South Australia Solar Feed In Tariff Threatened

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Households and businesses in South Australia considering installing solar panels may want to do so soon.

The Essential Services Commission of South Australia (ESCoSA) has proposed that from 1 July 2014, the amount paid to South Australian owners of solar power systems for surplus electricity exported to the mains grid by electricity retailers should be slashed from 11.2 cents down to 9.8 cents.

Households joining the feed in tariff program also receive an additional 16c until 30 September 2016.

Under current arrangements and according to information from solar systems provider Energy Matters, a 5kW solar panel system installed in Adelaide can provide a financial benefit exceeding $2,000 a year.

The CEC says ESCoSA has “used the narrowest definition of a feed-in tariff, based on the financial benefit that a solar PV owner provides to his or her electricity retailer.”

ESCoSA has listed the benefits solar PV provides to the electricity market as being wholesale electricity lowered due to a reduction in electricity demand and flattening of the Net System Load Profile, reduced line loss factors and lower costs to retailers due to avoided contracting and risk management costs.

However, some of these benefits have not been factored into its price recommendation. The CEC also says the term ‘fair and reasonable’ value should be “interpreted as a subsidy-free value that reflects the benefits of electricity generated from small-scale PV generators to electricity retailers and to other parties”, not just electricity retailers.

Among the concerns expressed by the Clean Energy Council with regard to the proposal is ESCoSA ” has made no attempt to quantify the economic benefits of solar PV arising from the reduced need for network investment and nor has it considered how solar PV owners could be rewarded for this benefit.”

ESCoSA has invited public submissions to its draft determination and a copy of CEC’s submission can be viewed here (PDF).