Following the closure of the Solar Bonus Scheme to new participants on 1 July this year, the NSW Government requested the NSW energy regulator Independent Pricing and Regulatory Tribunal (IPART) to recommend a ‘fair and reasonable’ value for a feed-in tariff for customers who are not in the Solar Bonus Scheme. However, the terms of reference required IPART to ensure that its recommendations did not result in an increase in NSW electricity prices nor require funding from the NSW Government budget. In other words, any future feed-in tariff for these customers must be subsidy-free.
Today IPART released its draft report on the tariffs it thinks should be paid by electricity retailers to their customers for surplus electricity that is generated by customers’ solar photo-voltaic (PV) units and exported into to the grid. The draft report, entitled “Solar feed-in tariffs – Setting a fair and reasonable value for electricity generated by small-scale solar PV units in NSW”, recommends that NSW customers be paid between eight and ten cents per kilowatt hour (kWh) for solar power exported back to the electricity grid. IPART has used as the basis for their recommendation the direct financial gain electricity retailers are estimated to make when solar PV customers export electricity to the grid. IPART expects their recommended price to increase when the carbon tax takes effect on 1 July 2013 but at this time cannot say by how much.
According to the draft report many stakeholders suggested that the feed-in tariff be set equal to the retail price charged to customers by power companies for the electricity they consume (currently 20 to 30 c/kWh). Whilst this appears a sensible suggestion on the surface it does not take into account the fact that around half of the retail electricity price includes fixed network costs and there are additional costs to retailers in meeting green energy requirements such as the Renewable Energy Target (RET).
If you feel up to reading IPART’s Draft Report you can find a copy here. If you wish to air your views on this matter IPART is holding a Public Forum on 12 December and is accepting submissions on its draft report until 23 January 2012.