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Solar feed in tariffs jump as community retailer ruffles big boys

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Finally, some good news for solar households. After years of being wound back to the price of coal, solar feed in tariffs are moving up again – at least in some areas – driven by competition by newly established retailers challenging the incumbent big three.

byron bay

Byron Bay-based Enova Energy is to lift its solar feed in tariff to 12c/kWh from January 1, up from 10c/kWh – agreeing to pay more than double the “recommended” tariff in a state that does not mandate a minimum.

The tariff will be available to customers on the Essential Energy network (which is most of New South Wales) and will be welcome news to the 146,000 households about to lose their premium feed in tariffs.

The newly launched Enova – which builds its business model around a community owned, community first, renewable energy focused strategy, is clearly ruffling the big boys, particularly Origin Energy, the previous dominant force in the Northern Rivers.

Origin has already imitated Enova’s previous 10c/kWh solar FiT and its discount for on time payments. And Enova CEO Steve Harris says while imitation is flattery, it is also good for the consumer. Which is why Enova has responded with an even higher tariff.

enova“It just goes to show that even though we are tiny in the overall scale of things we obviously register on their radar,” says Harris. “It also shows we have achieved something for the majority of NSW solar customers.

“Had we not had a much higher and fairer FiT then I suspect the others would have stayed with their lower rates.  Let’s hope all retailers follow suit and do the right thing by their customers,” he told RenewEconomy.

“But also lets hope that customers recognise where this started and continue to support us in our endeavours to speed up the switch from fossil fuels to renewable energy.

“If governments are not going to do anything to support renewables then it is up to the community to take over, and our role is to make it easier and fairer by empowering the community to take action.”

Enova, which earlier this year raised $4 million to begin operations, and finally opened its doors a few months ago, has so far signed up 1,300 customers, round 60 per cent of whom have rooftop solar.

That’s barely a fly-speck for the big retailers – who each boast customers of around 3 million, and “churn” several hundred thousand customers each year.

But there is something about Enova, and its community-focus, that is making the big retailers nervous, particularly in a time when new technologies such as solar and battery storage are witnessing major cost falls and concepts such as sharing energy and peer to peer trading are emerging.

This could redefine and restructure the electricity industry. Instead of relying only on centralised, fossil fuel generation, the grid is likely to quickly transform to one where half of all energy demand is met by locally sourced generation, and rooftop and community owned solar and battery storage will play a key role.

“We would like to own that space,” Harris says, “as a community-owned retailer trying to do the right thing and encourage people to take up solar.”

“There is no question that who we are and what we stand for is a big threat (to the incumbent retailers), Harris says.

“We have found a niche in the market, we are looking at what communities want to do about energy and we are looking  at renewable energy. We are looking at what communities want, not what large energy companies want. Our masters are our customers.

enova-solar-768x421

“We also have responsibility to our shareholders, but being a social enterprise adds another angle to it. If we cannot respond to what community wants, what is the point of existing? There are already 20 retailers out there, we don’t need another one doing exactly the same thing. It has to do the right thing for consumers.”

Solar feed in tariffs in New South Wales are about to become a major issue with some 146,000 households moving off their premium “gross” tariffs of 60c/kWh or 20c/kWh. Another 60,000 to 80,000 households in Victoria and South Australia are also moving off tariffs.

In NSW, the recommended (but not compulsory) tariffs is between 5c and 6c/kWh, about the same price as a coal fired generator gets on average. The fact that rooftop solar is not credited for its environmental, climate and network benefits has been a sore point in the industry.

Recently, the Victorian pricing regulator recommended adding in a climate benefit, but said it could identify no other environmental benefits.

On networks, despite the fact that solar has been shown to shift and narrow peak demand quite dramatically in some states, pricing regulators are focused on protecting network investment, and therefor will only allocate a credit for solar for avoiding future network spending.

 

 

   

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  • Some great news – especially as it is market driven. Much, much better than any kind of government intervention, which always ends up with unintended consequences.

