NSW IPART determines ‘fair and reasonable’ feed-in tariff for solar electricity
The Independent Pricing and Regulatory Tribunal (IPART) of New South Wales in Australia has released a determination on a ‘fair and reasonable' feed-in tariff for solar electricity sources such as solar photovoltaic units (PV units) that feed electricity back into the electricity grid http://www.ipart.nsw.gov.au/Home/Industries/Electricity/Reviews/Retail_Pricing/Solar_feed-in_tariffs_-_2012-2013.
The release of the determination by IPART has been welcomed by the Sustainable Energy Association of Australia (SEA).
‘IPART has undertaken an independent financial analysis of a fair value of electricity returned to the grid by roof-top solar, a price that is higher than that currently offered to electricity customers with solar panels around Australia,' says SEA chief adviser Professor Ray Wills.
Around Australia the price being offered for electricity exported from domestic solar generation is in the range of 5 - 10 cents per kilowatt hour and this is not a fair price; in some jurisdictions businesses are not even eligible to receive payments.
IPART has determined that a subsidy free feed-in tariff for 2012/13 is in the range from 7.7 to 12.9 cents per kilowatt hour for electricity exported to the grid from PV customers.
A fair commercial price should be paid to both domestic and business electricity customers for their exported electricity, and the IPART determination moves this benchmark up. However, SEA argues that a fair commercial price is more likely to be close to the price being charged for electricity supply simply because the electricity is generated in the daytime when the market price tells us electricity has a higher value.
'The IPART determination is below 1:1 parity; IPART contend they have considered a range of factors, and we have no doubt they have, but it is not clear if IPART have considered the timing of electricity generation and the value of electricity at the time of generation,' says Prof Wills.
‘Any valuation must reflect the time of production and the realised value of that electricity in the market, and ‘fair and reasonable' tariffs should move closer to this price point,' says Prof Wills.
NSW IPART determines ‘fair and reasonable' feed-in tariff for solar electricity.
SEA Media Release - 28 June 2012