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IPART bumps up benchmark range for NSW solar tariffs

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The NSW pricing regulator IPART has further lifted its recommended benchmark range for solar feed-in tariffs for 2017/18, now suggesting a range of 11.9c/kWh to 15c/kWh for exports back into the grid from the state’s 350,000 solar households. The payment range is voluntary.

This is slightly higher than its draft range released in May of 11.6c/kWh to 14.6/kWh, but substantially higher than last year’s benchmark range of 5.5c/kWh to 7.2 c/kWh thanks to the huge jump in wholesale electricity prices following the rise of gas prices, and unchecked market manipulation by some of the major players.

The benchmark is a guide only, and comes with an 18-20 per cent jump in retail electricity prices also caused by the jump in wholesale electricity costs.

AGL has already announced its new solar feed in tariff to come into effect from July 1, but it comes in below this benchmark range, and the draft range too, at 11.1c/kWh.

IPART noted that many submissions – from some 1,400 households, many of whom had been on the previous 60c/kWh gross tariff – had argued that the tariff should be higher, taking into account environmental benefits and profits made by retailers on the sale of this electricity.

This was echoed by Greens spokesman Jeremy Buckingham.

“The Greens welcome the increase in the price paid for rooftop solar in NSW, but will continue to move for IPART to factor in an implicit carbon price and avoided health costs, to recognise the true benefit of solar power and increase the tariff to reflect those benefits, as they do in Victoria.

He said this would lift the tariff by a further 4.3c/kWh.

“Households and the economy are now being punished for three catastrophic policy failures,” he said in a statement.

“The unregulated move into LNG exports; the privatisation and deregulation of the energy sector; and the failure to have a serious policy for the transition of the energy sector to renewable energy.”

But IPART rejected these ideas, saying that solar households already received an upfront subsidy, retailers would make a loss if forced to pay retail rates for the exports, and saying it was unfair to pass on environmental costs on to households that could not install solar.

“If retailers were required to pay 1-for-1 solar feed-in tariffs, they would make a substantial loss on solar customers,” it says, noting that network costs were still payable. (Ed: Well, maybe that rule should be changed).

IPART also said it could see no network benefits of solar PV, even though grid operators across the country have explained how rooftop solar has helped to narrow and shift the peak, and the NSW government has outlined how solar helped to keep the lights on in the recent heat-wave when fossil fuel generators failed.

IPART attempted to deflect the blame on this to the Australian Energy Market Commission (AEMC), which it said had rejected a requested rule change to introduce a new mechanism that would allow small-scale embedded generators to earn revenue for network benefits.

The AEMC, it said, could not find any benefits.

“The analysis also showed solar PV combined with batteries had a limited additional effect on deferring network investment, and that the benefit is still outweighed by the cost,” IPART noted.

And it went on: “We have not included a value for network benefits in our benchmark range for two reasons. First, we do not have sufficient evidence that solar exports provide a net benefit to the electricity network.

“Second, if there was a net benefit, in the absence of any mechanism for a retailer to claim this benefit from a network business, including this value in solar feed-in tariffs would increase electricity prices for all customers.”

In other words, there might be a benefit but we haven’t looked and if there was a benefit the rules are such that we couldn’t figure out how to pass it on.

Most independent analysts would call this out as bollocks and a pathetic attempt to justify the out-dated rules that govern the archaic energy system and favour incumbents. Little wonder that the Finkel Review focused so heavily on governance.

  

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  • Ruben

    Diamond Energy is 12c/kWh and AGL is 11.1c/kWh. What other updated FITs do we have?

    • Joe

      Ruben, I live in Sydney and Energy Australia is my retailer. They have just advised my FiT is going up from currently 6.0 cents to 12.5cents.

      • solarguy

        I’m an EA customer too. 12.5cents is better than a kick in the tits, but watch the SAC charge go up though.

        • Rod

          Yes, AGL in SA just raised their FiT to 16 cents.
          But the daily supply charge increased by 25% It was about 76c from memory. Now 96c
          And they have also snuck in Monthly total tiers. Won’t affect me but big users are in for a shock.

          • solarguy

            Ah the bastards! Their not content paying us the same as they pay for the wholesale price, but hey I knew it would happen. BTW what are monthly tiers?

          • Rod

            A sliding scale depending on your total use. Never seen that before other than for water.
            https://uploads.disquscdn.com/images/c5e12c01782c462f66890ac1c7e3e161ea7306fd1912b5502d4019f8d8456d1e.jpg

          • solarguy

            F%$#ing outrageous, time for more PV and battery old son. Can you deal?

          • Rod

            I’m on PFiT so just adding more PV is out.
            However a stand alone storage and UPS system is looking more and more attractive. We average 4kWh usage per day for 3 seasons so realistically still a bit too expensive to make financial sense.

          • solarguy

            Ok, is that 4kwh including your PV generation offset or are you gross metered?

          • Rod

            Net metered.
            The 4 kWh is calculated using the import export meter and inverter stats. Between 1.5 and 2 kWh imported during sunny Months. Most of that would be the evening and the damn fridge,

          • solarguy

            Turn that bloody energy sucking fridge off mate and use an Esky, it’s clearly using to much LOL.

            Seriously though, if your only importing 4kwh a day, your PV is off setting a high proportion of your energy use. Good going.

            We import SFA most of the time because of our hybrid system. In fact we export a lot and I could go off grid if needed.

          • Rod

            Wish I could turn it off but warm beer sucks. 2 kWh/day in Summer and about 1 kWh/day the rest of the year. So a fair proportion of our total usage.
            A newish Samsung 220 litre unit would probably halve this but might not please SWMBO

            Yes, we export much more than we import but still need the grid for export dollars.
            The stand alone system would be more about “sticking it to the man” but would need to make financial sense too.

  • wmh

    This summer we should all turn off our grid connected inverters on the hottest day and see whether our solar power is valued or not.

    • Goldie444

      If I lived in NSW, I would do this, perhaps at a certain hour in the early part of the afternoon on a nominated day.

      • wmh

        Possibly reserve a coordinated simultaneous disconnection for the day after. Sure to get their attention.

        • Brian Tehan

          Yes, it would have to be coordinated, otherwise it would be have no effect. Depends on what your FIT turns out to be, I guess. It seems to me that, by raising the FIT to a reasonable level, they’re actually admitting that pv does have significant value, despite the text.

    • daw

      Better still wmh have the grid owners disconnect your house from the grid asap. Save the exorbitant daily charge and become self sufficient. Suggest that while they are there have them remove the meter/s and that ugly service line coming onto the house It also removes the safety risks associated with it – electric shock, lightning strikes that could damage electrical/electronic equipment or start a fire. Let us know the outcome.

    • solarguy

      Yep, a good idea, if it can be coordinated. I wouldn’t loose my aircon as I have a hybrid system, just have to switch the grid breaker off and everything still works.

      It could be arranged for a 1 hour solar blackout, say 6pm – 7pm AEST, that should give them the good news.