    • disqus_gF5uXVTUbL

      Right wing small government theory with it’s accompanied free market ideology, deregulation and trickle down economics. Often is the green liberal. The new green entrepreneurs.

    • Richard

      Wrong! if we hadn’t made government commitments and subsidies to support renewable energy, by we I mean the advanced world, in an effort to combat climate change, then these technologies would not have been developed or taken off so quickly.

      I think it’s a bit rich for small government theory/neo cons to claim any sort of
      high moral ground on the beginning of the transformation to a low Carbon world.

      Of course now that the left wing/ green intelligentsia has set the agenda.
      We are more than happy for the free market to take over to speed up the fossil fuel kill. 😉

      • Chris Fraser

        Paul meant that long ago, government spending to set up the grid and subsidies for the generation of the time, ie fossil fuels, was such a good wicket that the fossil fuels had trouble getting their snouts out of the trough.

        • Richard

          I agree the private sector has done very well out of a privatized public monopoly.

  • Brad

    I see lots of people complain about the feed in tariffs but my thinking is the lower it is the better it is for the adoption of batteries, if they started giving 20c/ kwh then there would be not point with batteries but if it is 6c then suddenly its worth 4 times as much to keep it onsite which is better for the industry

    • disqus_gF5uXVTUbL

      Agreed, and a battery provides the luxury of the lights staying on regardless of the destiny of the grid amidst increasing possibility of the grid becoming unreliable due to mismanagement. A battery can also be a little more difficult to add later if grid reliability drops temporarily before the grid transitions to being a reliable distributed grid. The problem is ARENA and others chucking up RE without storage, so not enough storage means lack of energy security as the fossil fuel is turned off.

    • Mike Shackleton

      Let’s revisit this when batteries have dropped in price. At the moment I couldn’t justify it here in Victoria, unless I could go totally off grid and save the network charge. Even then it’s a line ball proposition. South Australia is the only state where it really works at the moment. Also, battery storage really comes into its own when we have a higher percentage of our power coming from renewables. At the moment, we get around 10% from solar nationally on a sunny day, another 10 – 15 from wind.

      Also having a better feed in tariff makes you more energy wise – if you can sell it for a good price you are less likely to use it unnecessarily.

      • disqus_gF5uXVTUbL

        A non-technical analyst oriented post. It’s good to work toward an interdisciplinary approach and teamwork. Designing local targeted integrated performance oriented co-located RE / storage will take time and experience. Allot depends on the specific residential, agricultural, commercial or industrial applications and how many buildings and renewable energy generators. It doesn’t all happen shifting numbers on a Page. It’s our countries energy security and basis of our economy.

        • Richard

          It’s fine to be a technical analyst. But the reality is if people do the numbers and if it is cheaper to disconnect then they will disconnect.
          If the network keeps jacking the connection charge to compensate for lost earnings then people will buy a generator.
          Generators are cheap and effective and getting more so.

          The problem I see for technical analysts is that you are flying blind. The pace of development in renewable and battery tech is so great you can’t adapt. The incumbent industries relying on technical analysis are also in the dark.

          Compounding the problem for the incumbents is, lets call it “the democratization of energy”.

          This process is more than just reducing the power bill. It is much bigger than that. It’s about personal empowerment.
          The feeling of beating the system and taking back control.
          Many people recognize the importance of action on climate change. At the moment they see the incumbents hindering and delaying that process.

          All of this feeds into a perfect storm( this topic is pun heaven).
          Where fossil is enemy number one. And every wants to kill it.

          It’s just a shame that at the moment we have a, black hole vacuum, of leadership in Australia called Malcolm Turnbull.

      • Rod

        Totally agree with your second paragraph.
        I’m getting the premium FiT and it has given me the desire to reduce my own consumption and export more. Acquiring tools like meters and scrutinising usage data becomes the norm.
        There will be two distinct types of battery buyers.
        One type will choose a system to load shift and use as much of their PV as they can and stay connected.
        The other type will disconnect and probably have done the hard yards and gotten their usage down to a level where this is possible and the lack of network charge will shorten payback time.

