South Australia’s Retailer Feed-in Tariff to increase to 6.8c/kWh (but does it really matter?)

South Australia‘s Retailer Feed-in Tariff (RFiT) will increase from the 2015 rate of 5.3c/kWh to 6.8c/kWh for the duration of 2016, according to a report from the Essential Services Commission of South Australia (ESCOSA), the regulatory body responsible for setting the RFiT and other electricity rates in the state.

ESCOSA cites the impending closure of the coal-fired Northern Power Station in Port Augusta as one of the reasons for the increase in the rate, which is based in part on the wholesale value of electricity.

The RFiT is paid out as a sort of ‘top up’ to the more generous rates to solar homes through SA’s government-backed solar feed-in tariff incentives (which are now closed to new applicants).

It is also the bare rate paid by electricity retailers to solar households who do not have access to these more generous incentives.

Although the state’s 1.5c/kWh increase bucks the downwards trend seen in NSW, the change will make very little difference in terms of the energy bill savings of solar homes.

Some retailers in the state voluntarily offer slightly higher rates, but even in these cases it is still clearly in the best interest of solar homes to focus on self-consuming their solar energy rather than selling it into the grid.

South Australian households have some of the highest retail electricity rates in the country, which makes the case for rooftop solar especially appealing – provided the homes consume most of the solar electricity directly.

Around one in ten homes in the state has a solar system installed.

Low FiT rates potentially add to the appeal of home battery storage systems in the state; instead of ‘wasting’ solar energy by exporting it to the grid, homes can store it for use later in the afternoon.

Adelaide City Council currently has an incentive program in place to encourage uptake of rooftop solar and storage within its jurisdiction.

The SA state government is also aiming to make itself a leader in the clean energy space, recently introducing an expression of interest program for ‘low carbon’ energy solutions for government buildings.

Top image: South Australia solar penetration, via the APVI.

© 2015 Solar Choice Pty Ltd