are common.
• Shifting appliance use into the middle of the day is free and is worth more than the export charge costs you.
• If you are quoting a battery, ask the installer to model it against your actual export profile, not a generic assumption.
• Be sceptical of "avoid the sun tax" as a sales line. It can be true, but it should come with your numbers attached.

If you’re an installer

• Households in NSW and SA increasingly arrive with questions about export pricing. Being able to explain the network-versus-retailer distinction clearly builds immediate credibility.
• Export-profile-based sizing is a stronger pitch than capacity rules of thumb, and it survives scrutiny when the customer compares quotes.
• Avoid using the sun tax as a fear lever. It is a modest cost for most households, and overstating it damages trust when the customer checks their bill.

Read next

• Home batteries explained
• What system size actually suits your home
• NSW solar and battery rebates
• South Australia solar and battery rebates

Sources

Every quantitative claim on this page traces to one of the sources below — government, regulator, market operator, or independent industry reference.

• AEMC — Access, pricing and incentive arrangements for distributed energy resources
• IPART — Solar feed-in tariff benchmarks
• Australian Energy Regulator — Electricity network tariffs