    • wmh

      A hot water tank can store 50 kWh in a cubic meter when heated to 90C and used down to 45C. This is less than the energy storage density of Lithium batteries but it is way cheaper, particularly if you already have the electric hot water tank.
      Battery energy storage systems are in the news but notice how the owners of these systems tend to use another form of energy, such as wood fires or gas, for heating. The reason is that water and space heating uses 60% of the average home energy bill (Ausgrid figures). In the depths of winter, space heating uses perhaps 20 to 50 kWh per day, even with insulation, much more energy than can be economically provided from even Powerwall 2 at $680/kWh and with hot water storage you are just paying for the tank.

      • john

        I will check out your $680 KWh price tomorrow, and get back to you about that.

      • Ian

        You would think people would install hydronic heating using either ground source or ordinary air source heat pumps or solar water heaters and hot water storage for winter heating. That and a well insulated house should cost next to nothing to run.

        • wmh

          You can’t get a great deal of heat out of dirt or rock when the specific heat is only about 0.8 (water is 4.18). Apparently heat pump manufacturers don’t warrant their heat pumps for hydronic heating use as the load imposed is too large. Solar thermal water heaters were a good idea once but these days they are more expensive than PV and, if something goes wrong, you have to climb on the roof to fix it. I agree about the well insulated house!

          • Richard

            We have an evacuated tube solar hot water system combined with 300l tank and instant gas hot water. It made a dramatic improvement to our bills when we came off the electric kettle in the roof.
            With subsidies on instal it cost about 5k 8 years ago. Since then it has cost about 1k for maintenance, I can see it having ongoing issues. We are at a break even point right now.

            I agree. These days, if you have the room for extra panels it would be better to just go PV and ditch the solar water heater.

            In fact disconnecting from gas would be a good idea too. It’s getting pricey.

          • solarguy

            If your going to heat water with PV, then a good efficient heat pump is the only way to go, you would think? But NO it isn’t and here is why!
            A heat pump with an 1kw compressor will require at least 1.5kw of extra PV above what PV you need to run other loads and on iffy days will bite into the power output of the rest of the array you have, clearly less power available for the other loads, you then have the situation where you will draw power from the grid, umm!
            Secondly, the PV needed for the h/p will take up more valuable area on your roof than a ET SHW collector, which will get the job done for free. One can have an Edson ET system installed for $4.4k. This system will supply enough hot water for up to 4 people for free, 90 + % of the year and comes with a 15/20yr warranty on major parts. H/p’s warranty on compressor is no more than 3yrs and when they go tits up the replacement cost is horrendous.
            Cost of H/P, close to $4k + extra 1.5kw PV $1.8k + grid running costs on those iffy winter days.
            On space heating though a good efficient Inverter AC ( heat pump) run by PV has no rivals though and it can cool you in summer, a better investment than hydronic heating.

          • disqus_gF5uXVTUbL

            Thanks that’s very clear. And the Evacuated Tube Solar Hot Water system doesn’t eat into the peak power output of the PV inverter making it last longer and the ET SHW has no moving parts, hence the 15/20yr warrantee. What sort of ET SHW would you recommend for a granny flat for one or two people and do you happen to have a price?

          • solarguy

            An Edson ES-250-SHC20 (250lt stainless tank & 20 tube collector) I sell them for $4,400 AR installed, for straight forward installs. The only moving part is the 28watt circ pump.

          • Brad

            I work in domestic engineering and no one ever bothers with it in the end. They start off wanting it then get slab prices and cancel the idea as another 20k on the build price gets you a lot of solar panels to run a heat pump

          • solarguy

            Sorry Brad that statement doesn’t make sense.

