The Queensland pricing regulator has recommended a feed-in-tariff for household rooftop systems of just 6.31c/kWh for electricity exported back into the grid from homes in regional Queensland.
The new tariff was published on the Queensland Competition Authority website late last week. It follows an announcement earlier this month that the 8c/kWh FiT paid to households in south-east Queensland be removed at the end of the current financial year and replaced with a “voluntary” payment system.
However, because there is effectively only one retailer in remote parts of Queensland – the state owned Ergon Energy – the QCA recommended that a minimum tariff be set.
According to its calculations, the figure should only represent the estimated wholesale price of electricity, plus ancillary fees and the value of transmission losses. It says all other costs are unavoidable. The estimate includes no calculation of the potential benefits of rooftop solar, such as reducing peaks and avoiding or delaying infrastructure upgrades.
The QCA says that if the carbon price remains, the FiT should be 8.784c/kWh, but this should reduce to 6.321c/kWh in the carbon price is removed. (Wholesale electricity prices are expected to fall if the carbon price is removed).
The QCA approach is different to that of Horizon Energy in Western Australia, which has recommended tariffs of up to 50c/kWh in some towns in remote and fringe of grid areas because of the benefits that solar can bring. It has recently tendered for large battery storage systems to reduce the dependence of some towns on the grid.
Electricity consumption in regional Queensland is heavily subsidised by the government ($600 million a year) because of the cost of delivery to remote areas. Indeed, Ergon Energy said last year that within a decade, it may be cheaper for households to generate and store their own electricity using solar and battery storage, rather than using the grid.
The QCA ruling would appear to simply provide an extra incentive for solar households to consume a maximum of their rooftop solar system on site, and to potentially add storage.