Queensland rejects battery swap, but restricts use of storage with premium tariffs

One Step Off The Grid

The Queensland government has decided against a proposed voluntary “buy out” of the remaining 10 years of premium solar feed in tariffs in exchange for battery storage, but has announced new rules to prevent those premium tariff households from using batteries to rort the system.

A voluntary swap of premium solar tariffs, which run at a generous 44c/kWh until 2028, with battery storage had been floated initially by Ergon Energy in 2014 as a way to encourage battery storage in a state with high levels of rooftop solar penetration and growing network issues.

It was a proposal that found widespread support among the battery storage industry and the solar industry.

The Queensland Productivity Commission last year rejected the idea, saying the payment would need to be too high (on average around $9,000 per household) and recommended that any household be kicked off the premium solar tariff if it installed battery storage.

The Queensland government has decided against the buy-back, but rather than introduce an outright ban on storage in premium FiT households, announced new rules designed to prevent any rorts occurring.

It is difficult to imagine what the incentive would be for a household on a premium tariff to add battery storage, given that any solar power put in the battery for use at night will only offset a price of less than 30c/kWh, rather than the 44c/kWh export price.

Still, the Queensland government acted because if the system was rorted  – i.e. charging the battery at night from the grid and discharging it during the day – its advice was that more than $1 billion could be added to the cost of the premium FiT over its lifetime.

Storage had not even been considered when the system was designed less than 10 years ago, but with more than 150,000 homes with 580MW of rooftop solar on a voluntary or minimum tariff in just the south-east corner of state, the incentive for battery storage is growing as grid prices rise.

The number of households on the premium tariff has fallen significantly since the scheme came to an end, as customers lost their premium tariff if the house was sold or more solar was added to the roof.

According to Energex data for the south-east corner of the state, the amount of solar PV under the tariff has fallen nearly 100MW to 538MW – on 171,000 homes.

The total amount of rooftop solar in all of Queensland is now more than 1.72GW – bigger than even the largest coal fired power station in the state.

“Solar rooftops combined are now our largest power station in Queensland, and declining costs and technology breakthroughs have the battery storage market poised for substantial growth – just like solar PV some seven years ago,” energy minister Mark Bailey said in a statement.

“In Queensland we regularly see local energy companies, such as Redback Technologies demonstrating that battery storage technology is becoming more affordable and that opportunities for battery storage technology are immense.

“We believe in transitioning to a clean energy economy and want to promote the uptake of this new technology. We understand that batteries will play an important role in our transition to a clean energy economy, helping maintain system security, reliability and affordability.”

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.