To the hundreds of Tasmanian households who have installed rooftop solar power systems please take note. The (approx) 23 cents per kwh feed-in tariff that you currently receive for surplus power delivered into the grid may be very short lived.
This week’s shock decision by the Victorian Balleau government to slash the feed-in tariff to 8 cents per kwh (see http://www.dpi.vic.gov.au/energy/environment-and-community/feed-in-tariffs ) has implications for Tasmanian power consumers, particularly because the feed-in tariff rate that is received for solar power here is not underpinned by any long term contractual guarantee – partly because Aurora is a state-owned instrumentality.
To complicate matters further, as the Tasmanian government is rapidly shifting to the privatization of electricity retailing in Tasmania the three commercial bodies that will take over from Aurora will need to offer a mandated feed-in solar tariff that is fixed to a price and term contract – and what will those be?
Many Tasmanian households have invested in solar systems on a purely ethical basis, because they believe that supporting renewable energy is the right thing to do. Many others have done so having calculated the length of time that the equipment may pay for itself. Those that have bought fairly large (3kw) systems have done so on the basis that most of the daytime solar power is fed back into the grid and thus provides them a steady return on their investment.
Quite a number of Tasmanian schools and sporting institutions have installed quite large systems (6kw) calculating that the surplus power produced on week-ends and school holidays will feed straight into the grid and help to reduce their overall power bills.
Tasmania’s current feed-in tariff is not overly generous and reflects real advantage to the supplier. Currently, small scale electricity generators are awarded a one-for-one tariff rate, meaning that any power that goes into the grid is priced at the same rate as power that is bought on normal tariff. This is not an overly generous payback tariff since distributed power, like roof top solar, reduces the load on the expensive ‘poles and wires’ distribution system (which is stretched to capacity in some areas) thus reducing costs to the electricity supplier, Aurora.
So what will happen to the solar feed-in tariff when electricity retailing is privatized? Anybody’s guess, but we can take a cue from what has happened recently in other states. Incoming Victorian, NSW and Queensland state government has been busy dismantling many of their renewable energy and carbon abatement policies on the grounds that the national carbon pricing regime now deals with those issues centrally and so, it is being argued, there is no need for tandem state government measures as well. (The begging question is: what happens if an incoming federal government dismantles the federal carbon framework?)
Then there is the claim by renewables campaigners that solar costs have now plummeted so low that solar energy is competitive, price for price, with coal-based power. This claim is being perversely interpreted by political decision makers as a signal that renewable energy has come of age and, now being commercially competitive, there is no longer any need to provide incentives to encourage it.
Regardless of the arguments for and against, it will be in the interests of anyone owning a solar rooftop system to politely inquire of the state government what it intends to do in relation to the solar feed-in tariff as a consequence of the electricity restructuring that is on our doorstep. For those who have purchased their system on the basis of a payback period, it is worth noting that a really low feed-in tariff will probably extend the payback period to beyond the 30-year life expectancy of their solar system, so this is a legitimate economic issue for some.
For those other passionate souls who are dreaming of Tasmania being 100 percent renewable energy state, it’s a relevant issue also.
What does this mean, money wise, for the average solararised household?
If your home that has a small (1 kw) system on the roof then during the day this power feeds into any appliances in the home that are turned on at that time of day, be it your fridge or space heater. Any un-used solar power is fed into the grid and for that you receive the feed-in tariff rate and this is recorded on your power bill as credit. This typically amounts to about half of the power that is produced by your solar system.
For anyone with a large solar system (3kw) on their roof, if their domestic needs are fairly frugal, some 90 percent of this solar generated power may be fed into the grid whilst the sun is shining. If the feed-in tariff is reduced to, say, the new Victorian tariff of 8 cents this means that what you feed into the grid at 8 cents you later import from the grid at a cost of approx 23 cents, so you are forking out to the retailer the difference (15 cents) to buy back each kwh of the power that you have produced yourself.
Chris is a member of the Tasmania Climate Action Council
• John Thirgood: Power to the people
Regarding the article “Talks over wind farm” (The Sunday Examiner, September 2), I submit that Tasmanians would be better served with individual rooftop solar solutions, and believe that setting up an accessible loan scheme for residents buying their own equipment would be of far greater benefit to Tasmanians and the government as a first strategy choice.
The availability of a finance package at even 8 per cent per annum over 10 years would see the loan repaid in full, while typically monthly repayments would be lower than the power bill from year one.
Such a solution would make it a superior option against paying ever-increasing power costs for all Tasmanians – particularly for pensioners and low-income earners, who are among those most affected by power price rises and least able to source funding.
If the government or opposition implemented an appropriate loan policy enabling households to install an energy-efficient way to generate their own electricity through rooftop solar power, then it would be beneficial for Tasmanians’ hip pockets as well as reducing the public’s costs of government involvement in major projects, as we would simply be buying our own equipment instead.
This would surely be a long-term vote-winner for that party – another ”Electric Eric” situation.
And of course, the Basslink cable would allow us to sell any excess electricity back to the mainland at premium rates – surely a plus during the summer months, when both solar electricity generation and mainland demand would be at its peak. It’s a win-win situation.
John Thirgood
Managing Director
Jessups
139 York street
launceston 7250
Facebook: SolarSquadJessups
www.solarsquad.com.au www.slashyourpowerbill.com.au
