April 20, 2018

Solar tariff heading in wrong direction


Renewable energy
More than 33,000 households and businesses in the Ballina, Lismore and Tweed areas could face higher electricity bills due to a proposed reduction in the solar feed-in tariff.

NSW Greens Renewable Energy spokesperson Tamara Smith MP said 33,144 solar households and businesses could be affected after the Independent Pricing and Regulatory Tribunal (IPART) released an issues paper on solar feed-in tariffs.

One suggestion was to reduce the benchmark price paid for households generating solar electricity from 11 cents per kilowatt hour in 2017/18 to 8 cents in 2018/19. 

"About 30% of the Northern River region's households are generating their own power with solar, well ahead of the NSW state average of 18%, so any proposed reductions in the benchmark price will have a major impact on a significant number of households," said Tamara Smith.

"The Greens recognise that solar power leads to cleaner air, reduced carbon emissions and cheaper electricity.  The uptake of solar power should be encouraged and that is why I have introduced a Bill into the NSW Parliament to ensure a minimum, fair price for solar," said Ms Smith.

Ms Smith has introduced the Electricity Supply Amendment (Fair Price for Solar) Bill 2018 into parliament on behalf of the Greens.  The Bill will replicate Victoria's criteria for establishing a mandatory minimum price which includes placing a value on the savings to health and carbon costs by using solar power, reducing the amount of fossil fuel pollution in the environment, and recognising the reduced spend on infrastructure.

NSW Greens energy spokesperson Jeremy Buckingham said, "If the NSW Government are serious about supporting renewable energy then they should be saying wrong way, go back to IPART."

“NSW should be ensuring that electricity retailers pay a fair price for the solar electricity that is fed into the grid from roof top systems.

“This proposed reduction in the benchmark price paid for households generating solar electricity from 11 cents per kilowatt hour in 2017/18 to 8 cents in 2018/19 is a direct result of the NSW Governments failure to instruct IPART to assess the true value of solar power.

“Unless the NSW Government steps in then this decision will be a huge hit to the electricity bills of over 400,000 households and businesses that have installed solar panels in NSW and will act as a disincentive to further uptake of solar panels.

“Solar power is working to even out demand peaks and reduce electricity prices. Households and businesses should be rewarded for this service, not penalised for the benefit of big coal,” Mr Buckingham said.

Quote from the Issues Paper where IPART flags a reduction in the solar feed in tariff:

Our preliminary modelling is suggesting that in 2018-19, on average across the day the value of solar exports is around 8-9 cents per kilowatt hour for solar electricity. This is lower than our forecast of the value of solar electricity across the day for 2017-18. The main reason for this is that ASX baseload electricity contract prices are indicating that average prices for wholesale electricity next year will be lower in 2018-19, as substantial new generation capacity is expected to enter the market (mainly large-scale renewables). These suggest average wholesale prices will fall to around 8c/kWh, compared to around 11c/kWh when we published our Final Report last year.

Quote from the Issues Paper where IPART recognises the benefits of solar:

In addition, the increasing penetration of solar electricity in NSW over time has meant that less electricity needs to be produced by power stations in the middle of the day and into the afternoon. Over the years this has contributed to a lower number of price spikes for wholesale electricity over the whole afternoon period when solar is exporting to the grid.

Therefore on average, the difference between the price of wholesale electricity when solar is exporting, compared to the price of wholesale electricity at all other times is reducing.”

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