Research by Energy Supply Association of Australia reveals hidden costs of solar panels New research reveals that the one million households with solar panels are avoiding network charges of $340 million a year. SOLAR panels are costing those without them more than $1 billion a year. New research by the Energy Supply Association of Australia reveals that the one million households with solar panels are avoiding network charges of $340 million a year - and rising. The ESAA analysis has also found that "feed-in-tariff" (FiT) schemes are adding $680 million a year. In both instances, these costs are predominantly met by households that have not been able to afford to install solar. Reflecting this, academics' research for AGL has argued that the rage in rooftop installations has delivered the greatest benefit to wealthier households - at the expense of the poorest. While the flaws in many states' feed-in tariffs have become well-known, the ESAA says in a new discussion paper that the $340 million impost relating to avoided network charges is a "hidden cost." It is currently adding $30 a year to others' bills, but this could surge to $300 a year over the next decade. Because solar customers generate their own electricity when the sun shines, they take less from the grid. Under the current tariff setup, this means they pay a lot less, even though they may cost the network more than non-solar customers," the ESAA discussion paper says. Unless we find a fairer way to charge for our networks, households without solar will be paying even more in network charges in the years ahead. To support its argument the ESAA uses an example of a hypothetical household that installs a 4 kilowatt rooftop system. This household's network charge falls from $464 to $178 - a drop of 62 per cent. But, the ESAA says, "the costs of providing the network are mostly the same or even more expensive as a result of rooftop solar energy." To recover the real costs of operating the grid, network businesses adjust their charges so those without solar pay higher power bills. When there were only a few customers with solar panels, the overall impact on the network was very small, the ESAA says. But state and federal subsidies triggered a 100-fold increase in annual installed solar capacity between 2007 and 2011. Most states have been forced to slash FiTs after massive over-runs. These sudden shifts in policy have cost thousands of jobs. Less solar will be installed this year than last - about 750 megawatts versus 1 gigawatt in 2012, according to the Australian Solar Council. "We have been extremely critical of the solar-coaster ride that we've been on," said Solar Council CEO John Grimes. Politicians have tried to pander to the green vote. However, Mr Grimes defended the role of solar, saying it reduced pressure on the network during periods of peak demand such as the height of summer. This meant additional capacity did not have to be built, which reduced bills for everyone. Pink FiT: Annual feed-in-tariff costs by state Victoria: $41m NSW: $210m Queensland: $270m SA: $100m WA: $45m ACT: $14.8m Total: $680.8m Source: ESAA