Baillieu govt slashes Victoria’s solar PV tariff

Victoria’s Coalition government has announced it is cutting the state’s solar feed-in tariff from 25 cents per kilowatt-hour to just 8c/kWh – approximately one third the current retail rate for electricity in Victoria.

The Baillieu government’s energy minister, Michael O’Brien, announced the cut – effective January 1, 2013 – on Monday afternoon, following the lead of Liberal Queensland Premier Campbell Newman, who cut his state’s solar FiT to 8c/kWh on July 1 this year.

The cut was announced as part of the government’s decision to broaden the solar feed-in tariff to include all low-emissions and renewable technologies of less than 100kW – including low emissions generators like fuel cells.

From the beginning of next year, the new tariff will initially provide a minimum of 8c/kWh of electricity exported to the grid. The rate will then be updated each year in line with the adjusted wholesale electricity rate.

Describing it as a backwards step, green group Environment Victoria said that the state’s households and small businesses would be worse off under the move, which it said was at odds with the Premier’s key election promises.

“Ted Baillieu has dumped his promise to support the Mallee solar farm, he’s made it harder to build a wind farm than a new coal-fired power station, and now he’s slashed household and business solar support. At the same time he’s handing out tens of millions in cash to the big coal companies,” said  Victoria McKenzie-McHarg, Safe Climate Campaigner at Environment Victoria.

“It’s fair to ask what this government has against clean energy?” she said.

“Slashing support for solar breaks a key election promise that the Coalition government would strongly support feed-in tariffs that provide a fair reward for households willing to invest in solar energy.

“Victorians love solar power, and families have been willing to fork out their own money to help our environment and take control of their energy bills. But now with this decision from the Baillieu Government, from 2013 households who invest in solar power will actually be subsidising the rest of the market,” she said.

Environment Victoria said the change to Victoria’s solar FiT also jeopardised the state government’s promise to generate 5 per cent of the state’s electricity from solar power by 2020.

“In Opposition the Coalition actually worked with environment groups to improve Victoria’s solar feed-in tariff. Now in government they are breaking promises and have destroyed the feed-in tariff as a means of encouraging solar uptake,” McKenzie-McHarg said.

ASX-listed Ceramic Fuel Cells has welcomed the broadening of the tariff to include technologies like its BlueGen gas to electricity generators, which are already eligible to receive feed-in tariffs in Germany and the UK – although both of these markets have recently announced increases to their feed-in tariffs.

The tariff in Germany is equivalent to approximately 14 Australian cents per kilowatt hour, while the total tariff in the UK is up to around 26 Australian cents per kilowatt hour.