          • Brad

            I probable could have added hydronic heating into my comment 🙂 which is what I was talking about. I think its a good idea and is efficient in a waffle pod slab or similar insulated slab but the extra labour to put it in under the slab mesh and make the slab thicker just becomes cost prohibitive when everyone is already building to the top of there budgets and no one ever want to compromise by making the house smaller

          • solarguy

            Now that makes perfect sense, I agree.

          • wmh

            A heated floor is really luxurious – if you can afford the extra $20k.

          • wmh

            Agreed that an AC unit run from PV will cool the house down in summer. The combination of the house thermal mass and reduced night time temperature differential will probably keep it cool over night.
            However in winter, the temperature differential widens at night and on days when the sun doesn’t shine, where does the energy to run the AC heating come from if you don’t have energy storage? East Coast Lows can last several days.

          • solarguy

            The grid, if off grid and the batteries become exhausted, then a genset.

          • Richard

            Ok. I friend bought a heat pump and his electricity bill went through the roof.
            Our system is an early Edson ET the roof tank seam welds failed and the controller failed. We also had trouble with pipes.
            The controller wasn’t covered by warranty.
            Maybe the newer systems are better.

          • solarguy

            Sorry to hear that your tank failed, most likely not a stainless. Controller failure is about 3% in my 9yrs experience, usually due to power surge in storms. Warranty won’t cover that cause. Only stainless tanks have been used for the last 3yrs and yes their much better.
            Many of my customers couldn’t wait to get rid of their heat pumps.

          • Richard

            Yes it was a power surge .

          • solarguy

            A surge arrester can stop that happening. Fitted on all circuits in the switch board or just at the power point.

          • Richard

            I think it should have been part of the instal. I wasn’t told I needed it. Probably not the manufacturers fault. But worth making people aware of.

          • solarguy

            When you think about it every appliance should then come with a surge arrester in that case, but they don’t. Any appliance can damaged by power surge. Bye the way that recommendation is in the controller manual.

            If it was the networks fault you have a claim against them or you could try claiming on insurance.

          • jeffhre

            If you had waited, would it be possible to plumb the solar HW to preheat water for the kettle – and power it too, at some point mainly with PV?

          • Richard

            Interesting question, I hadn’t thought if it. As part of the deal with the government subsidy at the time the electric tank in the roof was decommissioned(holes drilled in it). It was pretty old tank anyway.
            At some point we could take out the instant gas and replace with electric. But at the moment we only have a 1kw PV system. We would have to upgrade that too to make it worthwhile.

        • Richard

          Umm..! The cost of installing that stuff is high. The cost to run
          also includes the capital cost of instal.
          I would like to see the numbers.

      • Richard

        $680/kwh!?.. You just self shot your argument with both barrel’s

        • wmh

          The $680/kWh figure comes from a recent RenewEconomy article. I haven’t bought any Powerwalls because 50kWh would cost me $34,000. Water costs $2 per 1000 litres and the unpressurised tank could be home made. The wall radiators and plumbing I count as part of a central heating system which otherwise would be run from a gas boiler.

          • Richard

            Ok you are talking capital cost. I thought you were talking cost electricity, my mistake!

      • jeffhre

        Wow! How cold are your winters?

        We got down to 6 degrees C. last night, and with a warm day plus baking some chicken, I only ran the pilot light on the space heater – 50kWh?

        • wmh

          My winters are about as cold as yours. My house warms up on a sunny day also. My heat storage is calculated to ride through a couple of days of rainy cold weather, providing central heating to the entire house.

          • jeffhre

            We are enjoying a mild spell.

      • Greg Hudson

        Ah, but a cubic meter of water is 1000 liters. How many hot water heaters have you ever seen that are that size? My guess…. NONE!

        • wmh

          My suggestion is to have two separate systems. The first would be a standard mains pressure electric tank to supply a standard mains pressure domestic hot water system. Such systems already require a tempering valve to run cooler 50 C water to the bathroom while supplying hotter 60 C water to the kitchen sink and laundry. Such a system would be powered from suitably sized PV panels via a variable output voltage inverter, a diverter or just a simple time switch. This is the cheapest form of PV energy storage for those who already have an electric hot water service.

