Tuesday, June 26, 2012

Solar scuttled - QLD govt slashes solar feed-in tarrif

The new Queensland LNP government has slashed the amount of money householders will be paid for feeding power from rooftop solar panels into the grid from 44 cents a kW/h to just 8 cents a kW/h for new installations, effective July 10.

Although existing solar PV owners will continue to receive the old feed-in tariff, it will also be lost upon the sale of a house, so anyone buying a house will also receive only the new 8 c kW/h. Although even this rate will be up for review in 2014.

Effectively households with solar panels are now going to earn 8 c kW/h for the power they produce but have to pay ~22 c kW/h for the power they use.*1 *2

This kind of out-of-the-blue promised-we-wouldn't-do-it-but-we-are reminds me of when the old NSW Labour government suddenly decided to slash their much more generous feed in tariff with no real thought as to how it might affect the state's solar industry and the people who work in it.

Despite what the new QLD energy minister might tell you, QLD had quite a well designed solar feed in tariff in that it was a 'net', not 'gross' scheme and so incentivised solar power without costing all that much. According to the energy minister the scheme has so far cost $112 million over 4 years, not a small amount, but not bad when you consider it has stimulated a reported $2.37 billion worth of private investment as well as providing renewable energy and helping to grow a reported 10 000 + jobs in the solar industry.

Many in the solar industry had been calling for a gradual reduction in the feed-in tariff as solar panel prices decreased and I think most people will have supported a gradual reduction down to around the retail price of electricity over several years ie: the price you get for the electricity you produce is the same as what you pay for it. However this government has already shown they Can't do clean energy, cutting highly successful programs like the Climate Smart at Home Service which was taken up by hundred of thousands of Queenslander's. Hopefully they will change tack and not try to scuttle the solar industry too but things don't look good currently.

Chances are that the PV power you produce is used by your neighbours, or another home/ business close by, so the cost of distributing the power is low, compared to say transporting it 500 km from a coal plant along high voltage lines and through a number of substations. So it would seem some company will be making a nice profit off your power.

Apparently 8 c k/w is the wholesale price of power, ie: what the big coal fired power plants get paid. However unlike you, generators can also take advantage of times when wholesale power prices are high (due to high demand) to sell power for much more that that. Also I imagine the carbon price will push up the price of wholesale power (because so much of it comes from dirty coal), but there'll be no increase for PV power to match this. Effectively this means you'll have to sell your clean solar energy for less than the big polluters get for their coal fired electricity. How's that for priorities? 

See also

Solar shame - election promise broken (Courier mail)

Can-do Campbell slashes Queensland solar PV tariffs (Renew Economy)

1 comment:

  1. hi your blog was really interesting to read and was quite informative. will be looking for more such posts.

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