State of Play for NSW domestic solar power…….
The New South Wales pricing regulator has slashed the value of solar feed-in tariffs in the state in what appears to be a deliberate move to push consumers to adopt battery storage, and to lock in long-term deals with major retailers.
The Independent Pricing and Regulatory Tribunal (IPART) on Monday announced in a draft determination that the recommended average tariff – which is voluntary anyway for electricity retailers in NSW – had been cut by 14 per cent to an average 4.8c/kWh, the lowest in Australia.
The move will affect the more than 3,000 homes that add rooftop solar in NSW each month, and gives some indication of the tariffs awaiting the 160,000 homes on premium feed-in tariffs when those tariffs come to an end at the end of 2016.
IPART justified the cut – from an average 5.6c/kWh in the past year – on the basis that wholesale electricity prices had fallen because of a decline in expensive peak pricing events.
One of the principal reasons for this fall in wholesale prices is the proliferation of rooftop solar PV. IPART says solar PV has helped reduce the number of daytime peak pricing events in NSW and helped lower the average level of peak demand by 8 per cent….
But while solar households are having their tariffs cut because of falling wholesale prices, there is no sign that lower wholesale prices have been passed on to the general consumer. Retailers simply increase their margins on the “retail” component of the business to offset the lower revenue they get from their coal plant and other generators. All major retailers have increased their margins significantly in the past year.
Thousands of Australians will be hit by electricity bill shock of about $1,500 when generous solar feed-in tariffs are rolled back in coming months, consumer advocates have warned.
The tariffs were introduced for a set period to kickstart Australia's uptake of rooftop solar by offering money to solar users who fed energy back into the grid.
More than 275,000 households will be affected when the tariffs are unwound from September to January in New South Wales, South Australia and Victoria.
In NSW, the tariff will be wound back from 60 cents for all solar generation to 5.5-7.2 cents per kilowatt hour.
In Victoria, consumers who were paid 25 cents per kilowatt hour for excess solar fed into the grid will have that reduced to five cents and in South Australia the 16 cent tariff will fall to 6.8 cents.
The current NSW 60 cents tariff for all solar generation - 20 cents feed-in tariff (FiT) - gives a discount of est. 7 per cent on domestic electricity costs.
Current solar FiTs are ending for 275,902 households in New South Wales, South Australia and Victoria.
The change occurs for households with FiT contracts which commenced in :
2011 (standard tariff) South Australia the change occurs on 30 September 2016 – new minimum tariff 6.8 cents per kWh;
2010 (“Solar Scheme Tariff”) New South Wales the change occurs on 31 December 2016 – up to retailer to decide the offer which is unlikely to exceed 5 cents kWh ; and
2011 (transitional tariff) & 2012 (standard tariff) Victoria the change occurs on 31 December 2016 - new tariff 5 cents per kWh. “Premium FiT” contracts do not expire until 2024.
According to the Independent Pricing And Regulatory Tribunal an average two-person household in NSW uses approximately 1,400 kWh of electricity per quarter (90 days) or 15.55kWh per day.
If a North Coast residence is lucky enough to receive a full 6 hours of sunlight daily on its rooftop solar panel and has installed a 3.0kw or 4.0 kw model it could produce between 11.7 to 16.8kWh of electricity per day.
Even the most basic maths indicates that from 1 January 2017 for many of these coastal households the dollar margin between output and consumption will fall and at the end of each billing period there will be less income to compensate for their actual energy use plus the usual energy retailer’s service fees and charges.
As both the Baird and Turnbull governments appear to be captives of the coal and gas industries, 2017 is going to be a year of unexpected adjustment for many of those older residents in the Northern Rivers who fondly imagined that they were future proofing their retirement by entering solar feed-in tariff schemes in 2010.
