While better than a proverbial ‘poke in the eye with a sharp stick’, IPART’s idea of a fair and reasonable price for solar electricity generated by households not covered by NSW’s previous Solar Bonus Scheme may be vigorously contested.
The Independent Pricing and Regulatory Tribunal’s final recommendation for the 2011/12 financial year is that a fair and reasonable value for surplus solar electricity exported to the mains grid is in the range of 5.2 to 10.3 cents per kilowatt hour (c/kWh).
IPART says to set the feed in tariff any higher than 10.3 cents would require electricity retailers to receive funding from the Government or increase their prices for other electricity customers.
Many in New South Wales’ solar industry pushed for a 1:1 feed in tariff – a payment equal to the full retail price. IPART CEO Jim Cox says while the body considered the proposal, retailers incur costs in supplying PV-generated electricity to other customers and these costs need to be factored in.
Another recommendation to likely stir up debate is IPART’s annual benchmark range being a guide, rather than mandatory. IPART believes if solar households are aware of the benchmark range, they will be more likely to shop around to attract the “fair and reasonable” value for their electricity exports, creating competition among retailers.
NSW Greens MP John Kaye says IPART’s recommended price range will see the state’s solar industry having little hope of surviving the next few years.
While IPART’s idea of “fair and reasonable” may be considered quite unfair and unreasonable, and even under the current circumstances of no feed in tariff being available, NSW households seeking to rein in rapidly increasing electricity bills have been continuing to install solar panels.
Uptake in the state is also expected to increase over the next couple of months due to the looming Solar Credits rebate reduction. Households wanting to take advantage of the current rebate level, which will be slashed by 33% from July, will need to have systems installed by June 30.
According to information from Energy Matters, a good quality entry level 1.5kW solar power system installed in Sydney can slash a household’s annual power bill by an estimated $520 – and that figure is without including the benefit of IPART’s recommended feed in tariff.
IPART will not be releasing a 2012/13 estimate until June 2012, however the body has flagged the value will increase when the new carbon pricing mechanism is introduced in July.