Qld regions to get just 6.3c/kWh for solar exports

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Queensland regional areas to receive tariff of just 6.3c/kWh for solar exports, providing more incentive for self consumption and storage.

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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.

qca regional FiT

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5 Comments
  1. Stan Hlegeris 6 years ago

    No one looks forward to the death of the coal-fired grid more fervently than I do. That said, the 6.3c feed-in rate seems fair enough.

    The incentive to install solar PV systems is all in the retail price. You can already produce solar electricity for an all-in cost of 6c to 8c per kWh, especially in Queensland. That cost continues to drop. The retail price is more than 30c per kWh, so you have all the incentive you could ever need.

    For the next few years, however, people will expect reliable power from the grid. A feed-in tariff of 6.3c encourages people to use their own electricity at home, but if there’s a surplus at least it won’t go to waste. Nor will non-solar households be cranky about subsidising their smarter neighbours.

    The last few people on the grid will have an unpleasant time of it, and there are plenty of reasons to go off-grid sooner rather than later. In the meantime, I regard the 6.3c tariff as a remarkably even-handed decision from a government otherwise hostile to solar at every turn. Probably a mistake on its part!

    • Chris Drongers 6 years ago

      If I keep setting my watch back twenty years each time I travel between Qld and WA I will soon be back in the dark ages!

      WA’s Horizon Power’s local grid capacity/requirement determined solar FITs for regional areas seem far more logical than the one-value-for-all value for Qld regions recommended above.

      Although Ergon has an enormous grid it also has a large number of diesel driven isolated grids on Cape York and the Gulf of Carpentaria and in the south-west. Good one Qld, lock in paying for truckloads of diesel delivered and stockpiled ahead of the wet each year. Fail Qld.

      WA is having problems with urban consumers subsidizing regional users by about $400M/year and growing. Energy minister Nahan is something of an unknown quantity (it is going to take him years to live down predicting that the Manduarah railway would be a white elephant when it has turned out to be one of THE infrastructure success stories the last fifty years in Australia (whereas Liberal government backed tunnels in Brisbane have been duds)). However, the electricity review currently underway in WA (to replace the one done in 2012 but now hopelessly outdated and undersupported by government for suggesting full price recovery from each user) might find a bettern reception for the same recommendations in November 2014 as the WA government is now the financial equivalent of a starving rat backed into a corner.

      Smaller grids/capita in Victoria and NSW suggest that the FITs there will be less concerned with supporting extensive networks and more about keeping power providers in profit until the governments can shed them. Things like increased environmental management costs at Morwell could be used by renewable energy advocates to press for greater environmental accountability for fossil fuel generators.

  2. Alen 6 years ago

    I honestly fail to see the logic in continuing such large subsidies for years on end with no plan to lessen the burden. Surely investing in distributed generation closer to communities is a financially smarter option? The private Investors and investments this would also bring would go a long way in helping the financial situation the state is in at the moment. Newman promised to find jobs for the workers at the nearly finished Gladstone LNG plants, well theres a good option if you ask me, and best of all it might finally drum into Clive Palmers head that there’s growing decrease demand in coals’ future, and hence it’s illogical to risk ruining the Barrier reef for what are very likely going to be stranded assets.

  3. JohnRD 6 years ago

    I did an analysis of the 2013 QCA report on the Qld FIT. (For part of this analysis see: http://pragmatusj.blogspot.com.au/2013/12/comments-on-qca-report-on-feed-in.html ) Key points from the analysis included:
    1. The report admits that it was only concerned with being fair to the retailers, not rooftop solar PV (RTS) owners, power generation companies or consumers. By implication, the QCA was also committed to defending the payments made to power distributors.
    2. When calculating the “fair” FIT the QCA managed to find excuses for not including most of the savings associated with the use of RTS. This made an enormous difference. If these savings are included, the FIT would have to be above 100 cents/kWh before RTS stopped reducing the power bills of Qld householders who don’t have RTS. The QCA exclusions reduced this figure to a measly 8 cents/kWh.

  4. sean 6 years ago

    $0.06/kwh is heaps, you can still make a profit selling pv at that price, so anyone with a brain and Roofspace would put in a solar system big enough to cope with the biggest use during the day, and make a small profit with the excess.

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