Changes to Solar Feed-in Tariff rates for Energy Australia customers

Energy Australia has changed the rates it offers to customers with a grid-connected solar PV system. On an up-note, the change means that newly installed solar systems will receive a rate of 7.7c per kilowatt-hour (kWh) for solar power exported to the grid–up 1.7c from 6c. However, another change introduced simultaneously means that Solar Bonus Scheme customers who had been receiving 66c rate through Energy Australia will now receive only 60c.

The change came after the NSW government’s decision to have electricity retailers in the state contribute to the cost of the over-budget Solar Bonus Scheme, which originally mandated that electricity retailers pay customers with grid-connected solar systems 60c (and 20c at a later stage) for every kilowatt-hour that their systems produced. Some electricity retailers such as Energy Australia offered a voluntary contribution on top of this 60c to attract customers–e.g. 66c/kWh.

According to the Energy Australia website:

The solar credit rate for unused electricity customers feed back into the grid is made up of a credit from your local network and a credit from your retailer. All energy retailers are now required to contribute 7.7 cents per kilowatt hour towards the 60 cent and 20 cent NSW Solar Bonus Schemes from 1 July 2012.

The 60c/kWh rate is certainly the most generous rate ever offered for any Australian state, but Energy Australia customers who have hitherto been receiving the 66c/kWh rate may be disappointed, but will doubtless recognise that their lot is not a bad one.

As for NSW residents and businesses considering going solar at the moment, the price of solar PV systems has come down significantly since the Solar Bonus Scheme was introduced, meaning that returns on investment for solar systems in NSW are still attractive under the lower Solar Feed-in Tariff rates that are currently offered, provided the household or business uses their solar power as it is being produced. Using solar power as it is being produced reduces the need to purchase expensive electricity from the power grid.

Read more about the benefits of solar power in NSW.

Top image via Energy Australia

© 2012 Solar Choice Pty Ltd

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II

Comments

  1. Does NSW or other states charge solar panel owners a higher price for grid infrastructure as WA intends to start?

    1. Hi Gordon,

      We haven’t conducted a thorough analysis of how retailers charge their solar customers, but have heard that some companies (not all) have either extra fees or higher rates for solar customers. What is definitely happening is that more and more electricity retailers are shifting parts of the bill to daily ‘fixed fees’ which cannot be reduced by limiting consumption of electricity from the grid or offsetting with solar, thus limiting the effectiveness of solar. In any case, there isn’t a state-wide push to implement such charges.

      We do know of a few self-professed ‘solar friendly’ retailers who say they offer a square deal for their solar customers. Diamond Energy is one of them who we trust (all of their customers are solar customers), but if you look around you may find some others as well.

      Best of luck!

  2. The disrespect by Energy Australian to a contract is outrageous. Our capital outlay for solar panels was based on the figure of .66c so now, with the current amendment and the hike in electricity costs, the period to pay-off our system is much extended. Can’t Energy Australia be held responsible to meet their advertised offer price of .66c?

    I worry that a precedent is set and future reductions in the buy-back rate will occur.

    1. Hi Taylor,

      The original 66¢ rate was an incentive to encourage residents to go with Energy Australia as opposed to a competitor, according to Government guidelines they have to pay a minimum of 60¢ per kWh and many energy retailers have chosen to decrease the amount they pay customers due to the cost of the original scheme. I believe there should be a section within your contract that states that Energy Australia can make certain amendments to the buy back payments. It may seem unfair given the original 66¢ rate but compared to the current buy-back situations we have even 60¢ is an extremely good deal.

      Thanks for your comment

  3. how typical is this, its rubbish, how would they respond if suddenly we changed the way we treated contracts/agreements with the government, how long would it take them to act on us, yet they can make changes which affect us and the best we can do is bend over further to take it.

    1. Hi Mark,

      We agree that the unclear, ever changing renewables and solar policy is frustrating for all involved. The solar industry has been lobbying for some time to have a clear path that allows both residential and commercial investors to have some idea of the future of solar PV in Australia. One of the key issues for the Government is they didn’t realise quite how popular solar was going to be, as a result the original incentives were set way above the retail price of energy, we’re now entering a situation where feed-in tariffs are way below market value in many states. As our article states the reduction in payment overall is Energy Australia response changes in Government legislation where energy retailers now pay part of the cost of the Solar Bonus Scheme.

      Although 6¢ less per kWh, 60¢ is still an amazing rate for customers, especially when we consider that it will help them pay off their system sooner and make them money for years to come. In addition to this it’s going reduce energy bills meaning that customers will be less affected by the rises in energy costs. Hopefully over the next few years we’ll start to see a realistic feed-in/buy back scheme in every state and a long term Government Strategy for Renewable Energy across Australia.

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