QCA lifts solar feed in tariff after RenewEconomy points out error

The Queensland Competition Authority is to revise its proposed feed in tariff affecting more than 30,000 solar households in the Ergon Energy network after conceding errors in its calculations pointed out by RenewEconomy on Monday.

RenewEconomy questioned why the QCA had decided to change its tariff from 6.53c/kWh to 6.03c/kWh. The QCA justified it on the basis of lower network losses. That could be valid, but in this case, the reduction of network losses, as RenewEconomy pointed out, simply hadn’t occurred to the extent claimed.

QCA chairman Malcolm Roberts rang RenewEconomy on Tuesday to say that there had been an “embarrassing” error in calculations. The feed in tariff would be revised to 6.348c/kWh. It will be formally announced later on Tuesday.

“It was  surprising to me that we might have got it wrong,” Roberts said. “To the extent that you helped identify the error, I would like to thank you.”

The tariff will still be lower than last year’s tariff, despite an increase in the wholesale price component.

As RenewEconomy pointed out, the cutting of the tariffs due to reduced network losses is ironic because it is distributed energy, including solar, which is helping reduce those losses, which often run at 10, and up to 15 per cent, according to the length of the network.

Still, RenewEconomy is glad it has helped save consumers money.

Ergon has 106,000 solar households in its network, with close to 400MW of capacity. Most are on the premium feed in tariffs which will be unchanged until 2029 (unless Ergon buys them out).

However, more than 30,000 households get the FiT set annually by the QCA. Based on their estimated capacity of 120MW on those homes each year, if they exported between half and two thirds of that output back to the grid, that is a saving of nearly $500,000 for those households.

Addendum: QCA later confirmed the revised tariffs and the proposed 6.348c/kWh.

Roberts said in a statement: “The QCA mistakenly used the wrong energy loss factor when calculating the new rate for 2015-16. When buying energy from household solar systems, retailers avoid paying for energy lost over the transmission and distribution system – the QCA believes the price retailers pay for solar energy should include that saving.

“Unfortunately, the tariff rate announced on Friday by the QCA applied the wrong loss factor, relating to larger business customers.

“This error was detected after queries from the editor of Renew Economy.”