A Fair Feed-in Tariff for NSW?

A Fair Feed-in Tariff for NSW?

Electricity generated by small scale solar PV units should be valued at 5.2 to 10.3 cents per kilowatt hour (c/kWh) according to the long expected recommendations by the Independent Pricing and Regulatory Tribunal (IPART).

After the Solar Bonus Scheme was closed the NSW Government approached IPART to recommend a ‘fair and reasonable’ feed-in tariff that:

  1. does not result in an increase in electricity prices in NSW, and
  2. does not involve funding from the NSW Government budget.

In other words, any future feed-in tariff must be subsidy-free and compete with (subsidised) coal fired power plants.

Solar Incentives

Rainbow Power Company and many other stakeholders have pressed for a parity rate (a 1-for-1 scheme). Such a scheme inevitably requires some sort of subsidy as it neglects the cost of operating and maintaining the electricity transmission and distribution system. On the other hand, a parity rate sets incentives for customers to both invest in a small scale PV system and consume less electricity. The recommended 'fair and reasonable' feed-in tariff does neither. But due to the raising cost of electricity and the steep drop in prices for solar panels a feed-in tariff is no longer essential in providing returns for your investment – as long as you match your system to your personal needs.

Sizing a solar system

A grid feed solar system is still cost effective and can pay for itself in less than 7 years if you actually consume most, or better, all the energy it produces. Here's an example of a 10 kW system*:

Feed-in 100% export 50 % export 0 % export
Tariff return/day payback time return/day payback time return/day payback time
5 cent $2 41 years $7 over 11 years $12 under 7 years
10 cent $4 over 20 years $8 over 10 years $12 under 7 years

*Example assumes net cost for 10kW grid feed solar system is around $30,000 (installed) and $0.30 per kWh.

If the cost per kWh continues to increase as it has in recent years, the 'payback time' will even be less. Try our solar savings calculator to find a system that meets your needs.

Tariff Review

IPART stressed that the recommendation applies for 2011/12 only. Estimating a fair and reasonable value for 2012/13 is not possible until June 2012. However, IPART already indicated that the value will increase due to the new carbon pricing scheme starting on 1.July 2012. Stay tuned for further announcements. (update 1.7.12: IPART says its new range for 2012/13 is 7.7c-12.9c/kWh.)

View our Grid Connect Solar Systems

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