ACT Greens propose Feed-in Tariff incentive for small- and medium-scale solar systems

The ACT Green Party has announced their intention to introduce a bill into the ACT Legislative Assembly that would incentivise ACT households and businesses for producing solar power. The “Renewable Generator Guarantee” (RGG) would fit nicely with the territory’s recently announced plans to generate 90% of its power from renewable sources by 2020.

The RGG, which would in effect be a gross Feed-in Tariff applicable to systems up to 200 kilowatts (kW) in capacity, could drive enough uptake of solar to meet up to 5% of the proposed 90% target, according to ACT Greens spokesperson Shane Rattenbury. Rattenbury noted that the current 1-for-1 Solar Buyback rate (in which customers are paid for their solar power a rate equivalent to their retail power rates) offered voluntarily by ACT electricity retailer ActewAGL could be altered at any time and does not offer the sort of financial certainty that the RGG endeavours to provide.

The proposed scheme would start out offering a rate set by the Independent Competition and Regulatory Commission (ICRC)–estimated to be around 20c–for each kilowatt-hour (kWh) of solar energy produced by eligible solar systems for those who sign up in the first year. Payments at this rate will continue for 20 years. The rate will be decreased annually for new applicants, however, and may see further reductions in boom years when the total capacity of installations exceeds a yearly target of 10 megawatts (MW). Implementation of the RGG would not render system owners ineligible to access the Solar Buyback offered by ActewAGL–they would still be able to choose one or the other where applicable.

Interestingly, under the proposed RGG, those who install solar systems will be required to submit their Small-scale Technology Certificates (STCs) to the Australian Capital Territory government; these will be counted towards the territory’s 2020 carbon emissions reduction target of 40%. STCs are created under the federal government’s Renewable Energy Target (RET) when small renewable energy generators are commissioned, and are usually included as a ‘discount’ to the upfront cost of a solar PV system. In effect, this means that although the power production of systems will be subsidised once they are up and running, in order to access this benefit, customers accessing the RGG will likely pay more for systems than those who opt out. The investment will balance out over time, however, as the power produced by systems over the 20 year period which the scheme runs will be worth more than without the incentive. This even-handed approach is similar to the highly successful one implemented by the German government, and will theoretically avoid the erratic policy changes that have characterised feed-in tariff policies in the Australian states to date.

The RGG would also be implemented in such a way as to allow for maximum flexibility for would-be system owners or operators. The scheme will endeavour to make solar PV an attractive option even for landlords, tenants, and those who have limited or no roof space on which to install a system. It will also complement the feed-in tariff scheme currently in place for large-scale solar plants by increasing the financial attractiveness of solar PV for small system owners, ensuring that renewable energy generation capacity grows among both large-scale projects as well as small and medium-sized ones.

Below are the reasons behind the Greens’ decision to introduce the legislation.

WHY DO WE NEED IT?

While the costs of renewable energy are falling rapidly, Canberra homes and businesses installing PV have no access to a guaranteed payment for the electricity that they produce for the community. ActewAGL’s Solar Buyback Scheme is not legislated and is only accessible to households installing no more than 10kW of generation. As a 1:1 scheme, it will cost Canberrans more than the RGG, due to the rapid rise of fossil fuel prices. Whilst ACT electricity prices are expected to rise by 42% from 2010-11 to 2013-14, the cost of solar PV has dropped by 75% in the past three years. Together with wind, solar PV is expected to be one of the most cost-competitive energy sources in 2030.

WHAT WILL IT DO?

The RGG guarantees small-medium generators a payment for all of the energy they produce from their solar PV system. This will reduce system pay-back times and generate modest returns. It is anticipated that up to 100MW of additional solar PV will be installed through the RGG over the next 10 years. This will help to grow the ACT’s clean energy economy, increase the ACT’s current small-scale solar capacity up to 4-fold over the next 10 years and cut the equivalent of 2,660 cars’ worth of emissions from Canberra’s roads every year. By requiring generators to surrender their RECs to the Government, all of this abatement can be counted towards the achievement of our ambitious 40% emissions reduction target.

© 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