What does the Carbon Tax mean for me?

[Smurf1976]

I queried about all the people with solar panels generating their own electricity and he claims that they are actually driving the price up !!

True in a literal sense, since solar panels mean less electricity used and thus a higher price per kWh at the household retail level.

But it could be said with equal accuracy that wood fires, anything running on gas, insulation, LED backlit TV's and Hills hoists also drive up the price of electricity by same underlying means as solar - a reduction in net consumption per connection.

Solar cops a lot of criticism but it's primarily for political reasons. With a 1:1 FIT or less as is now common, it has no more real impact on power prices than anything else which reduces net consumption.

In the broader context, plenty of engineers and rational accountants have worked out over the years how to minimise the cost of energy supply to households and it isn't rocket science. All you really need is to (1) focus on electricity and in due course abandon gas and wood unless the total cost of operation is less than the marginal cost of additional electricity which typically isn't the case (2) tariff structure with one option only for pricing, no ability to cost shift by dodgy accounting and (3) direct linkage between all aspects of the industry, generation and network considerations become the primary means of retail price setting.

We've taken a bit of a step in that direction once again in Tasmania, with the Hydro regaining its' effective monopoly status as a generator and cutting costs (and CO2 emissions by the way) as a direct result. That was implemented June 2013 and has been passed on as a cut to household rates of a bit over 5%.

Transmission (Transend Networks) and distribution (Aurora Energy) are also being merged into a single entity (to be known as Tas Networks), again to save costs. To be implemented 1 July 2014.

As for retail, well that's a bit of a downside since the politicians have a bit of a mental block there and still seem to think that adding 10% on top of all costs, then having retailers compete to cut that back a bit, is going to be cheaper than not having that additional cost in the first place. They haven't quite worked out that this isn't going to work yet, but give them a bit of time and reality will whack them in the head no doubt.