On Monday May 5th, the Victorian Government announced that Victoria would join Queensland and South Australia in a feed-in tariff for solar power. The scheme will see homeowners paid 60c for each kilowatt-hour (kWh) of renewable electricity fed back into the grid from a grid-connected solar power system. The scheme is proposed to run for 15 years.

However, while leading international feed-in tariffs are paid on the entire generation, Victoria, like the other states, is offering to only pay homeowners for the excess electricity exported to the grid after what is consumed in the home. This raises some serious concerns around equity issues and the ability of these schemes to deliver the levels of renewable energy uptake desired.

Further, the scheme is capped at 2 kilowatts (kW), which means any installations larger than 2kW appear as though they will be ineligible to access the tariff. This will exclude a significant number of households, and will result in people deliberately down-sizing their plans to ensure that they can get access to the 60c – a crazy situation for a scheme that is supposedly designed to encourage the uptake of more solar on our roofs.

By only paying for the excess electricity generated, such a scheme will discriminate against both owners of smaller grid-connected systems and those who are more likely to consume electricity during the day, such as senior citizens or stay-at-home parents. Additionally, calculating payback times becomes unworkable. Whilst generation across the year is fairly easily calculated, it is virtually impossible to know what portion of this will be returned to the grid.

Feed-in tariff schemes paid on total production from renewable energy systems, such as all international examples, suffer from none of these problems. They provide certainty of return, and it is this certainty of payback which creates the incentive for people to invest their own capital in solar power. By not providing this certainty, these Australian schemes run the risk of not only being discriminatory, but also being ineffective.

One positive to come from this announcement is the increase on the South Australian and Queensland models from 44c/kWh to 60c/kWh. However this is probably overshadowed by the 2kW limit and it is disappointing to see yet another state introduce a modified feed-in tariff which will in all likelihood fail to bring about a significant increase in uptake of solar across the state.

For more information on feed-in tariffs, visit www.ata.org.au/feedintariffs

This entry was posted on Friday, May 9th, 2008 at 6:16 pm and is filed under Feed-in Tariffs, News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.