Feed-in tariffs for renewable energy
A feed-in tariff is a premium rate paid for electricity fed back into the electricity grid from a renewable electricity generation source. At present, feed-in regulations for renewable energy exist in over 40 countries, states or provinces internationally.
Possibly the most famous and successful feed-in tariff laws would be those introduced in Germany. The scheme has been responsible for the dramatic growth in Germany’s renewable energy market and the solar photovoltaic(PV) industry in particular. In the five years from 2000, the quantity of electricity fed into the grid from eligible sources has more than doubled, with a seven-fold increase in installed solar photovoltaic capacity to over 1,500 MW by the end of 2005. By comparison, at the same time Australia installed around 7MW, or less than 0.5% of Germany’s capacity.
Why do we need feed-in tariffs?
Renewable micro-generation is disadvantaged in Australia as the market fails to take into account the true value and many benefits to the electricity network which arise from the adoption of renewable energy technologies embedded within the electricity grid. Renewable energy sources provide environmental benefits through reduced atmospheric pollution, and social benefits through industry development and job creation, each with related economic benefit.
A feed-in tariff redresses these systemic market failures and rewards micro-generation for its true value to the electricity market and wider society, by providing a financial incentive for the adoption of renewable energy.
Design of a feed-in tariff scheme
For a feed-in tariff to be effective, it is essential that the tariff offered is designed in a way as to adequately reward solar PV proponents. ATA believes that in order to provide an incentive for people to install grid-connected solar systems, and thus achieve the goals of the scheme, there are three key elements of a feed-in mechanism which need to be considered: the level of the tariff; the means of metering; and the duration of the scheme. It is the combination of these three elements which determine the success or otherwise of a feed-in mechanism.
As such we strongly believe that an effective scheme would involve a feed-in tariff mandated at 60 cents per kWh, paid on the entire output of a PV system (via gross production metering), and offered for at least 15 years. Only a feed-in tariff set at or above these levels would adequately reward the adoption of solar PV for the range of environmental, social and economic benefits arising from this technology, and encourage the uptake at sufficient levels to achieve the policy goals.
Supporting arguments and background materials
Click here for ATA’s paper: The design of a feed-in tariff
Click here for ATA’s paper: The case for a feed-in tariff for solar micro-generation
State-based feed-in tariffs
Each state and territory is at a different stage of implementation and development of a feed-in tariff. Click here for letter to your local member
To find your local Member of Parliament (by electorate) click here
To find out which electorate you are in click here
