The Independent Pricing and Regulatory Tribunal (IPART) report recommends a price for the feed-in tariff in the range of 5.2 cents and 10.3 cents per kW hour. It also recommends that IPART should publish an annual benchmark range for the tariff.
IPART Chief Executive Jim Cox says “This benchmark range represents the fair and reasonable value of electricity expected to be exported to the grid by photovoltaic customers during 2011-12.”
The value of this electricity is likely to be higher next year following the introduction of a carbon price.
“This will guide retailers in designing their feed-in tariff offers and will guide customers in assessing these offers,” IPART said in its report.
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The New South Wales Government closed the Solar Bonus Scheme to new participants on 1 July 2011. It then asked IPART to recommend a ‘fair and reasonable’ value for a feed-in tariff for customers who are not in the Solar Bonus Scheme, and also a regulatory or other mechanism by which this value could be implemented in New South Wales.
It also stipulated that the IPART recommendations should not:
- Result in an increase in electricity prices in New South Wales
- Involve funding from the New South Wales Government budget.
Industry response
Upon the release of IPART’s report, the Australian Solar Energy Society (AuSES) said that a fair price for solar is still a long way off. It did, however, praise IPART for addressing this issue, saying its establishment of a price comparison website and a sale price guide for solar households signifies a move in “the right direction”.
AuSES Chief Executive John Grimes says that it provides households with some certainty that their energy retailer should pay them for exports.
“The independent regulator has recommended that electricity retailers should pay for the often free energy they receive from solar system owners, valued at approximately $25 million in 2010-11,” he says.
Clean Energy Council Policy Director Russell Marsh says that the report effectively gives electricity providers a green light to offer less – or even nothing – for people who had installed solar panels.
“The tribunal has set Australia’s lowest minimum price for solar energy sold into the grid, and then added insult to injury by recommending that even that rock bottom minimum should only be paid on a voluntary basis,” Mr Marsh says.
“The industry disagrees with IPART’s assessment and believes that a ‘fair and reasonable’ price is significantly higher than what was recommended. Making the rate voluntary also opens the door to consumers receiving no payment at all,” says Mr Marsh.
IPART will update the benchmark range in June 2012 to reflect the higher value of the electricity from 1 July 2012 resulting from the introduction of the carbon pricing mechanism, under the Federal Government’s Clean Energy Future Package.
IPART recommends that from 1 July 2012, retailers make a contribution to cover some of the costs of the New South Wales Government’s Solar Bonus Scheme. The Tribunal plans to publish a recommended contribution for 2012-13 in June 2012.
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