          The second system would be central heating involving an unpressurised tank, wall radiators and small pump. Here also a tempering valve would control the water temperature to the wall radiators.

          Being unpressurised, this tank could be home made or perhaps a commercial unit. Edson make a 1000L, roof mounted gravity feed type. Of course you need somewhere to put it. Smaller tanks could be coupled together.

          • Greg Hudson

            I don’t know what everyone else thinks, but there’s no way I would be putting a 1000Kg (2,200 pound) tank on my roof! I like the general idea of the storage though, especially the central heating.

          • Alastair Leith

            So find somewhere that isn’t on your roof… or reinforce the corner walls and put it up there. I have a legacy gravity feed but don’t see why anyone would want one these days.

    • Alastair Leith

      The adoption of batteries at a higher embodied energy and energy-unit cost that grid scale thermal and gravity storage is not necessarily something *to be* encouraged. Sure it might erode the big three dominance of electricity retailing and wholesale purchasing, but so might energy trading and higher rooftopPV FiTs.

  • disqus_gF5uXVTUbL

    The biggest technical issue with a potentially distributed grid, often overlooked by analyst’s focused on universal themes, is the need for distributed generation matched with distributed storage for the specific target population/site. It won’t work well making NSW rely on the snowy hydro at the bottom of the state. With adequate storage for real reliability, there will then only need to be a grid with thin links between population centres on our vast continent. These thin links will merely be for weather and seasonal variations, not attempting to source massive power shortfalls by mainly relying upon centralised storage with distributed generation.

    • Richard

      Surely the transition to renewable s in Australia is going to be quick once the battery situation is sorted out. That looks like only a few years away now.
      Then the transformation will be full on

      The politics is just ridiculous. They don’t have to do anything it will just happen anyway.

      We are so blessed with renewable resources it will be easy for us.

      • disqus_gF5uXVTUbL

        As you highlighted below, the small government neo cons will jump into solar and the left wing green intelligentsia has set the agenda. It will be relatively easy for all those people. Although wealth distribution data for our country shows the poorest 40% of Australians won’t have any money to invest in RE.

        “At the other end of the range, the poorest 40% of households have virtually no share in the nation’s wealth. The bottom 20% effectively have negative net worth. For 40 per cent of households, inequality is increasing absolutely.”
        http://evatt.org.au/news/wealth-nation.html

  • Ian

    One would assume Enova has costed out this FiT and found it economically viable. Do they have a limitation on the quantity and time of exports? For example would they allow 30KW of export at 8pm ?

    • Greg Hudson

      If you look at the AEMO dashboard, see:
      https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
      you can see for yourself when the best times to export are. All you need then is some software that can automate the process (and I’m not thinking Reposit). Ideally, a community owned retailer should also be able to ‘buy’ power at the low rates as well (generally 4.5c/kWh or less) at specific times, and use that to fill your batteries. When the price goes UP, start dumping back into the grid, just like the gas fired peakers are doing in SA.

  • solarguy

    These companies offering FIT of 10 & 12cents/kwh have SAC fees of up to $1.60/day though! Do the math before signing up.

    • Richard

      Also pay on time discounts can be 30% with some companies

  • As Brad points out, a higher export tariff will actually make storage less economical because the price difference between exporting it and storing it and using it for peak periods would be lower.

    Batteries have dropped in price. They are now cheaper than the average grid price with discounts in SA. https://sustergy.co/2016/12/20/teslas-price-shock-solar-battery-as-cheap-as-grid-power-renew-economy/

    In addition to solar and storage, local electricity trading will also help to make energy supply more economical. Read, sign and share this petition to change the national electricity objective (NEO) to consider environmental impact and reconsider the change request to allow Local Generation Network Credits or otherwise facilitate local electricity trading.

    https://secure.avaaz.org/en/petition/The_AEMC_Reconsider_the_change_request_for_local_electricity_trading/edit